Regulate Transportation—But Do It Differently

A blog about business and economics.
June 5 2012 9:22 AM

Regulate Transportation—But Do It Differently

Diana Lind says we need to deregulate intra-city transportation:

In many cities around the country, people are marooned by public transit that is often unreliable, infrequent, unsafe or just nonexistent. Private providers find it nearly impossible to supply alternatives. A start-up website called Uber that allows people to pay each other for a ride around town rather than hail a licensed taxi, recently was set up in a sting operation in Washington, D.C. by the local taxi commissioner for failing to comply with District regulations. Regulation has zeroed out private alternatives to public transit in cities, forcing people to take transit into their own hands — or, more accurately, into their own cars.
But what if there were other options? In New York, which has transit options that any other American city would envy, there’s such great density that it supports many more niche transit options. “Dollar vans,” which largely fly under the regulatory radar, are a popular service for many people in Brooklyn. These kinds of systems calledcolectivos flourish in Latin and South America, as well as other regions of the world, where private cars and public transportation fail to meet users’ needs.
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The key data point on the dollar vans is the contrast between the vans that operate in Brooklyn and the ones that operate out of working class immigrant neighborhoods in the dense communities of Hudson County, NJ. Hudson County operates as a bit of a "sixth borough," but since it's actually in a whole different state the New Jersey vans operate under a different regulatory framework. Different primarily in the sense that it makes them legal, unlike the Brooklyn vans, so the proprietors do more to make proper capital investments in their vehicles.

But I think the language of deregulation has become counterproductive here. Obviously vehicles operating with internal combustion engines on public streets needs to be regulated. Private cars are very much regulated. You need to pass a test and be certified as competent to drive. Emissions standards need to be up to snuff. The vehicles have to have safety features. And then there are rules about what you can do with the car. You can't drive too fast or drive on the wrong side of the road. You're supposed to signal when you turn. The problem arises not when vehicles are regulated, but when using a vehicle to transport other people for money is regulated much more stringently than using a passenger vehicle in a non-commercial manner. The problem, of course, is that few people can depend on friends and family to drive them around everywhere. So very stringent curbs on commerce in transportation means that people need to overwhelmingly depend on owning their own vehicle and then transporting themselves with it on a non-commercial basis. This is a huge problem for certain classes of people (the vision impaired, the elderly, the poor) and leads to a lot of avoidable traffic congestion and air pollution.

The solution, however, isn't to somehow stop regulating the practice of driving vehicles. It's to level the regulatory playing field between a guy driving a friend's stuff across town in a van to repay a favor and a guy driving five strangers across town in a van in exchange for money he's going to use to pay the rent.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.