DENVER (AP) — Frustrated and angry, more than 100 cabbies
pulled up outside the Colorado Statehouse early this legislative
session to protest tech startups known as ridesharing services.
The
taxi drivers say the emerging firms, which allow passengers to hail
rides with the swipe of a smartphone, are avoiding costly requirements
that they and other commercial drivers are forced to follow.
Ridesharing
company officials say they’re open to regulation and point to
self-imposed controls such as criminal background checks as proof of
their willingness to cooperate. They’re also pushing back, saying
critics and protesters are only trying to suppress competition and
legislate them out of business.
The dispute in Denver mirrors
similar fights playing out across the nation as state lawmakers and city
government officials consider how to regulate emerging Web-based
businesses that provide a service similar to that offered by traditional
cab and limo companies, but under a distinctly different model.
"You know, change isn’t easy," said Colorado Democratic Rep. Cheri Jahn. "But sometimes
it’s time to move forward."
The
companies use mobile apps that connect passengers to drivers, often
everyday people seeking extra income by picking up fares as they commute
or run errands. Passengers pay through the app and can even tip
electronically.
One well-known firm, Uber, operates in more than
70 cities around the world, offering everything from quick rides to
luxury service.
Another, Lyft, has become known for pink mustaches on front bumpers and does business in more than 20
U.S. cities.
Neither
has publicly released financial figures or user statistics. But their
entry into the market has been disruptive, according to traditional cab
and limo services that have raised the loudest opposition.
"There’s
all kinds of ways to avoid costs, which goes to the corporate bottom
line," said Al LaGasse, CEO of the Taxicab, Limousine & Paratransit
Association. "But is that really in the public’s interest?"
The ridesharing companies say they welcome regulation, but not thinly veiled attempts to shut them out.

"We’re
open to having a conversation on how to create a permanent home in the
regulatory scheme," said Uber spokeswoman Nairi Hourdajian. But proposed
bills that have "the clear intent of eliminating choice for consumers
and opportunities for drivers are not the way to go about this."
Public
officials have to sort out several topics, including insurance,
background checks and price structure. Also at issue is the definition
of "ridesharing service."
They realize something has to be done,
otherwise cab and limo companies could simply say they’re in the
ridesharing business and avoid expenses such as painting vehicles,
installing meters, obtaining permits and keeping mandated maintenance
schedules.
"So why would you stay a cab company?" asked Doug Dean,
the head of Colorado’s Public Utilities Commission, at a hearing last
month.
It’s difficult to determine the exact scope of efforts to
regulate ridesharing companies, said Douglas Shinkle, of the National
Council of State Legislatures, a Washington, D.C.-based nonpartisan
nonprofit that monitors and researches state governments. Some proposals
have come from state lawmakers, some from city councils and others,
such as California, from state agencies, he said.
Arizona, Colorado, Georgia and Maryland all have had legislation pending this year, Shinkle said. No
proposal has passed.
The
attempt at regulation in Georgia, drafted with help from a limo company
lobbyist, stalled amid opposition from the ridesharing companies,
customers and the libertarian-leaning Americans For Prosperity.
The
Colorado plan has passed a Senate committee but faces several more
legislative hurdles. It has bipartisan support and several sponsors from
both Republicans and Democrats, including Jahn. The measure would
designate ridesharing firms as "transportation networks," separate from
taxi and limo services. It would require insurance, background checks
and training, which Uber and Lyft already are doing, but the bill would
add utility commission oversight.
At the city level, Chicago and Seattle officials also are discussing plans.
Chicago
Mayor Rahm Emanuel has proposed an ordinance that would license
ridesharing operations and require insurance. Critics say it doesn’t go
far enough, and several taxi companies sued, saying the plan unfairly
singles them out.
In Seattle, the City Council is considering limiting the number of drivers ridesharing companies have on
the roads.
In
California, state regulators decided last year that ridesharing
companies must make sure drivers undergo specific training and criminal
background checks and carry commercial liability insurance.
In
unregulated markets, Uber and Lyft internally require checks on drivers.
For insurance, ridesharing drivers use personal policies when they
don’t have passengers. When they have a fare in the vehicle, they use a
corporate policy.
Insurance has become a flashpoint after a
6-year-old girl was killed in a crosswalk by an Uber driver in San
Francisco on New Year’s Eve. The girl’s family said Uber is financially
responsible since the driver was waiting for customers. Lawyers for Uber
say the company isn’t liable since no passenger was in the car. The
case is pending in state court.
Another point of conflict has been
the pricing system. Uber, which offers services that include
professional drivers, sets rates using a combination of minimum charges,
time and mileage. But prices increase during heavy demand. Lyft also
uses flexible rates, asking users to pay an amount based on time and
mileage.
On a recent afternoon, a 2-mile trip through downtown
Denver, using Uber’s low-cost service, UberX, to get from the Colorado
Capitol to Coors Field, would cost about $5 to $6, based on the
company’s online fare estimator. The same trip in a traditional cab,
such as Yellow Cab or Denver Metro Taxi, would cost about $7 or more,
according to the rates posted on the their websites.
The scrapped
legislation in Georgia sought to require limo drivers working through
Uber to standardize their rates. Lyft doesn’t use professional operators
and didn’t expect its pricing structure would have been affected by the
Georgia bill, spokeswoman Paige Thelen said.
Jennie Morris, a
37-year-old Denver resident, said she uses Lyft about twice a week and
enjoys chatting with drivers. "It’s just like if I would meet someone on
the street and have a nice conversation with them, but instead they’re
giving me a ride," she said.
Gary DiGiorgio, a 59-year-old from
suburban Denver, became an Uber driver to supplement his income during
slow months in his real-estate business. For him, the issue of
regulation comes down to economic concerns. "We, as Americans, need to
go ahead and respect freedom of business," he said.
But for
cabbies, the issue is one of fairness. "We’re not afraid of
competition," said Mohamed Abdi, a 32-year-old Yellow Cab driver in
Denver. But "we all have to play by the same rules."
___
Henry reported from Atlanta.
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