Canadian Law Blog Hall of Fame

2015 Canadian Law Blog Finalist

2014 Canadian Law Blog Finalist

2013 Canadian Law Blog Awards Winner

2011 Canadian Law Blog Finalist

2010 Canadian Law Blog Finalist

2009 Canadian Law Blog Awards Winner

2008 Canadian Law Blog Awards Winner

2007 Canadian Law Blog Awards Winner

2008 InnovAction Awards



  • Categories
  • Archives
    April 25th, 2022

    Uber and Lyft

    ♫ So let your trumpets blow
    Round the walls of Jericho
    Let your mighty voices sound
    Until the walls come tumbling down…♫

    – Music, Lyrics and recorded by: John Fullbright

    Back in December 2015 I wrote a column on Uber and the Practice of Law for my regular column PracticeTalk for the Canadian Bar Association.  At that time, Uber, Lyft and other ride-sharing services had not yet come to BC and there was a lot of talk about what Uber’s entrance into the market might mean for passengers, for Uber and other ride-sharing drivers, for taxi drivers and the taxi industry, for safety of such rides and the like. Well I thought we could take a step back and see the effect that Uber and Lyft and other such services have had and reflect on the lessons that disruption can have for the legal industry, particularly what lies in the public interest.

     

    The original column is as follows:

    What do Uber, the taxi-replacement service, and the practice of law have in common? This was recently posted by a friend in Facebook:

    Transportation in the new digital economy; Vancouver is Uber-free, but I tried it in Sacramento. Download the app and fill in basic information (e.g. credit card) in advance. When ready, the app confirms pickup location, takes your destination address, estimates the fare and wait time for pickup, and (if you approve) calls a driver. Best feature: when you arrive, just step out of the vehicle and go; payment is automatically charged to your card. No fiddling with charge cards, signatures, etc. A very positive experience – I will definitely use the service again.

    Uber is a disruptive technology/service that is changing the face of ground transportation in cities where it has taken hold. Does Uber hold any lessons for the practice of law? To start, let’s look at the commonalities of taxis and the practice of law. Each:

    • Has a monopoly that excludes competitors.
    • Calculates the fare at the end of the ride.
    • Is highly regulated.
    • Extols the virtues of their regulations as protecting the public’s interest.
    • Claims that their exclusivity is necessary to ensure the proper operation of the market for their services.

    What are the differences between taxis/the practice of law and Uber?

    • Uber app estimates your fare in advance.
    • Uber app shows the route you will be taking.
    • Uber collects feedback from riders and uses this to ensure quality control.

    Uber claims that they offer predictability, lower prices for a similar product, greater convenience, reliability and quality of service by focusing on the client experience.

    What evidence is there in support of Uber’s arguments? Well, the Competition Bureau says ride-sharing services are good for consumers, calling them innovative and likely to create lower prices and better service (http://bit.ly/1Nj0Xcg).

    What happens when Uber comes into a city?

    • The condition of taxis suddenly improve.
    • Uber itself begins to face lower-cost competitors.

    Certainly there are many detractors and negative aspects of the Uber model. However, Uber is an example of the emerging platform business model, in which competitors can enter a marketplace for virtually zero marginal cost against entrenched competitors.

    Can this happen to lawyers? Clients don’t necessarily want a lawyer; they want a solution to their legal problem. Does it matter to them if a lawyer or a non-lawyer provides the service?

    I have often said that the hardest law to repeal is the law of economics. In this case, Uber and similar services have the law of economics on their side.

    Investopedia, in a column entitled: “Uber Advantages and Disadvantages” by Mohamed S. Jalloh, a financial analyst at Broadridge and an Investopedia contributor, looked at what happened when a disruptive technology and business model was introduced into a service industry that had been, up to that time, granted a monopoly on providing bespoke ride services. Did the forecast negative impacts of introducing ride sharing materialize?

    Mohamed lists the key takeaways:

    • Ride-sharing services like Uber have disrupted the taxi and limo industry,
    • Uber has become a prime example of the gig economy at work.
    • Uber’s advantages include door-to-door convenience, safety, and reliable quality.
    • Uber’s disadvantages include its surge pricing and the negative effects of replacing steady jobs with gig work.

    There is no question that the disruption has had deep implications. Mohamed states:

    Bright-yellow taxicabs once dominated the streets of Manhattan. By 2020, there were four times as many ride-sharing vehicles on the streets as taxis. Those vehicles were summoned by apps offered not only by Uber and Lyft but by Via, Juno, and Gett.

    Riders have to register with a particular service and their credit cards lodged, resulting in the loss of autonomy for their actions. In this way, both problematic riders and drivers are weeded out of the system. Both drivers and passengers are encouraged to rank each other, resulting in low rated drivers driven out of the system and low rated passengers banned.

    OK you say – there is a vast gulf between providing legal services and providing a ride in a car. I get it. But the big question is, what implications does a disruptive model such as Uber and Lyft have for the legal profession? Both taxi drivers and lawyers claim they require a monopoly over their services to ‘protect the public interest’. Did this argument stand up when looking at the Uber experience?

    The answer is a mixed bag.  No question the availability of options for seeking transportation services expanded. However, the cost of said services were not necessarily reduced, given ‘surge pricing’ which allows Uber to increase fares at high-travel times. Passengers are provided certainty (they knew the cost of the ride before they step into the car), the cleanliness of the rides  were stated to have gone up and the speed of the service over a cab increased (since the credit card is on file, the passenger just has to step out of the vehicle at their destination – no fiddling with credit cards and / or cash). However, since Uber and Lyft in Vancouver were restricted in the areas in which they could operate, the taxi industry still retained its monopoly outside of these areas.

    But in terms of the big question of whether maintaining a monopoly was necessary to protect the public interest, there is no question that the answer was resoundingly, no. The public interest was not mortally wounded when the taxi monopoly disappeared. The taxi industry, however, definitely took a hit. And we all know that the interests of the taxi industry do not necessarily align up with the public interest.

    This has lessons for lawyers. Consider that if we do nothing, as lawyers we may let our mighty voices sound until the walls come tumbling down….

    © 2022 David J. Bilinsky

    This entry was posted on Monday, April 25th, 2022 at 8:00 am and is filed under Issues facing Law Firms, Law Firm Strategy, Leadership and Strategic Planning, Technology, Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
    Leave a Reply





    Warning: Invalid argument supplied for foreach() in /nfs/c02/h02/mnt/20929/domains/thoughtfullaw.com/html/wp-includes/script-loader.php on line 2781