Taxis vs. Uber still a hot topic

Moderated by Tom Sabulis

House Bill 907 did not make it over to the Senate on Crossover Day last week, so legislation to regulate “rideshare” car services such as Uber is stalled. But the debate continues. Should Uber be regulated? Should taxis be de-regulated? Or both? Here are columns from an Uber user – and driver – and cab operator.

Comenting is open.

City allows theft of taxi market share

By Scott McCandliss

Because House Bill 907 is no longer active, Uber’s unregulated and irresponsible taxi service will continue to operate throughout Atlanta — thumbing its nose at the city’s longstanding public safety requirements for taxis.

There have been a number of articles in the media recently regarding the so-called “new ideas” in personal transportation. Unfortunately, most contain as much misinformation as information.

The word “taxicab” comes from “taximeter,” not the other way around as many think. Taxicabs diverged from livery cabs after they began using taximeters. Livery cars, which include for-hire limousines and sedans, must be prearranged precisely because they don’t use meters, so the price must be determined in advance of the trip. Taximeters allow the price is finalized at the end of the trip — which, in turn, allows taxicabs to be spontaneous.

The use of taximeters sparked the need for regulation. Taxicabs are required to display the meter price, vehicle and company identification and contact phone number on both sides of the vehicle to protect the public and the consumer. They are required to display a top sign, usually marked “Taxi,” to announce that it’s a public vehicle for hire, in order to prevent discrimination. They must carry special, expensive, vehicle-for-hire insurance, and be regularly inspected to protect public safety. They also must display the driver’s permit and the taximeter in plain sight to protect the consumer.

Since each city has different needs, taxicabs are regulated at the local level, requiring a separate permit for each jurisdiction in which they operate. Enter Uber and Lyft, who adamantly refuse to admit they are taxis. I was told recently by a senior policy adviser to the mayor that the city has no authority over Uber and Lyft because they aren’t taxicabs. I vehemently disagree. They are taxicabs because they use meters (albeit through an app whose algorithm calculations remain a closely guarded secret).

People often complain that some taxicabs don’t take credit cards. But Uber and Lyft don’t take cash. Uber and Lyft discriminate against poor people who have neither a credit card nor a smartphone. They also discriminate against people with disabilities, since they don’t offer wheelchair-accessible vehicles.

The bottom line is that anything with a meter is a taxicab. It isn’t that the rules don’t apply to outfits like Uber and Lyft; it’s simply that these outfits brazenly break the rules.

My regulatory compliance costs are over $20,000 per year. Theirs are zero, because they simply ignore the regulations they don’t like. In that light, these outfits are not earning their market share; they are stealing it.

These companies are more than just an app. They are taxi companies. As such, they should be held to the same regulatory and safety standards as the rest of us in the taxi industry.

Scott McCandliss is a driver for Buckhead Safety Cab in Atlanta.

Regulating Uber, Lyft is not the answer

By A. Jarrod Jenkins

Two weeks ago, New York City auctioned taxi medallions for the first time in six years. The 297 winning bids ranged from $805,201 to $965,000.

Similar to New York City, Atlanta has withheld the release of its remaining medallions out of concern for an overabundance of taxis. If you have ever tried to catch a cab in Atlanta, you would realize the irony of that reasoning.

Uber and Lyft utilize smartphones to make the pickup process faster. Uber contracts with both commercially licensed drivers and non-commercial drivers (including myself) to transport its users, while Lyft, the company with the iconic pink mustache displayed on the grille of its drivers’ cars, relies entirely on non-commercial drivers.

Of course, the taxi lobby is not too thrilled about Uber and Lyft’s meteoric rise. Taxi lobbies across the country, including Georgia, have decided a) they can beat Uber and Lyft and/or b) they cannot beat Uber and Lyft, but will fight them anyway.

Their first attempt to stop Uber and Lyft in Georgia was House Bill 907, which sought to regulate “transportation referral service providers.” Although the bill did not pass out of the House on Crossover Day last week, HB 907 won’t be the lobby’s last attempt to stop Uber and Lyft.

