Why Uber Should Let the Government Do Its Background Checks

The process Uber uses to screen prospective drivers has come under scrutiny again this week. It started when a passenger in New Delhi accused her Uber driver of rape, leading to a nationwide ban of the car service in India. Then came a lawsuit from Los Angeles and San Francisco, which accused Uber of misleading passengers about the background checks for its drivers. 

Uber and Lyft, its main competitor, both maintain that they can do background checks as well as regulators. Each company contracts with a private vendor to screens potential drivers for past violations, a process that allows new workers to get on the road faster than a regulatory review could allow. Private background checks also fulfill a basic philosophical premise of the smartphone car services: to minimize official oversight, which is viewed as an impediment to innovation. An article in the New York Times on Wednesday outlines Uber’s state-by-state battle to resist subjecting drivers to the same background checks that other professional drivers face. The company and its main rival could afford to let up on this crusade—and might actually benefit from doing so. 

The long-brewing battle over Uber’s background checks started in earnest last New Year’s Eve, when a driver in San Francisco struck and killed a 6-year-old girl. The driver, who had previously been convicted of reckless driving, was charged with vehicular manslaughter earlier this week. In the wake of the accident, Uber pledged to improve its process for background checks, and the company now says it checks criminal databases and the national sex offender registry and uses ongoing monitoring of motor vehicle records. 

But that’s not enough for George Gascón, San Francisco’s district attorney. He faults Uber and Lyft for failing to use fingerprint scanning, among other alleged shortcomings. “You are not using an industry-leading background process if you are not fingerprinting your drivers,” Gascón said at a news conference. (Neither Uber nor Lyft responded to requests to discuss their practices on background checks.) 

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Professional drivers are often subject to fingerprinting, as are security guards, employees at financial-service companies, and pharmaceutical workers. But employers can check someone’s prints against government databases only when it is required by state law, says Robert McCrie, a professor at John Jay College of Criminal Justice. One advantage of a fingerprint scan is that it will find past criminal activity that might not show up if someone is lying about his or her identity. Fingerprint scans are also the only reliable way to check for open warrants, according to McCrie, although perhaps without much better results than other techniques. Fingerprints are still best, he says, “but to a large extent, all employers have a good chance in today’s high-tech world of getting good understanding of whether their employees have a criminal record.” 

Uber insists its drivers are something different than traditional for-hire drivers and says that regulations that apply to the car service industry are set up to squeeze out new competition. But Uber would survive just fine if it used only drivers who had gone through the standard licensing process. We know this is true because of New York City, a market where every single one of Uber’s drivers must have a commercial drivers license—and that means the drivers have been fingerprinted and run through the background checks administered by the city’s Taxi and Limousine Commission. Despite this burden, Uber has managed to disrupt the market enough to send the price of taxi medallions plummeting

Government background checks might slow down its pace of adding each new driver, but only to the same speed as everyone else in the industry (assuming Lyft follows suit). At the same time, doing so would neutralize a major thread of the public criticism against the company. It becomes harder to blame Uber for driver behavior once regulators are putting their seal of approval on the process.

Of course, it’s not at all clear that Uber needs to worry about its current spate of terrible publicity. The company recently raised an investment round that valued it at $40 billion, and it seems headed for the type of initial public offering that makes investors, if perhaps not customers, willing to ignore pretty much everything else.

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11 December 2014 | 3:10 pm – Source: businessweek.com


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