House Bill 224 and to a lesser extent House Bill 190 are the result of the recommendations made by the House Study Committee on For-Hire Transportation Services, which met last fall to consider how to regulate the various types of transportation services and providers. The committee was chaired by Rep. Alan Powell of Hartwell and included Rep. John Carson of Marietta, Emory Dunahoo of Gainesville, Lynne Riley of Johns Creek and Dale Rutledge of McDonough. All are Republicans. In addition to traditional taxicabs and limousines, the committee looked at new ride share services exemplified by Uber and Lyft, which had begun operating in the Peach State.
The ride sharing services have become very popular with millennials, who like to be able to use an app on their phones to arrange for a car to pick them up and take them to their destination. They don’t have to worry about hailing a cab or pre-arranging for transportation, and they don’t have to worry about how much the ride will cost, since all that’s handled when they place their order via the app.
The report of the study committee shows members focused on several concerns, including passenger safety, insurance coverage, sales tax liability, and market deregulation. Despite the proclamations by some that HB 190 and 224 are attempts to shut down the ride sharing services–an issue I’ll go into more detail on in a bit–the two bills deal with these issues.
Passenger safety covers two areas: is the vehicle safe, and can the driver pass a background check conducted by the Georgia or National Crime Information Centers. While no new laws are proposed regarding vehicle safety, HB 224 requires taxi and ride share drivers to obtain the same chauffeur’s endorsement, renamed to a for-hire endorsement, presently required of limousine drivers. House Bill 190 specifies the insurance that must be in force for a ride share driver, essentially a $1 million liability policy while transporting a passenger, and $300,000 when the driver is willing to accept a rider.
The study committee was concerned that ride share services may not be charging the legally required sales tax on each fare, or remitting the tax to the Department of Revenue. Georgia is one of very few states that charges sales tax on fares. In recognition of that fact, HB 224 eliminates the sales tax, and instead requires taxis, limos, and vehicles used in ride share services have a $300 decal issued annually by the state prior to carrying passengers for hire. That’s roughly equivalent to paying sales tax on $4000 in fares.
HB 224 also takes some steps towards deregulating the for-hire transportation industry. Recognizing that the city of Atlanta uses a taxi medallion system, the bill allows it to remain, but restricts medallion issuance to taxicabs, and prohibits any additional counties or cities from requiring medallions in order to operate. The bill further deregulates taxi fares by specifying that a rate set by a local government is a maximum fare, with the taxi company free to discount from there as it sees fit.
Add some legislative language and a few other definitions and provisions, and that’s the bill. Which begs the question of why some are proclaiming that “Georgia seeks to ban Uber and Lyft,” or that “Georgia legislators want to run Uber and Lyft off the road” or that “House Bill 224 would force Uber drivers to obtain taxi medallions.”
Perhaps the confusion arises from the way the different types of transportation services and providers are defined. Section 3 of HB 224 defines “limousine carrier,” “ride share network service,” “taxi service,” “transportation referral service,” and “transportation referral service provider” differently. While the eponymous Uber black car service would qualify as a limousine service, Uber-X is a ride share network service. Taxi services use taximeters to calculate fares.
A transportation referral service books rides for taxis or limousines, but does not own any limos or taxis itself. Think of a hotel concierge that books taxis or limos for guests, or perhaps a travel agent. And a transportation referral service provider is like a transportation referral service, except that it does own taxis or limousines. This could be a limo service that, when all of its vehicles are booked, arranges a trip through a different limo service for a client.
According to Powell, Uber-X and Lyft are neither transportation referral services nor transportation referral service providers.
The AJC’s Political Insider reported that these lines from HB 224 will force changes in the way Uber operates:
Each transportation referral service provider doing business, operating, or providing transportation services in this state shall:
–Either obtain directly or determine that each taxi service to which it refers business possesses either a certificate of public necessity and convenience or medallion authorizing the provision of taxicab services in such local government if the certificate of public necessity and convenience or medallion is required by an ordinance of the local government where such taxi service is to be provided;
– Either obtain directly or determine that each taxi service to which it refers business is registered with the department and possesses and maintains a permit authorizing the provision of taxicab services in such local government if a company permit is required by an ordinance of the local government where such taxi service is to be provided;
– Either obtain directly or determine that each limousine carrier to which it refers business is properly and currently registered and licensed pursuant to Part 3 of this article….
That part of the law refers to transportation referral service providers, not ride sharing services. And in any case, it defines a provider’s relationship with taxi and limo services, not ride sharing services. I’m guessing that the other stories I cited made the same assumption that ride sharing services were transportation referral services.
Uber has been very successful in portraying itself as a scrappy little company who is trying survive in the transportation for hire business, despite being attacked by the entrenched taxi and limousine cartels that can’t keep up with their 21st century business model. A December story in the Washington Post puts it this way:
Uber’s approach is brash and, so far, highly effective: It launches in local markets regardless of existing laws or regulations. It aims to build a large customer base as quickly as possible. When challenged, Uber rallies its users to pressure government officials, while unleashing its well-connected lobbyists to influence lawmakers.
The company — which says its goal is to work with officials to change old laws that its executives argue don’t apply to a phone-app-based service — has carried out this approach repeatedly in cities and states across the country over the past year. It has upended long-entrenched taxi regulations while building itself into a technology giant valued at more than $40 billion.
The entire Post story is worth reading, going into details about Uber’s lobbying efforts in state capitols and city halls. And yes, Uber has lobbyists walking around the Gold Dome. The company has hired none other than former Obama campaign manager David Plouffe to market Uber much the same way–and using many of the same techniques–that he previously used to market hope and change.
The playbook is familiar to anyone who paid attention to Obama for America. Start by turning your campaign into a cause. Find a theme—for Obama it was Change We Can Believe In and a dash of Hope. For Uber it’s, well, Change We Can Believe In with a dash of Choice. Then build an inspiring narrative around said theme. Speak to your core audience wherever they might be, whenever possible via the beautiful efficient directness of email. Nudge them toward being fired-up advocates, partly by equipping them with the hand-selected facts. Fight only the battles that count. Mine your data for all it’s worth. Piece together a plan and stick to it, ignoring the noise.
On the other side of this juggernaut is Alan Powell, chairman of the House Public Safety and Homeland Security Committee, trying to figure out how, if at all, to regulate the new player in the for-hire transportation business. The taxi industry wants the same regulations for ride sharing services as there are for cabs, despite the fact that virtually all of those regulations come from local government, not the state. Uber and Lyft claim that they are different types of companies who don’t have to play by the same rules, although recent evidence shows that they are willing to come to the table with local governments more than they had previously.
The free market is a wonderful concept. But, too little regulation can lead to major problems, as we’ve seen recently with the online classifieds site Craigslist. House Bill 224 has yet to have a hearing before the Regulated Industries Committee. That committee is scheduled to meet today at 3 PM, although Powell’s bill isn’t on the agenda. Based on the differing interpretations of what the bill actually does, perhaps the language needs to be clarified. It’s possible there are less restrictive ways to protect drivers and passengers.
But don’t assume that Alan Powell is out to destroy Uber and Lyft. He’s worried that he’s going to pick up the newspaper one day soon, and see a tragic story about a ride share service passenger who ran into an unfortunate situation because of a criminal driver or an improperly insured vehicle.