To clarify, “taxi lobby” means taxi companies, not drivers. Taxi drivers do not want to pay $65,000 — apparently the going rate in Atlanta — for a medallion.

I understand the frustration from taxi companies. Rick Hewatt is a third-generation CEO of Atlanta Checker Cab. But his anger, voiced previously on the AJC opinion page, is highly misplaced. Using a transportation referral service provider is no different from using Facebook to find a ride home during Atlanta’s snowpocalypse. Certainly, Facebook users do not need a medallion to pick up someone with his or her consent.

I have served as both an Uber passenger and driver, so I know the argument that transportation referral service providers are unsafe is ill-conceived. In addition to background checks, these companies have a rating system that holds passengers and drivers accountable. Further, Uber and Lyft passengers have the name and mobile phone number of their driver, and vice versa. Consequently, there is greater incentive for driver/passenger interaction. My first passenger? The daughter of a state legislator.

Legislation such as HB 907 is counterproductive to Georgia’s rise as a hub for transportation reform. In addition to Georgia being fourth in electric-vehicle adoption, Atlanta is home to AT&T’s Drive Studio for connected car research and Panasonic’s Innovation Center.

Let’s face it: Uber and Lyft are here to stay. Rather than inhibiting people’s ability to make money on the side or receive efficient, safe transportation, taxi companies should focus on repealing laws that require costly medallions if they want any chance at survival.

A. Jarrod Jenkins is an Atlanta lawyer.

10 comments Add your comment

The Customer

March 11th, 2014
10:18 am

The Uber model works well for the customer, the taxi model is unpredictable. Take a look at the reviews in the App Store for Uber versus Taxi Magic to demonstrate the preference for the Uber model. Is Uber an unfair business model and/or is the taxi system a broken model? I guess our ‘effective’ political system will sort this out. In the end, i hope customer satisfaction drives the result. Any successful business knows that.

RideSharing Fraud

March 11th, 2014
9:14 am

The whole ride-sharing business model is a power grab played out in slow motion on local government authority and local government revenue. Note that there are (still) no smartphone-hail / e-hail / ride-sharing permits and law-breaking ride-sharers conveniently abuse this regulatory loophole to the fullest. When confronted, these violators deny being in a taxi business yet “forget” the fact that when founded, many even named their companies to include words like “taxi” or “cab”. For example, Uber’s original name is “Uber Cab”. Ride-sharing companies are absolutely in a taxi business, and denying it is laughable. This status quo cannot continue. It lasted far too long. The golden days of Wild West regulatory abuse may soon be over for ride-sharing law-breakers. Regulators all over the world are beginning to grasp that this flawed business model exists only the expense of reduced local revenues to our cities and our local businesses. Some US cities have outlawed ride-sharing companies completely (for non-compliance, bad business ethics, and etc.) or are in the process of outlawing them. On international stage, China has outlawed Uber recently in a few major cities. Others are beginning to sell smartphone-hail permits to put some regulatory cap over ride-sharer’s aggressive uncontrolled and frequently manipulative tactics. The fact that we are comparing legitimate small businesses owned by local taxi drivers and local fleets, to few oligarchic multi-billion dollar companies that act as a ride-sharing cartel and that operate all over the world and use technology as an excuse to break laws and regulations is utterly unfair (to say the least).

Our Lord and Savior Jesus Christ

March 10th, 2014
9:10 pm

Emmanuel makes a good argument for Uber as a technological company and therefore not subject to the same regulation as a transportation company. Too bad he is not the end-all in American jurisprudence.

I don’t know about you, but to me, this hot topic has the same feel as Obamacare. Most of us, as did The US Supreme Court, believed Obama’s individual health care mandate was in no way justified by Congress’ power to regulate interstate commerce. But the Court ultimately declared Obamacare Constitutional, a tax.

