Ridesharing Exercise
Some airports have restrictions regarding which transportation services are allowed to pick up passengers. Logan airport here in Boston has imposed restrictions that are among the most strict among any airport in the United States. As a result, ridesharing options are either much more expensive or simply unavailable (Boston Globe, 2016).
In this exercise, you will represent one of the 4 parties involved in this case and be asked to make the best case for your group’s interest. Each group will be given roughly 5 minutes to prepare their case, and then 2 minutes to present their arguments or make their decision. You should build a case to the Attorney General’s office that identifies and leverages elements of the competition toolkit we’ve gone over in class.
Group 1: Massport (Entity that runs Logan Airport)
Massport has depended for years on a “volunteer army” of taxis to help move people to and from the airport. Disruption to this traditional ecosystem could be beneficial, but could also create significant problems for travellers if taxis disappear. Traffic flow is a constant challenge at the airport and the introduction of ride-sharing services such as Uber and Lyft has created problems as drivers stop to pick up passengers in places outside of designated pick-up areas. Massport is also concerned about the safety of passengers who leave the airport. As a result, they have only permitted Uber Black and Uber SUV (high-priced options) from picking up at the limousine section.
Group 2: Boston’s Hackney Carriage Unit (The taxi authority run by the Boston Police Department)
The HCU is in charge of regulating the taxi industry and ensuring the safety of the public. They manage the medallions (government-issued license) that each taxi must have in order to pick up passengers in the city and surrounding areas. The unit is as old as the police department itself. They have a 57 page document that lays out the rules for taxi drivers and controls prices such as meter rates. They view ride-sharing services as operating outside of the rule of law.
Group 3: Taxi companies
Taxi operators pay a large sum ($700,000 in 2014) to buy one of the 1,800 medallions in circulation for Boston in a secondary market. The medallions were originally given out for free but are bought and sold when drivers retire. The entry of ride sharing services has significantly reduced the value of a medallion, leaving taxi owners either significantly in debt, or without an asset that is often the largest component of their retirement. The ride-sharing services are taking away from their business while not being required to adhere to the same regulations.
Group 4: Attorney General’s office
Consumers have complained to the Massachusetts Attorney General, Maura Healey, that taxi prices are too high from the airport. Furthermore, visitors to Boston are confused when they are blocked from using ride-sharing services. In some cases, the apps simple say that no cars are available around the airport. The AG is considering whether restrictions on ride-sharing services at the airport constitute anti-competitive behavior and produce a net harm for society.
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