Will Ride-Sharing Be Legal?

A blog about business and economics.
July 5 2012 5:21 PM

Will Ride-Sharing Be Legal?

Micky Meece's piece on websites that aim to facilitate carpooling shifts very quickly into somewhat hazy discussions about Americans' allegedly culturally unique affection for automobiles and the geography of southern California, but I think the bigger challenge is arguably regulatory.

You see this on both a short-term way and a long-term way. After all, one natural reason that I might want to open up my car to another passenger is that he's going to give me some money in exchange. And he might want to pay me, because doing so might be cheaper than other alternatives. But as I've written before mass transit is regulated much more stringently than private transportation. A private car needs to pass some inspections and a private car driver needs a license, but the regulatory hurdle to drive a passenger somewhere for money is wildly higher than the hurdle to drive yourself somewhere. That's a large bias in the system toward people relying on self-driving rather than shared rides. It's possible to get around these regulatory hurdles by offering the rides for free, but mandatory non-commercialism hobbles the potential of any new enterprise.

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The longer-term issue relates to things like mandatory parking minimums that ensure that in the bulk of the country you're paying for a parking space whether or not you use one which, in turn, reduces the financial incentive to think of other ways of getting around.

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

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