These days, a fateful debate is taking place in the Knesset over proposed legislation to promote shared transport in Israel, alongside compensation mechanisms for taxi license holders. The goals of the reform are clear: advancing individual freedom, increasing efficiency, and introducing real competition into the stagnant transportation market. It will allow consumers to choose cheaper and more convenient alternatives, reduce burdensome regulation, and encourage technological innovation.
As part of these deliberations, alternatives are being examined for compensating taxi drivers who choose to retire or to transition to the shared model. One thing is important to understand: a taxi license is not an acquired right guaranteeing a fixed value in perpetuity. The state is entitled to issue additional licenses at any time, as it has done in the past, and their prices are inherently volatile in any case. While license holders have become accustomed to rely on the closed market, competition must be allowed in the name of economic freedom and the broader public interest.
One reasonable and fair compensation mechanism could be a temporary fee on ride-sharing trips, which would fund the industry’s adjustment period without burdening the state budget or taxpayers. This approach encourages efficiency, since the ones to fund the changes required in the economy will be those who directly benefit from the new service.
The global success of shared transport proves that this is not a gamble but a verified model. In cities like Berlin and Madrid, the integration of smart transportation apps led to a dramatic decline in private car ownership among young people. In Singapore and Seattle, flexible shared transport models have replaced cumbersome, near-empty bus lines with dynamic, on-demand services, reducing peak-hour traffic congestion by 15%.
The outcome in these places is consistent: less pollution, less frustrating searches for parking, and above all – the precious time wasted in traffic jams returned to citizens.
In Israel, shared transport is expected to reduce congestion by shifting passengers from private vehicles to a more efficient network. Ride-sharing drivers will take cars off regular lanes and provide the “last mile” solution missing from public transportation. A short shared ride from home to the train station will enable a quick commute to employment centers without the need for a costly and frustrating search for parking.
Global experience shows that countries that have embraced shared transport have seen increases in growth and employment thanks to improved mobility. Allowing ride-sharing vehicles to operate in public transportation lanes frees up the roads and maximizes passenger capacity across vehicles in general.
At the individual and business level, the reform will lower costs and make mobility more accessible in a growing and densely populated country. Israel needs this change now more than ever to sustain its economic and social momentum.
Opponents of ride-sharing, and in particular those opposed to the entry of companies like Uber and Lyft, argue that the new drivers’ competence cannot be relied upon. Taxi drivers are experienced professionals accustomed to meeting safety and service standards not every casual driver can achieve, and it is often easier to conduct background checks on them.
It may well be that the claim taxi drivers are better professionals than shared-transport drivers is true. However, as with the hiring of any professional, one can hire a certified, experienced and trained individual, or hire someone with less knowledge and experience for reasons of lower cost or convenience. That is the very essence of freedom: the right to choose.
It is time to clear the obsolete regulatory road jam and allow Israeli citizens to travel freely and efficiently at a fair price.
(First appeared in Hebrew in Makor Rishon)
