Rationales for Regulating Uber: Driving Regulators to Seek New Solutions

Abstract

This paper conducts an enquiry into whether various regulatory theories suggest that there exists a legitimate rationale for regulating Uber in a New Zealand context. Uber is a company which provides an Internet-based mobile phone application that connects passengers and drivers. Uber presents regulators with many challenges, some of which this paper focuses on selectively. This paper outlines in brief Uber as a company and the service that it provides. It then describes the somewhat unique New Zealand taxi industry and associated regulations, and also the regulation pertaining to private hire vehicles. The conclusion of this discussion is that Uber is effectively a competitor in the taxi industry, even though it is regulated as a private hire service.

The overarching enquiry of this paper whether there is regulatory avoidance, or instead under- or over- inclusive rules. A discussion of regulatory compliance theory provides a basis on which to assess whether Uber is legitimately or illegitimately avoiding existing regulation, or whether the existing rules are failing to meet their intended purpose(s). This issue is discussed throughout the paper in relation to the following sections.

Regulatory theories relating to innovation, the sharing economy and welfare economics provide different perspectives as to whether regulatory intervention would be justified, particularly when focussing on the purposes of regulating. Then, a comparative discussion of Uber in England and California highlights how other jurisdictions are approaching Uber in various contexts. This sheds light on how other regulators perceive the challenges that Uber presents, and the rationales for imposing regulation on different areas of Uber’s operations.