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Ian Adams

Why AB 24 is a Bad Idea

Just as a cook’s creation is only as good as the ingredients she uses, so too is public policy only as good as the premises that undergird it.

That’s why, when it comes to judging food or policy, it’s best to have someone other than the creator evaluate the end product. Aristotle encapsulated this sentiment in 350 B.C.E. in his work Politics, and the old Greek was on to something.

It’s through that prism that one should judge the latest attempt to quash California’s ridesharing industry, this time by state Assemblyman Adrin Nazarian, D–Sherman Oaks. His rotten premise is that transportation network companies engage in “high-tech hitchhiking.” This betrays a willful ignorance of how the industry operates.

If Nazarian’s A.B. 24 (now a two year bill) had passed in anything resembling its current form, Californians would have been served a hearty helping of constrained consumer choice and higher prices. Fortunately, the Assembly Appropriations Committee has deferred that date. But, its time might yet come.

Claims that TNC regulation should be brought into complete conformity with taxi and limousine regulation are not only insensitive to the operational distinctions between TNCs and other transportation-for-hire mechanisms, but take for granted that taxi and limousine regulation is worth imitating. That’s a faulty conclusion. In Oregon, the City of Portland’s recently introduced TNC pilot program recognized this, and has sought better-tailored regulation that will improve the competitive posture of taxis and limousines.

This is not the first time Nazarian has attempted to dish up his vision of consumer protection to the public, and it will likely not be the last. Last session, he introduced legislation with a conceptually identical posture, only to see it meet a particularly ignominious end in committee. While much can change in a year, it’s difficult to see what’s changed with respect to TNCs since the state passed comprehensive legislation.

Lawmakers should continue to look skeptically on the need for further regulatory direction, particularly since the existing regulation is finding success with little expense to taxpayers.

Because they are classified as charter-party carriers, TNCs are regulated by the California Public Utilities Commission. For its part, the CPUC already has promulgated thoughtful requirements for substance-abuse detection, background check and vehicle identification. These requirements protect both drivers and riders, while further regulation like A.B. 24 would upset the work the CPUC’s already done to institute these requirements.

For instance, while the CPUC has opted for a zero-tolerance drug and alcohol policy, Nazarian’s bill would introduce a requirement for pre-employment, random and post-accident drug testing. The CPUC standard, which provides for the immediate suspension of drivers who are merely suspected of alcohol or substance abuse, is at once better targeted to address that issue while also being less capricious and less costly to administer.

The bottom line is that A.B. 24 does much of what the CPUC already does, but it would do it worse and at greater expense. At this point, further regulation is essentially fast food at fine-dining prices. Only the cook could appreciate a meal like that.