Anti-market legislators target Uber, Lyft

February 5, 2014 8:01 am

by Jason · 37 comments

State Rep. Alan Powell (R-Hartwell) has introduced a measure, HB 907, that could effectively shutdown Uber and Lyft in Georgia, insulating the taxicab and limousine industries from competition, despite an antiquated business model.

The filing of such a measure was all but telegraphed, much like it has been in other areas of the country. Just last week, Thomas Wheatley noted that the taxi and limousine industries in Atlanta has declared war on the app-based transportation services and want to “level the playing field.”

So, rather than asking the legislature to lessen its regulatory burden and compliance costs, the reaction taxi and limousine industries to Uber and Lyft is: “ZOMG! REGULATE THEM NOW!!! Yay, protectionism!” Or something.

Anti-market politicians and regulators in other areas of the country have been gunning for Uber, Lyft, and other app-based car services. In most instances, these busybodies are trying to protect a favored industry. Because, you know, cronyism.

It’s worth noting, by the way, that Powell, the primary sponsor of the measure, received $500 from the Georgia Limousine Association on September 9, 2013, per his year-end campaign disclosure. This appears to be the first contribution made by the special interest group since the 2008 cycle. Not suggesting that $500 buys Powell’s support, just simply pointing it out.

Powell told Creative Loafing that he’s concerned about public safety, citing a recent accident in which one of its drivers hit and killed a six-year-old girl. Uber has denied responsibility because the driver didn’t have a passenger and was not en route to pick up one.

The company, which requires drivers to have personal insurance coverage, carries a $1 million liability policy to cover a shortfall for on-the-job incidents in which its contracted driver is deemed responsible. A Lyft spokeswoman told Creative Loafing that “minimum liability insurance for taxis is $25,000,” which is technically true — though taxi companies in the Atlanta-area hire drivers as independent contractors to avoid potential liability.

The bill, filed yesterday, would add a host of statutes related to “transportation referral service provider[s]” (ie. Uber, Lyft). It would allow the Department of Public Safety to license individual drivers, charging them up to $100 annually, and adds a number of other compliance regulations, including a requirement that they obtain “either a certificate of public necessity and convenience or medallion.”

It would require criminal background checks on all drivers and a zero tolerance policy toward the use of drugs and alcohol. Failure to comply with any of the statutes and regulations would result in a $50,000 per violation fine.

As noted, Powell is the primary sponsor. Reps. Tom Rice (R-Norcoss), Jimmy Pruett (R-Eastman), Ron Stephens (R-Savannah), Tom McCall (R-Elberton), and Mary Margaret Oliver (D-Decatur) have all co-sponsored the anti-competition measure.

For the record, I’m a big fan of Uber, especially the UberX service. I use it often during work-related trips to Washington, DC, mainly because I don’t like the Metro and my experiences with DC-area cabs haven’t been great.

{ 37 comments… read them below or add one }

peachpundit (@peachpundit) February 5, 2014 at 8:01 am

New post: Anti-market legislators target Uber, Lyft http://t.co/XTuG6PWShf #gapol

Jason Pye (@jaseliberty) February 5, 2014 at 8:09 am

Anti-market legislators target Uber, Lyft http://t.co/hci0PjSqes (via @peachpundit)

Will Kremer (@WillKremer) February 5, 2014 at 8:09 am

#HB907: The Anti-Uber bill. This thing needs to be killed in its infancy. #gapol http://t.co/iM1K4ORxoU

Thomas Adams (@GeorgiaCRE) February 5, 2014 at 8:27 am

Anti-market legislators target Uber, Lyft – State Rep. Alan Powell (R-Hartwell) has introduced a measure, HB 907, … http://t.co/yrx7kMQxHb

Charlie Harper (@IcarusPundit) February 5, 2014 at 8:30 am

SAVE UBER: Anti-market legislators target Uber, Lyft — Peach Pundit http://t.co/o5qvPOEofH #gapol #gagop #gadems #tcot #p2

@DwightRobertsJr February 5, 2014 at 8:36 am

“Anti-market legislators target Uber, Lyft” http://t.co/QMhjmMuwTj … #gop #tcot #gapol

@javierabrown February 5, 2014 at 9:38 am

Anti-market legislators target Uber, Lyft — Peach Pundit http://t.co/FFIpikQEAY

Rick Day February 5, 2014 at 9:49 am

Free Market Works! That is why we must kill the Free Market!

