The end of disruption

While there could be pages upon pages written about the overall societal impact of the new economy both now and into the future when it comes to quality of life and gentrification, let’s focus on one aspect.

One case in point is ride-hailing services and the impact on taxi service, traffic congestion and workers. Scroll back time to when there were not ride-hailing services. Taxis were few and far between and successfully hailing one was a work of art demanding skill, gumption and a bit of luck. Taxi drivers were heavily regulated and obtaining a much-sought medallion was often a career goal. Drivers could eke out a living, service was overall professional with complaints focused on the occasional long routes and chattiness.

With the advent of ride-hailing services, you are guaranteed a ride within minutes at the location of your choosing for a relatively good price. But at what societal cost?

Traffic congestion is poor. Uber and Lyft drivers might be overall professional and courteous, but the quality of the driving has a wide range with most skewing to poor with blocked traffic, last-minute maneuvers and overall erraticism. A recent study indicated that traffic congestion in San Francisco increased 62 percent because of ride-hailing services. In addition, public transit is suffering as more people gravitate toward these cars rather than buses and light rail.

There is also concern that Uber and Lyft, despite raising money through recent initial public offerings, do not make money and drivers are starting to come around to the idea that they aren’t realizing the same fortune as those running the service. And a recent court case that saw a decision that drivers are indeed contractors and not employees was an indication that this issue might come up again as more people settle into their roles as drivers. This all adds up to the slow realization for many that perhaps all these rides were simply too good to be true. Because they were.

The taxi industry was ripe for change and both Uber and Lyft exploited that for profit. However, it also appears some drivers also feel exploited and government officials are also concerned about impact on both traffic and public transit. In San Francisco, there is movement toward establishing a tax on fares for transportation improvements. This is one step, but it might be a step toward others that include regulation of drivers for backgrounds, behavior and skill. That oversight would take it closer to the prior system we had, in which the taxi industry was regulated for just these things. So we may be heading full circle to a more regulated industry that performs the same services but in different ways. Standard Oil grew to a monopoly, was broken up, and the industry consolidated over time. Same with AT&T. Microsoft revamped its services after the antitrust case, suffered because of it, then grew again into a value rather than growth company. Other disrupting companies will have new oversight. Uber and Lyft will have to accommodate government time and again as it grows and settles into its industry — perhaps they might even require medallions. New and emerging companies will settle down and become old companies with more government oversight. That’s the American way, at least since the Sherman Antitrust Act of 1890 and Theodore Roosevelt’s Square Deal of 1910.

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An exhibit at the de Young Museum “From Gold Mining to Data Mining” seeks to illustrate the tension created by disruption outside of the corporate world parlance. In the posted abstract on the exhibit, it describes how rapid growth or decline has served to displace people over the years. During the Gold Rush, it was the Ohlones. During the tech boom, it is the lower and middle class. Put simply, the rush to riches comes at the expense of current communities.

The concept is strong and certainly current.

Jon Mays is the editor in chief of the Daily Journal. He can be reached at jon@smdailyjournal.com. Follow Jon on Twitter @jonmays.