Regulating the New Economy: Uber, Lyft & Fingerprinting
Companies like Uber and Lyft profess to be shaking up the old economy. As has happened with every shake up, there has been a legal up—that is, endeavors to regulate the changes. In some cases, these regulations are at the behest of influential players in the established economic order who wish to maintain their economic dominance. In other cases, the regulations are motivated for more benign reasons, such as protecting the public.
As this is being written, Uber and Lyft are involved in a legal struggle in Texas. The city of Austin is considering a program for fingerprinting drivers of these services. Lyft and Uber are both opposed to this—mainly on the grounds that they fear this will start the slow march towards ever-increasing regulation. This is not the first shootout in Texas over fingerprinting: Houston mandated the fingerprinting of drivers and Lyft responded by abandoning the city. Uber elected to remain and operate within the requirement. While the matter of fingerprinting is interesting in itself and will be the focus of the discussion to follow, there is also the general matter of imposing new regulations on these new approaches to business. Not being a lawyer, I will focus on the ethics of this matter on the grounds that I contend regulatory laws and policies must have a solid moral foundation.
When approaching the regulation of a new business, it is natural to look for precedents in regards to existing businesses. In the case of Uber and Lyft, it is natural to turn to the regulation of taxi and limousine companies on the grounds that they offer the same basic service: transportation via automobiles. In general, taxi drivers are required to undergo fingerprinting and a background check. As should be expected, those in favor of having Lyft and Uber drivers undergo this process point to this fact and some make an argument based on consistency.
Consistency requires that the regulation of a new business should be modeled on the regulations of older businesses to the degree the businesses resemble each other. There are two foundations for consistency: logic and fairness. In regards to logic, the reasons that justify the regulations of the old business would apply to the new business to the degree they resemble each other. As such, if the fingerprinting of taxi drivers is justified, then the fingerprinting of Uber and Lyft drivers would be justified to the degree that the businesses have relevant similarities.
Fairness, which is a matter of ethics, requires that businesses that are relevantly similar be treated in similar ways. To use a specific example, if Lyft and Uber were able to avoid regulations that taxi companies have to deal with, then this would provide an unjust advantage—at least to the degree that Lyft and Uber are like taxi companies.
Companies like Uber and Lyft often try to avoid regulation by arguing that there are relevant differences between their companies and their competition such that they should not be subject to the same regulations. In the case of these ride sharing services, the two main concerns are whether or not these companies are relevantly similar to taxi companies and whether or not their drivers are relevantly similar to taxi drivers. The resemblance or lack thereof is not all or nothing: ride sharing services might be the same as taxi services in some important ways and very different in equally important ways.
While this is a specific matter about fingerprinting drivers, the general principle here is that if regulation of one aspect of a business is warranted, then it is also warranted in regards to businesses that are relevantly similar. As such, this principle would also apply to companies like Airbnd.
In the case of fingerprinting and background checks for drivers, I would contend that the ride sharing services are similar in relevant ways. After all, whether it is an Uber or a taxi, the passenger is put into a position of considerable vulnerability. As such, if the fingerprinting of taxi drivers is warranted, so is the fingerprinting of Uber and Lyft drivers. There is, of course, still the question of warrant. This leads to the general matter of justifying business regulations.
The first concern in regards to business regulations (and any laws that require or forbid) is whether or not there is a harm that is significant enough to justify regulation. As I usually do in such matters, I follow Mill’s principle of harm: the only justification for imposing on the liberty of a fully functioning adult is the prevention of harm to others. This is obviously subject to debate, but Mill’s arguments are rather compelling. Even if this principle is accepted, there is still a vast territory of dispute regarding the significance of the harms—that is, sorting out what level of harm justifies which level of regulation. To use a concrete example, some contend that even a submicroscopic level of voter fraud justifies a buffet of regulations ranging from voter ID requirements to ending early voting. To use another concrete example, some contend that any increase in gun regulations is unacceptable even in the face of significant levels of gun related deaths.
In the case at hand, the concern is whether or not there is a danger to public safety on the part of drive sharing drivers that needs to be addressed. It is clear that there is a danger—a driver could kidnap, assault or kill a passenger. However, the main issue here is whether or not the likelihood of such harms is high enough to warrant the imposition of fingerprinting. On the one hand, the fingerprinting is not a big deal in terms of time and cost. On the other hand, it is not without cost and the risk of attack by a driver is probably exceptionally low. In any case, the dispute comes down to a factual issue about the odds of attacks and a value assessment regarding the balance between the cost of the regulation (in terms of money, time, imposition, rights and so on) and the cost of the harm. My opinion is that fingerprinting does not seem an undue imposition given the (rather low) risk—but I do not have a very strong opinion on this point.
The second concern is the efficacy of the regulations in regards to the harm. There could be a significant harm that would warrant regulation to protect people, but the proposed regulation might be ineffective at achieving the goal. To use the Uber and Lyft example, the danger presented by drivers might be regarded as significant enough to justify imposing mandatory fingerprinting and the cost of said fingerprinting might be regarded as reasonable, but it might be the case that fingerprinting would not actually make passengers safer. To use another example, it might be true that voter fraud is a significant problem, but it could be the case that requiring voter ID would do nothing to address the fraud.
Since the justification for regulation is the prevention of harm, ineffective regulation would be unwarranted—provided that the defect lies in the regulation and not in, for example, a failure to actually enforce the regulations.
In the case of fingerprinting, it would seem to have some efficacy in screening out people who already have a criminal background. However, it would obviously not screen out people who do not have a record yet might present a danger. Because of this potential efficacy, I would not be opposed to requiring ride sharing drivers to undergo fingerprinting—but I am not strongly committed to this position and could easily change my position in the face of reasonable arguments.