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Voters Strengthen Right-to-repair and Give Ride-hailing Companies a Boost

As part of the recent general US elections, some states ran referendums with high importance for mobility. Voters in Massachusetts and California had their say on two ballots that may have a significant impact on the auto industry. [1,2]

The amendment extending a right-to-repair for car owners passed with 75% in Massachusetts and ensures that starting in 2022 the data in a car, including wirelessly transmitted data, will be owned by the customer and must be open and available to use for repair. On the other coast voters in California have approved a measure by 58% that allows ride-hailing companies to continue to treat drivers as independent contractors, avoiding the more stringent employment laws passed last year.

The employment law passed last year in California would have forced companies such as Uber and Lyft to treat drivers as more traditional employees. This would have meant a much higher cost to the companies, but also a lack of flexibility on the part of drivers. This business model, which companies like Uber and Lyft spent heavily to defend in this vote, classifies the ride-hailing companies as technology companies and not as transportation providers.[2] 

The data cars generate has been increasing massively, and the measure in Massachusetts that voters supported gives them much more control over this data. As car functionality becomes increasingly a matter of data proponents of a right-to-repair have been arguing that accessibility by owners and non-company mechanics is essential. The current legislation builds on legislation from 2012 where Massachusetts enforced an open standard for diagnostic ports, which means any mechanic could repair a car. This quickly spread to all other states with OEM’s signing a memorandum of understanding with the notable exception of Tesla (though this may well be due to the all-electric nature of its cars that have no need of the same diagnostic structure). Onboard data remains essential for mechanical diagnostic, but wirelessly transmitted data has become increasingly relevant, and until now has been off-limits to owners and independent mechanics.[1] 

Proponents of the new legislation point out that this is a win for car owners because, as Kyle Wiens, founder of California-based iFixit, said, “If you can’t fix it, you don’t own it.”[1] Opponents and car manufactures, however, point out that there are potential dangers to enforcing such an open system. 

 

Personal comment

The legislation passed in Massachusetts with significant popular support. This presents a challenge to automakers and the dealership model. By building in proprietary diagnostic functions OEM’s could ensure a constant flow of repairs to the dealers that sell their vehicles. This is another pressure angle on the auto companies that are already under intense pressure. 

The outcome of proposition 22 will have a huge impact on ride-hailing companies' business model for as long as they need human drivers to operate the cars. It is potentially also a good sign for automakers, as it signals that Uber and Lyft define themselves as essentially mobility platforms instead of transportation companies.

For the drivers, it is less clear whether this special classification for ride-hailing companies is positive or not. It means they retain flexibility and do not need to pass on higher costs to potential customers, but it also means less financial and health security. 

 

Written by Joshua Bronson, RISE Mobility & Systems.

 

Sources

1. 2020-11-04 Massachusetts voters pass a right-to-repair measure, giving them unprecedented access to their car data
2. 2020-11-03 California voters approve Prop. 22, allowing Uber and Lyft drivers to remain independent contractors