By now, transportation network companies are the fastest growing car service type within the For-Hire transportation industry with huge following and subscriber base (i.e. Uber & Lyft). Even though these companies claim they are only an APP and not a transportation company, the argument is that by claiming so, they are avoiding having to comply with strict industry regulations the rest of the For-Hire industry is subject to. For example:
- Driver’s hack license (Regular level 2 background checks, drug test and physical certificates).
- Vehicle inspection certificate (usually done by county’s inspection shops).
- For-Hire Vehicle commercial insurance ($300,000 minimum up to 1.5 million).
- Operating permits (County/Airport/Seaport).
- Workers compensation fund/insurance.
NOTE: There are exceptions to above items in cities like NYC for example. In New York City, anyone caught operating without the required permits/licenses/insurance is subject to fines and citations (both driver and sponsoring company gets a citation/fine).
Regardless of being banned from some countries, states, counties and cities, these services are most popular due to ease of access (via Android & iOS apps), availability, and if using their lower vehicle/service classification (i.e. Uber Pool, Uber X, etc.) pricing is very competitive in comparison with regulated and complying transportation services like taxi, neighborhood car service & limousine services (not always the case. See “service cons” section).
TNC (Transportation Network Company) service pros:
- Availability: Due to its popularity and lack of regulation compliance, virtually everyone with a car and a valid driver’s license can drive for a TNC. Therefore, currently there is more than enough availability as to where the supply surpasses the demand.
- On-demand: Because of its supply availability, there is no need to reserve in-advance and App subscribers usually have no issues finding a nearby ride (except in the event you require a specialty vehicle like a stretch limousine, van, minibus or need a car seat for you child).
- Pricing: In general, TNC fares (lower bracket) are very competitive when compared with taxis, neighborhood car service and limousine companies (even though the occasional sticker shock/price surge and the now popular “vomit scam” by Uber drivers. See cons section).
- Optional driver gratuity: Tipping the driver is optional and not a mandatory condition as with most Executive car service & Limousine companies.
TNC (Transportation Network Company) service cons:
- What Uber doesn’t want you to read: Arbitration Agreement, Disclaimers; Limitation of Liability; Indemnity, etc…
While the vast majority of “Ride Sharing App” users do really believe they are using a “For Hire Regulated” service such as a Taxi, Limo, Luxury Sedan, Corporate Transportation, Black Car Services and so on, but the fact is that these ride sharing companies have “convinced law makers and elected officials” that these apps are not transportation companies and merely a third party application to connect riders with driver to “share a ride” and are not subjected to offer riders/users the same protections riding a “regulated For Hire service” offers. As an example, here is a small quotation taken from Uber terms of service:
“6. Disclaimers; Limitation of Liability; Indemnity.
THE SERVICES ARE PROVIDED “AS IS” AND “AS AVAILABLE.” UBER DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY, NOT EXPRESSLY SET OUT IN THESE TERMS, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. IN ADDITION, UBER MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE REGARDING THE RELIABILITY, TIMELINESS, QUALITY, SUITABILITY, OR AVAILABILITY OF THE SERVICES OR ANY SERVICES OR GOODS REQUESTED THROUGH THE USE OF THE SERVICES, OR THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. UBER DOES NOT GUARANTEE THE QUALITY, SUITABILITY, SAFETY OR ABILITY OF THIRD PARTY PROVIDERS. YOU AGREE THAT THE ENTIRE RISK ARISING OUT OF YOUR USE OF THE SERVICES, AND ANY SERVICE OR GOOD REQUESTED IN CONNECTION THEREWITH, REMAINS SOLELY WITH YOU, TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW.”
- No live contact with TNC/dispatch operator: If you have an immediate issue with your request, there is virtually no way of contacting a TNC and get a live operator/TNC representative to assist you. You must try and solve any immediate issues directly with assigned driver or cancel ride and re-book.
- In-advance reservations: At the time of this writing, you cannot book in-advance. As some TNC subscribers have found. Despite the oversupply, if you need to be picked-up in the suburbs or in a non-popular city, it could be challenging trying to get a ride early in the morning for that job interview or fight you need to catch.
- Reliability: in contrast to black car, executive car & limo service and even neighborhood taxis, TNC drivers might cancel and reject your request if they feel job is not in their best interest and leave you stranded. Another reliability issue is mechanical condition of vehicle which is not county regulated.
- Professionalism: even though there is a very good chance that your TNC driver is a professional either because he/she has worked for a limo company in the past (or does TNC as an additional source of income with their personal vehicle) or just because he/she is making a career out driving for Uber or Lyft and tries to provide as good of a service as any professional chauffeur; the vast majority of TNC drivers take the job as a pastime, transitional job or are moonlighters looking for some extra income.
- Price Sticker Shock/Fare Surcharges/Fare volatility: In general, TNC fares/rates stay within App fare-estimate for local and short trips (within city/county) and off-peak hours. The issue affecting most victims of fare volatility occurs when taking trips out-of-town, during peak-hours and holidays. This is mainly because not only are you being charged in a mileage based manner, but also driving time and demand (holidays/peak hours. In my opinion, TNC companies are not doing this to give you a “price sticker shock” but as a way of an incentive to motivate drivers to work during peak hours and on these special dates). In contrast, an executive/black car or limo company will give you a fixed price regardless of time it takes to get you from Point-A to Point-B (even though most of the executive/black car or limo companies will add a fixed surcharge on major-holidays, special-events and/or after-hours/early-morning pickups (usually in the range of $10.00 ~ $20.00 for after-hours/early-morning pickups/special-events and/or an additional equivalent of one hour at vehicle’s hourly rate for family oriented major-holidays like Thanksgiving, Christmas, New Year, 4th of July).