*facepalm*

Time to boycott my limo driver.

Stefan February 5, 2014 at 10:25 am

I know Lyft has an umbrella policy, but it isn’t quite the same as a normal liability policy. Though I haven’t actually seen it, from their public statements it appears to be available IF the plaintiff can prove the underlying conditions are met. What about assaults by drivers against passengers? Or assaults by passengers against drivers? Do they carry worker’s compensation coverage?

I’m not sure Uber actually provides insurance in the same way as Lyft. The way they describe the contracting entities (not speaking about UberX, but the black car and SUV service) implies that they are merely acting as a dispatcher for independent contractors. The amount of control they have over the driver/car implies otherwise, but I’d imagine they feel pretty good about their firewall.

bgsmallz February 5, 2014 at 10:46 am

Shorter version…if the law in Georgia allows taxi cab companies to insulate themselves by hiring taxi drivers as IC’s, there is no way Uber or Lyft wouldn’t be able to take advantage of the same law so their ‘umbrella’ policy is really irrelevant except in the PR war…especially when authors are ready to compare insurance protections by juxtaposing a PR release with a personal injury law blog attacking the taxi industry.

By the way, I’m not sure we should be celebrating when the main innovation a company has produced is a way to get around regulation. It’s not anti-market to apply regulations evenhandedly. It is anti-market to create a system of winners and losers through regulation. But whatever…the author hit all the buzz words (Free market, antiquated business model, protectionism, cronyism), so this must be a battle of ‘anti-market’ fiends vs. true free market conservatives!

The unintentional irony of this statement cracks me up…”trying to protect a favored industry.” Right…the industry where there are limited medallions that cost upwards of $65,000 a piece, no loyalty programs are allowed, all drivers have to be licensed and fingerprinted and where there are literally fare caps on what cabs can charge is the ‘favored’ one. #eyeroll Wake me up when we want to have adult conversations about the market place rather than knee-jerk reactions to legislation.

How about this…anti-market legislature refuses to unregulate taxi industry in face of Uber competition? That’s more realistic.

drjay February 5, 2014 at 11:19 am

obviously deregulating the taxi industry makes way more sense–i get the impression that these upstart companies have done more than just figure out how to dodge regulations. they offer an improved product in many ways as well as having the ability to set fares with supply and demand forces in play…to be fair however, i’ve ridden in only 3 taxis in my whole life and have never used uber or lyft…so i’ve only read about this.

bgsmallz February 5, 2014 at 12:43 pm

“having the ability to set fares with supply and demand forces in play”

Not trying to be snarky, but having the ability to set fares with supply and demand is exactly what I’m talking about. Taxi’s in Atlanta and other areas have rate caps, fare zones, etc. It would be illegal for taxis to charge passengers the same fares as Uber. Let that sink in for a second. Let’s see…Uber drivers can use their personal cars…while Taxi’s have to be uniform in a fleet and require signage. Not to mention that a person off the street couldn’t be a ‘taxi’ without buying a medallion, which in Atlanta costs $65,000…so Uber is able to hire tom, dick, and sarah and they can drive without that cost…which makes their margins huge…which allows them to charge little and have a huge fleet for easy and quick convenience. The ‘app’ is the marketing. The product is completely reliant on being able to provide taxi service outside of the taxi regulations…that’s the innovation.

Good on them for finding it…and I’m certainly not defending the taxi industry or the current regulations. It’s fair to say that the industry and the regulations have worked hand-in-hand to stifle real competition and innovation. But to hear legislators, policy wonks, etc. all bemoan an effort to have a fair market because it is ‘anti free market’ makes me shudder at the collective effort to pick a winner that ‘we’ like (yay, UBER!) instead of fixing the underlying problem of bad and unfairly applied regulation and legislation. The folks submitting this bill are actually trying to address the problem…it would be nice to see a conservative answer to the problem rather than loud noises trying to drown out those who would dare point out that a problem exists.

Jason February 5, 2014 at 1:04 pm

Which is why I wrote, “rather than asking the legislature to lessen [cab and limousine industries] regulatory burden and compliance costs.” Obviously, that is preferable to any further legislation. But, in the end, it doesn’t excuse a bad bill that is being pushed by special interests to push out competition.

