Israel is facing a serious transportation crisis, one that has a direct impact on economic productivity, the cost-of-living and the welfare of millions of citizens. The increased road congestion is not only a problem of infrastructure, but the result of a centralized market structure and obsolete regulation that restricts the public’s ability to efficiently use mobility alternatives. The discussions being held these days in the Knesset Economic Affairs Committee regarding the bill to promote shared transportation offer at long last a solution to Israeli citizens’ transportation challenges, grounded in competition and economic liberty.
The bill is being led by MKs Dan Illouz, Moshe Passal, and Eitan Ginzburg, who initially promoted separate bills, but were wise enough to form a united front to advance the reform. Standing alongside them is the Minister of Transport, whose resolute support enabled the bill to pass its preliminary reading, and will hopefully be sufficient to see it enshrined in law. The cooperation between the three MKs and the Minister reflects a recognition that the current system has run its course, and the time has come to adopt the advanced technological models standard in most of the developed world – indeed, in most of the world period.
The proposed reform is based on the principles of efficiency and optimizing existing resources. The submitted model would allow private car owners who meet certain safety threshold requirements to provide paid transportation services through online applications. This solution is intended first and foremost to solve the “last mile” problem; that is, the distance that prevents many citizens from giving up on their private vehicles because of the difficulty to bridge the gap between their homes and train stations or employment centers.
The issue of compensating taxi drivers is an important part of the discussions. The bill acknowledges the historical reliance of taxi license holders on current policy and offers a fair compensation mechanism. The compensation will be funded by a temporary levy on shared rides that will be transferred to a designated trust, ensuring that the cost of the transition period will not be borne by the State budget or the taxpayers. However, it is important to stress the legal and economic principle that a government license is not a grant of permanent immunity from competition or technological changes in the economy: this is a goodwill gesture toward those who relied on the existing situation, and not a rigid right that must be honored.
Regarding the claims about the inadequate professionalism or safety of shared drivers, our policy paper and the bill stress the important of free choice. While taxi drivers are indeed professionals supervised by the State, Israeli consumers should have the right to choose between different levels of service and varying prices. The in-built technological rating and oversight systems in the applications have been globally found to be no less effective than the strict regulation of service and personal safety standards.
International experience in similar cities around the world show that the integration of shared transportation leads to a significant reduction in road congestion (particularly during peak hours), a decline in private car ownership, and an improvement in transportation accessibility. In Israel, permitting ridesharing vehicles to use public transportation lanes would maximize passenger capacity on existing roads and free up valuable time resources.
In conclusion, the bill being advanced by MKs Illouz, Passal, and Ginzburg and backed by the Ministry of Transport is a necessary step toward ensuring the continued growth of the Israeli economy. Removing regulatory barriers and opening the market to competition will allow Israeli citizens to enjoy more efficient, accessible, and affordable transportation, as well as greater personal and economic freedom.
(First appeared in Hebrew in B’Sheva)
