A transportation network company (TNC) (sometimes known as mobility service providers or MSPs), connects via websites and mobile apps, pairing passengers with drivers who provide such passengers with transportation on the driver's non-commercial vehicle. TNCs include Gett, Lyft, Juno, Cabify, Uber, goCatch, Via, Ola Cabs, GoCar, GO-JEK, Careem, Wingz, Taxify, GrabTaxi, Didi Kuaidi, Easy Taxi, 99 and Fasten. TNCs are examples of the sharing economy.
In 2013, the California Public Utilities Commission defined, for regulation purposes, transportation network company as a company that uses an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles.
Virginia defines a TNC as a company that "provides prearranged rides for compensation using a digital platform that connects passengers with drivers using a personal vehicle." Other states have also regulated TNCs, including Massachusetts.
TNC platforms have sometimes been called "ridesharing", but transportation experts prefer the term "ridesourcing" to clarify that drivers do not share a destination with their passengers. The term "ridesourcing" means the outsourcing of rides.
Taxi industry groups have argued that TNCs are illegal taxicab operations which take away their business. Several communities, governments, and organizations have established rules and regulations that specifically govern TNCs and, in some jurisdictions, TNCs are completely illegal to operate. For information, see Uber protests and legal actions.
For the drivers, TNCs provide "flexible and independent jobs".
TNCs allegedly reduce congestion because, since the cars "can't accept street hails, they do much less unnecessary driving-around than either government-licensed/regulated taxi cabs (who are cruising for hails) or individuals (who are looking for a parking spot)."
A March 2016 study by Judd Cramer and Alan B. Krueger of the National Bureau of Economic Research showed that a ride via a TNC uses capacity more efficiently than traditional taxicabs as TNC drivers are more likely to have a passenger than a taxicab.
Another variation of a TNC is to use online marketplaces to provide drivers who drive the customer's personal vehicle for them. Examples include Dryver, IDriveYourCar.com, and WeDrive. In these models, customers typically reserve a driver who arrives at their location, takes them wherever they need to go in their own car, and then returns the car and the customer home at the end of the reservation.
TNCs increase traffic congestion in some cities, due to the large number of TNC vehicles constantly cruising waiting for customers. Bruce Schaller's report based on New York City data suggest that TNCs are unsustainable. TNC model allows avoiding the costs of insurance, sales tax, mechanical vehicle inspections, and providing a universally-accessible service. Some critics believes that TNCs success comes from being parasitic on the cities in which it operates. New regulations are proposed to compensate some of these disadvantages.
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