It’s time to regulate app-based taxi services

Taxis, as a form of on-demand micro-transit, are an essential component of well-functioning metropolitan areas. They deliver convenient door-to-door trips for those who either punctually or regularly require such services. Though they typically only account for a small share of overall trips, they are essential for some people, at some times and in certain circumstances. They are a stand-alone part of the urban mobility services.

The latest entry to this field is the web-based or app-based taxi, which takes bookings through the Internet. To start using a taxi as a passenger you must first sign up to create an account. After registration you download and install the app on your mobile phone. Once you are logged in, the next step will be to set up your preferred payment method either cash or credit card. 

Whenever you need a ride, you open up the app on your phone, ensure the pickup location is where you are now, input where you want to go and select the car type you desire. The network will respond with the estimated cost of the trip and time of the driver’s arrival. That’s about all! 

“Very cool,” you might say.

Of course, it is, except for few unanswered questions. Let’s go through them.

First, the drivers are not permanent employees of the company. They are their own bosses and set their own hours of work. They earn reasonable wages - all in the comfort of their own vehicles. One major company’s website indicates the requirements of a driver as follows: “You must be at least 21 years old. You must own/have access to a good condition four-door vehicle - but it’s safe to say that your car cannot be older than year 2006. And, if you have a valid car insurance, your driver’s licence (for at least a year) and no major criminal history - you’re ready to apply to become a driver.”

Does it mean that we leave the fate of the passengers’ lives in the hands of an independent driver with one-year experience? Why not a medical certificate issued by any licensed government physician stating that the driver is physically and mentally fit to drive a motor vehicle or the police clearance that the driver has not been convicted of any offense involving moral turpitude or reckless imprudence resulting from reckless driving? What happens if a crime is committed by a driver to a passenger? Will the company take the responsibility? 

HQ elsewhere

The headquarters of one leading app-based taxi provider is located in a foreign country and recently the same provider was banned in London for refusing to subject themselves to the jurisdiction of the British courts. It happened in India, too. Senior advocate Indira Jaising said that it was very difficult to hold them accountable for any crime committed by their drivers.

In brief, much of the social tension surrounding the deployment of app-based taxi services in London, New York and New Delhi relates to the fact that they do not comply with the rules put in place to regulate taxi services. 

The companies argue that their role is limited to being a technical intermediary putting drivers and passengers in touch with each other. This view is supported by the fact that their platforms own no vehicles and employ no drivers. 

However, the regulators take the opposite view that companies are service providers that directly compete with some parts of the taxi markets. 

In many jurisdictions in developed countries, taxi drivers must submit to robust criminal background checks that may involve a higher level of scrutiny than those carried out by some app-based service providers. 

However, app providers argue that their background checks are equivalent or better than those carried out by other conventional taxis, especially when combined with the detailed, automatic and easily accessible logging of driver and trip details.

Imposing stricter controls, they argue, may keep occasional drivers from signing up and this would be a loss to the companies since many of their drivers are non-professional (in those markets where this is allowed) and work only part-time. 

Other points

Another point to be considered is the number of hours worked by drivers in order to ensure that they do not become too fatigued to drive safely. This is especially important in the case of those working other jobs as well. The drowsiness is primarily what the companies should be concerned about. It is the determinant factor in crashes.

Closer monitoring of vehicles could lead to the early detection of behaviour betraying drowsiness but are the companies doing it?

Vehicle safety inspection is another point and an important part of the public safety regulations faced by taxis. In developed countries, there are rigorous safety inspections for taxis. Are these companies going through such procedure?

Finally, taxi service providers must provide adequate levels of insurance such that costs related to crashes and other mishaps are not borne by the public. These insurance policies are crafted specifically for the industry and can be onerous compared to personal liability and crash insurance policies. Are the companies bearing the cost of such insurance?

Indian experience

Let us now turn to India. The Indian government has taken a number of steps in regulating the app-based taxi services. The government has formulated many mandatory guidelines. Among them are: the web-based taxi operating company must be registered in India. Only those having transport badges issued by the government will be allowed to function. A person with three-year experience will be eligible to drive such taxis. During any booking, the details like driver’s names, his photograph and licence number should be messaged to the passenger. 

Fares should be regularised. Apart from the GPS/GPRS system in the vehicle and with the driver, there will be a display of the route and fare to be recovered for the same. It is mandatory to give commuters a bill. Fares will be different for small, medium luxury and large taxis. The central government of India has asked each state government to frame regulatory and operational infrastructure compliance guidelines for their own states. 

It should also include vehicle profile, working condition for drivers and their compliance, framework for issuing licence, duration and renewal among others, general condition, transparency and power to cancel or suspend licences.

A large number of state governments have already announced their decision to regulate web-based taxi services to ensure affordable travel for commuters.

Follow suit

This writer firmly believes that we need to follow suit. More than half a dozen app-based taxis are operating in the Western Province. Owing to no specific policy, these taxis are not monitored and controlled by anyone at present. Without getting too much into the nitty-gritty of taxi rules and regulations, what does atypical passenger require out of taxi? Regular good taxi maintenance is one. 

Additionally, he wants to know he is getting in a safe taxi that’s been checked recently. He should know that he is reasonably covered by insurance if any unexpected event happens to him during the trip. He should be satisfied his fare is fixed to a predictable formula and would not change during the trip under any circumstances. 
And, above all, he wants to know that his driver has had a good background check, so that he can have peace of mind throughout the journey.