Tag Archives: DMV

What to do when technology outpaces the law?

The recent cease-and-desist letters from the Virginia Department of Motor Vehicles to taxi alternatives Uber Technologies and Lyft remind me of my first trip to D.C. in 1997. An awkward high school junior traveling alone, I landed at National Airport, followed the signs and hopped into a filthy Virginia-sanctioned taxicab. The heavy stench of stale cigarettes clung to the papers, cups and clothes littering the floor.

En route to my hotel, the driver suddenly stopped and, without explanation, got out of the car. After making a 10-minute payphone call, he nonchalantly resumed our drive. I reached the hotel unscathed, but the unpleasant trip — costing about $15 — seemed second-rate to a first-time cab rider.

A few years later, a freshman econ course revealed that economics can explain the sub-par service I received.

TaxiThat is me, writing in the Richmond Times Dispatch. I make the case that ride-sharing companies Uber and Lyft have solved many of the problems that plague traditional taxi models. But instead of thanking the companies, the Virginia DMV has issued cease-and-desist letters.

The best defense of the DMV is that they were simply following the law. From their perspective, Uber and Lyft look like motor carriers. And in Virginia, motor carriers are required to be licensed. To this, Uber and Lyft can reasonably reply that they are not motor carriers. They do not employ any drivers. Instead, they employ software engineers who create mobile applications used by drivers. Their service is simply to connect those with rides to those in need of rides. In this sense, the companies are no more motor carriers than Kayak or Priceline are airlines.

So what to do in this sort of area where technology seems to have outpaced the law?

My colleague Jerry Brito offers a simple idea:

[H]ow about allowing the innovation to continue apace while the government studies it and gets its regulatory house in order? Public officials like [Commissioner of the DMV] Mr. Holcomb might say that their job is to enforce the law, and while that’s true, public officials also have a responsibility to exercise discretion in the public interest. It’s clear that the Virginia legislature did not anticipate the invention of platforms like Uber and Lyft when they designed their motor carrier laws, so it would be perfectly reasonable for the DMV to work with the legislature to clarify the law without first banning the services.

You can read more of Jerry’s views in his latest column in Reason.

“Resetting” State Governments

How will state governments recover from the catastrophic collapse in revenues? According to Indiana Governor Mitch Daniels, that all depends on whether states want to face up to the caus — the happy (and now unsupportable) spending binge of the 1990s, when states increased spending an average of 6% a year.

Writing in today’s Wall Street Journal, Governor Daniels estimates it will take GDP growth twice the historical average of 3.49% to return state tax revenues to their previous long-run trend line by 2012.

And even then, revenue recovery may not happen. Consumer spending is down. Americans may have moved into a renewed era of saving. That means less sales tax revenues for states.

The choice before states: more taxes, or less spending, and permanently smaller government.

State governments will continue to face hard choices: slash services, union benefits, or privatize what the state cannot support.

The Journal also reports on what one-day employee furloughs look like in the states: A 3 hour wait for drivers license renewals in California, no birth certificates available in Wisconsin, the shutdown of shooting ranges and visitor centers in Michigan, no food stamp applications filed in Maine, and fewer traffic patrols on Maryland highways.

There is a bright spot in this exercise: furloughs force efficiencies. When California began DMV furloughs in January, 473,000 people chose to renew online, an increase of 32%.

Assorted Links

Private beachs on public parkland in Rockaway Peninsula, Queens, NY.

New York in search of reveneus at the DMV — registration  and license fees hiked, and mandatory new licencse plates with every new registration.

Former New Jersey State Senator Joseph Conglio sentenced on corruption charges: giving state money to a hospital in exchange for a job.

Tax havens versus Tax hells — The Economist reports that in terms of tax, Chicago is the most expensive city for travelers, at $41 a day in taxes on general sales  purchases. The least expensive: Burbank, California, at just $1 a day in taxes.