My point is that Taxi companies don’t have a snow bird’s chance in hell of having local governments recognize Uber as a transportation company and subject to the regulations thereof; and rightly so. But if all else fails, they can take it to the courts, precisely The United States Supreme Court. Isn’t that horrible?

Amen?

Emmanuel

March 10th, 2014
6:37 pm

Uber is a technology company. Technology is defined as a better way of doing things. Uber built technology to efficiently dispatch vehicles, on demand. The technology is embodied in the Uber mobile app; it represents a better way to hail transportation.

Taxi companies are not technology companies; they are transportation companies. For one, these companies own and rent taxi cabs to taxi drivers at a weekly rate. For at least this reason, the companies are generally required to commercially insure the cars they themselves rent to others. This makes sense.

The question thus becomes whether technology companies such as Uber should endure the same regulations as transportation companies. Put differently, should a technology company that develops airline-booking software (e.g., Priceline) be required to insure and manage all the airplanes using that software?

Indeed, applying the same regulations to technology and transportation companies makes no sense. Uber does not rent cars to Uber drivers. As, Jarrod noted, Uber drivers use their own personal or commercial vehicles to fulfill ride requests received via the Uber app. Again, Uber is simply a piece of technology –a digital dispatcher. Nothing more.

But wait, what specific regulations are we even talking about here? Require drivers to have insurance? Driver background checks? Car inspections? Non-discriminatory practices (i.e., anyone can use the Uber app)? Uber already performs these “regulations.”

Moreover, that Taxicabs and Uber can happily coexist should be enough to table this issue. Forever.

Our Lord and Savior Jesus Christ

March 10th, 2014
5:57 pm

Allow me to use the brilliance of Ray Stevens regarding this hot topic. The illegal aliens have taken this thing too far. They have entered the country illegally, gained employment, and now have gone into the Uber and Lyft business. It is for this reason alone that I agree with Scott McCandliss. The city is allowing theft of Taxi market share.

But if innovative law abiding Americans had formed the Uber and Lyft business, undoubtedly it would have been a stroke of genius. They would have managed to efficiently meet the needs of average citizens while bypassing the stifling burdensome regulation of government.

Now if poor people wanted to take advantage of this legal service, they would need to acquire a credit card, smart phone, and a conceal carry permit like everyone else. Handicapped Americans would continue using Taxi services until the startup company decided if it makes business sense to respond to their needs.

What a wonderful country it would be.

Amen?

Alex Parton

March 10th, 2014
4:58 pm

Also, in response to the first article: You state that Uber and Lyft don’t follow regulations, but I rarely find the cab drivers ever turn on the meter and than just tell me an arbitrary number that they deem worthy. Wouldn’t this be considered breaking the rules and regulations that you are using as the base of your argument? Its true, I could sit there and do the math from the side of the cab that states how much it is on the side of the car, but for people who should be following these rules and regulations I shouldn’t have to do that. Obviously, this statement is broad and I can’t say all drivers do this, but it happens way more often than not.

Alex Parton

March 10th, 2014
4:50 pm

I must say, I agree wholeheartedly with the second article. Not only do I feel more safe with the background check that I know companies like Lyft and Uber do, but I also don’t feel ripped off after getting out of one of their vehicles.

Market Jenius

March 10th, 2014
4:40 pm

In these economic times, it makes no sense to punish start-up companies who use their ingenuity to make our world a more efficient, more connected place. It’s understandably a tough situation for both parties, however, it should not be an all or nothing solution. Hopefully both parties realize that we are all here together and make a compromise.

Latoya Simmons

March 10th, 2014
4:31 pm

In response the “Regulating Uber, Lyft is not the answer” commentary: It’s no secret that public transportation in Atlanta could use a face Lyft and Uber amounts of planning and funding to improve the current issue. Maybe the two business listed above are a start. I support these alternative taxi methods until something else better is agreed upon a the local, state, and possibly even federal levels.

Latoya Simmons

March 10th, 2014
4:15 pm

Great article; I completely agree.