No special treatment for UberX and Lyft

  • Article by: WALEED SONBOL, IID YOUSEF ALI and LOUIS PICAR
  • Updated: June 2, 2014 - 6:49 PM

Minneapolis should take great care with its analysis of these taxi competitors.

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A Lyft driver in San Francisco waited in her car adorned with the company’s signature mustache, while a taxi passed by. Lyft and another ride-sharing service, UberX, are at issue in Minneapolis.

Photo: Jeff Chiu • Associated Press,

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Imagine multimillion-dollar corporations coming to town, knowingly breaking laws and withholding information as “proprietary” when asked how they will protect the public, and then having City Council members help them continue? This is not the Minneapolis we know, and we’re disappointed with Council Member Jacob Frey and his proposed special rules for UberX and Lyft.

Our city’s ordinances protect public safety. But Frey’s proposal leaves drivers, passengers and uninvolved third parties at risk due to a lack of adequate insurance coverage, according to the state’s Commerce Department.

Frey contends that taxis are different because they can wait at cab stands and be hailed. Since when is it a privilege to wait for hours in a cab line or drive around hoping for a passenger? There are certainly ways to modify city ordinance to accommodate such “privileges” for any driver wishing to do these things. The notion that UberX and Lyft are different is incorrect: Drivers are paid to transport passengers in vehicles; drivers are dispatched through electronic systems, and “apps” are widely available for arranging taxi service.

Frey has pointed to a Seattle study to argue that this “new,” freeloading corporate model is “good for taxi drivers and companies.” His flawed analysis is based on a bar graph created by — you guessed it, the same companies! Their bar graph suggests that because there is an uptick in total revenue for the Seattle taxi industry in the same year that UberX and Lyft started illegal operations there, it must be good.

Frey’s analysis fails: Seattle experienced 8 percent population growth during the period of the study (Minneapolis, less than 3 percent in the same time) and has 300,000 more residents than Minneapolis. And Seattle maintained a capped 688 licensed cabs, whereas the number of Minneapolis taxis tripled. Despite these more favorable market conditions compared with Minneapolis, Seattle’s average number of miles and trips for taxis decreased in 2012-13. There were positive impacts on taxi revenues during the study, none of them due to UberX and/or Lyft. This included three separate taxi rate increases (there were none in Minneapolis) and a change allowing Seattle licensed drivers to begin picking up at the airport (a major revenue benefit for Seattle drivers). And the “factual” bar chart is not inflation-adjusted. The study explicitly says: “It is highly likely that [ride sharing] will occur at the expense of the traditional taxi market, placing a downward pressure on the number of trips per day” made by taxis.

Before buying and drinking down the out-of-towners’ snake oil with their claims of a wonderful future, the city must carefully think of consequences. We propose a task force of stakeholders to be formed to explore one new ordinance that keeps in mind public safety and healthy competition.

Not surprisingly, UberX and Lyft want to come to town and have no rate regulation; they don’t want to reveal driver logs; they don’t want to purchase wheelchair-accessible vehicles, and they want no third-party inspections nor background checks nor third-party driver training — nothing that “creates a barrier to market entry.”

The truth is that they came to town to make money, period. And the “market barriers” listed above are all included in the city’s current taxi ordinance. Why? To protect safety and interests.

They are talking about an attack on innovation. We are more concerned with their attack on accountability.

Frey suggests it is impossible to have one ordinance. It is not only possible, it is imperative. Small and medium-sized cab companies and large corporations can fit into a fee schedule based on size. Drivers operating on a limited basis could be licensed based on driving logs — something UberX and Lyft don’t want to share, while taxi drivers must.

Special treatment hurts competition: Limo and Uber drivers can pay bellmen to access higher-paying airport rides, leaving long waits and low fares for taxi drivers, who are prohibited from doing the same.

Our City Council must stand for fundamental fairness. To have “One Minneapolis” — a pledge from Mayor Betsy Hodges — we need one set of rules that applies to all drivers who, for pay, take a passenger from point A to point B.

 

Waleed Sonbol is general manager of Blue & White Taxi. Iid Yousef Ali is vice president of the Minneapolis Cab Drivers and Owners Association. Louis Picar is the owner of A New Star Taxi.

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