And while you accuse me and others of having a “knee-jerk reaction” to this legislation, I would submit that a rush to regulate these businesses to protect other industries — and yes, it is a form of economic protectionism — is just as much a knee-jerk reaction.

drjay February 5, 2014 at 2:11 pm

they are not trying to address the problem, they are trying to squeeze the competition at the behest of the industry–my first sentence championed deregulating, that is the conservative solution–and i’m dubious that the taxi people would be that in favor of it…

and actually, as far as supply and demand- i was actually referring to uber’s ability to charge more than the going rate like on new year’s eve, instead of waiting for a cab that may never come at the “set rate” if you were willing to pay the going (increased because of high demand) rate an uber car could be hailed via the app in no time…

Jason February 5, 2014 at 2:16 pm

they are not trying to address the problem, they are trying to squeeze the competition at the behest of the industry

This.

bgsmallz February 6, 2014 at 9:17 am

Let’s look at the converse…if the existing Taxi industry was the one operating in the loopholes of the regulatory scheme and UBER couldn’t enter the market place because regulations applied to Taxi’s would apply to them, I’m pretty sure you both would say that is ‘anti competitive’ and ‘protectionist.’ I certainly would.

So my point is this…the regulatory scheme is broken. Someone is offering a fix. Someone is not. (btw-none of this is an attack on you…I’m more disappointed with the reaction by good legislators and wonks that I like and would trust to propose an alternative who seem all to happy to jump on the ‘attack’ train…I get snarky to a fault and apologies are often in order.)

I’m not passionate about the taxi industry…I really haven’t paid much attention to it prior to this week and granted, a large part of the problem is their own fault for pursuing protectionist policies for so long…what bothers me is how conservatives continue to erode our credibility by attacking those who try to address real problems without providing our own solutions to those problems. It’s easy to let Uber ‘win’ because they are awesome and cheap, but is it right? Would the taxi lobby oppose deregulation because it doesn’t suit their protectionist goals? It sure would be better to call their bluff on it than to just oppose their proposed fix…you’d either end up with deregulation or a trump card the next time they whine about Uber. Anyway, we continue to emphasize the attack rather than the rebuttal (noted that you gave a half a sentence to it…http://media3.giphy.com/media/YC6ZedMDgR1Fm/giphy.gif). This thread is my frustration with that. And with that….back to my cave.

Jason February 6, 2014 at 12:21 pm

Would the taxi lobby oppose deregulation because it doesn’t suit their protectionist goals?

That’s what has been intimated to me.

Anyway, we continue to emphasize the attack rather than the rebuttal…

Don’t get me wrong, I agree that we need to focus on solutions. But I’m just sick to death of this sort of blatant cronyism. And there is simply no way of getting around it, that’s what this is.

Jason February 5, 2014 at 1:07 pm

…by juxtaposing a PR release with a personal injury law blog attacking the taxi industry.

Oh, FFS, it’s the only link I could find related to the $25,000 coverage requirement while trying to put up a quick post. Granted, you whined about other things, but really, that…that’s so offensive to you that you actually mentioned it? Please.

bgsmallz February 5, 2014 at 1:33 pm

Did you miss the first part of that paragraph where I talk about ICs? Did you read the article you linked to?

Let me do some quotes from your linked source that might be a eetsy bit relevant here…

“Last year, in the case of Lopez v. El Palmar Taxi, Inc., 297 Ga. App. 121 (2009), the Court of Appeals ruled once again that a taxi company is not vicariously liable for the negligence of its “independent contractor” driver who operated a taxi with the company’s logo, picking up passengers who called the company, and following the company’s rules, because the driver was deemed to be an independent contractor.”

Cab companies have larger coverage than $25,000…but when drivers are classified as IC’s and not employees, the cab companies escape liability under GA law and the claimant can only go against the IC’s insurance. What are Uber’s and Lyft’s drivers? All Independent Contractors. Would Lyft or Uber be liable for the actions of their ICs in the state of Georgia based upon the article you cited? No. What would be the minimum coverage for a Lyft or Uber driver? $25,000. So juxtaposing $25,000 with $1,000,000 isn’t offensive because of the link…it’s offensive because it’s misleading and arguably inaccurate. I’m sorry that pointing out mistakes and inconsistencies based upon the articles you cite is considered ‘whining’ these days.

Jason February 5, 2014 at 1:51 pm

Admittedly, I didn’t have time to read the full link. Like I said, I was trying to knock out a post before work. That’s a mistake on my part. I wasn’t using the link for back up the overall point, rather the fact that minimum liability is $25,000. I’ll update the post for clarification in regards to independent contractors.

