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Taxi companies want limits on Lyft, UberX pricing

Posted by: Eric Roper Updated: July 2, 2014 - 7:46 AM

Representatives of the city's largest taxi companies say an updated city proposal to regulate Lyft and UberX still does not sufficiently control what those companies charge riders.

Unlike taxis, which are limited to charging the meter rate, Lyft and UberX increase rates based on demand. At 2:30 a.m. on a recent Saturday morning, for example, UberX was charging a $20 minimum and three times their normal rate under "surge pricing."

The ordinance requires that the companies inform riders about rates before the ride, however, and receive their consent.

Noah Rouen, a spokesman for a coalition of taxi companies, said the public expects the city to ensure transportation pricing is "fair and affordable." The coalition includes a nubmer of the biggest players, such as Blue and White Taxi, Rainbow Taxi and Airport Taxi.

The ordinance, Rouen observed, does not give the city the means to review, approve or otherwise regulate the Lyft and UberX fares.

He also expects that drivers will chase the highest fares when informed of areas where surge pricing is in effect.

"These practices, and the complete absence of the City's knowledge about or oversight on TNC fares, raise serious concerns that the TNC model is quite simply one where technology is used to sell rides to the highest bidders, and to de facto refuse rides to lower-fare passengers," Rouen wrote in an e-mail.

The industry's criticisms come as city regulators are simultaneously mulling relaxed regulations on taxicabs.

“We’ve made some serious concessions on the side of the cab industry to really allow equity here," said council member Jacob Frey, who is spearheading the Lyft and UberX regulations. "I’ll tell you one thing that’s clear: I am for equity, but I am not for preventing an innovative business from coming into Minneapolis."

Frey said that Lyft and UberX (referred to as "transportation network companies" or TNCs) use a different business model from taxicabs, since drivers and riders receive much more information about each other prior to the ride. Taxis are allowed to take street hails, while Lyft and UberX may only accept rides prearranged through a smartphone app.

"One is public facing, one is private facing," Frey said. "Taxicabs are public facing vehicles. When you get in them, the driver doesn’t know the rider. The rider doesn’t know the driver. You have no idea what route they’re going to take, what kind of service they’re going to provide. You don’t know anything. And that necessitates some regulation to ensure that people don’t get gouged."

He added: "However on the TNC side of things, you sign up ahead of time, you provide your information ahead of time, you know who your driver is ahead of time, the driver knows who the rider is ahead of time. You also know the price tag.”

The package of taxicab and TNC ordinances are expected to be debated by the City Council's regulatory committee next week.

Below is a comparison of two versions of the Lyft and UberX ordinances, one from April and the other more recent:

 

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