Ride Sharing Services

Thanks for choosing this topic, it’s one that often causes some heated discussions around the water cooler at work.

I’m not an Uber user, but have used inventory-based service in Melbourne Flexicar, which was a brilliant solution for inner city apartment dwellers.

I listened to an article on RNZ a while back about the airbnb backlash in Barcelona and San Francisco. There were a couple of elements to this, one being that high rents in districts with low incomes are driving out long-term residents (also an issue in Queenstown) but also that those people selling using these platforms are making money because they have circumvented the normal costs of entry for this type of business. Whether that’s police checks, vehicle certificates of fitness or special licenses for Uber drivers; or commercial building rates, GST, insurances etc. as an accommodation provider. Why is this a problem and should we as consumers care if we are getting cheaper more convenient service? Hence the debates with my work colleagues.

I think the short answer to that is yes. Not all regulation is good. Back in the 1980’s the NZ taxi market was highly regulated. A few key companies had the market sewn up and you ‘bought into a business’ as there were a restricted number of licenses to go around. When the industry was deregulated the focus was still on passenger and vehicle safety and drivers still had to meet the standard for ‘fit and proper’.

In a completely unregulated market with low cost of entry, there’s less control and also fewer means to ensure that the business driving demand e.g. increased tourist beds are contributing their fair share to the other infrastructure required to support increased tourist numbers e.g. roading, rubbish collection, sewerage, parks and conservation areas etc.

There is also an interesting blog from the perspective of an NZ Uber driver, where drivers are barely making a subsistence wage (~$10–15 per hour), he talks about the difficulties in establishing a drivers organisations to represent them, the ‘climate of fear’ encouraged by the corporation , incentives to break the law (P class licenses) and the fact that in 2014 Uber declared earnings in NZ of $1,061k and paid tax of just $9.3k income tax (or around 1%). All food for thought!

(RNZ podcast on airbnb).


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