Howie Bruce (@HowieBruce) February 5, 2014 at 11:24 am

Anti-market legislators target Uber, Lyft http://t.co/NW3CTleU87

Jon Lester February 5, 2014 at 11:48 am

Why is the representative from Elberton co-sponsoring this, of all things?

@jyarber February 5, 2014 at 12:17 pm

I’ve always liked Uber & Lyft’s business models, plus the service is great. I’ll be sad if this shuts them down. http://t.co/7wAApcqM9Y

georgiahack February 5, 2014 at 12:51 pm

Because Rep. Powell is and always has been a political opportunist. He is smart and extremely knowledgeable about just about everything you would hope your legislator would be, but his first instinct is to look out for himself.

Noway February 5, 2014 at 2:11 pm

17 Tweets out of 29 comments so far. Why post those? I know this site hasn’t always done that.

Jason February 5, 2014 at 2:51 pm

I deleted the duplicate tweets. Dunno why that was happening. I believe Twitter has been showing up in comments for months now.

Chris Huttman February 5, 2014 at 3:27 pm

I also vote against the tweets showing up in comments – especially when it’s simply a retweet.

NoTeabagging February 8, 2014 at 12:21 pm

I agree. The tweet/retweet posts are unnecessary in the original PP articles.

Chris Huttman February 5, 2014 at 2:57 pm

You really don’t like the DC metro? Granted for intercity quick trips it’s not that convenient and I prefer to either take one of the bikes (weather and attire permitting) or an UberX or if I have cash a taxi is actually usually a bit cheaper.

But the metro is pretty solid there!

Jason February 5, 2014 at 3:04 pm

No, I don’t. It was convenient during the time I lived in Arlington (PentagonCity/Crystal City area), but if I was in the District, I preferred to walk or, if I had to go more than a mile or so, take an Uber. I never tried Capital Bikeshare. I always wanted to.

On the most recent trip, late last month, I used UberX probably a six to eight times, which I found to be cheaper than a cab.

Chris Huttman February 5, 2014 at 3:26 pm

Yeah I think the Metro is more just non-relevant for most inter-district trips and more for commuting. It’s a way better option than taking a cab or Uber to Alexandria or some place like that, unless you are crunched for time.

I took an Uber (UberX wouldn’t come) from King St in Alexandria to my brother’s place near Shirlington (for Atlanta peeps this would be like going from Marietta Square to Big Chicken about) and it was like $15 which is pretty outrageous. UberX from downtown would have been like $18 total.

Jason February 5, 2014 at 3:34 pm

Well, the minimum fare is $15, at least it was the last time I paid for a black car. Not sure if that’s still the case. I went from CapHill, near Union Pub, to DCA for my trip home, I think it cost me around $16, maybe less. Most of my UberX trips from Chinatown to CapHill, where I was staying, were $7 or less.

southernpol February 6, 2014 at 10:36 pm

Lived above Union Pub and commuted to Arlington using the metro. The Metro was great for that.

But when I go now? I use Uber solely.

Blake February 5, 2014 at 3:42 pm

Not that this proposed bill isn’t a bad idea, but Uber is a crappy company that probably ought to be prosecuted and/or sued for anticompetitive business practices.

http://valleywag.gawker.com/ubers-dirty-trick-campaign-against-nyc-competition-cam-1508280668

@ShaunaJ28 February 5, 2014 at 6:37 pm

Uber is the coolest thing ever. Don’t let Ga take it away. http://t.co/UX2ea2uJFg

@LPGeorgia February 6, 2014 at 9:45 am

A couple days ago, we posted about the brewing war between the taxi cartel and the innovators at Uber & Lyft…. http://t.co/TYspbYykWs

ClaimsAdjuster February 22, 2014 at 12:13 pm

UberX and Lyft are dumping uninsured cars on the street. The point about the San Francisco fatality accident that the author failed to mention is that the vehicle was operating with a non-commercial policy. Not only is Uber saying it won’t pay for the accident, the driver’s insurance is also denying coverage.

The taxi regulations require that the cabs carry commercial insurance as a condition of displaying their medallion. A cab’s insurance is on 100% of the time while with these faux taxis, who knows?

http://blogs.kqed.org/newsfix/2014/01/20/ride-sharing-insurance-lyft-uberx-sidecar/