An effort to bring upstart transportation companies under the same regulatory garage as established taxi and limo firms has pit free market ideals against concerns of safety and fairness.
But to users of popular car service companies Uber and Lyft, House Bill 907 is more fundamentally flawed: It hurts something they find cool and useful.
Public Safety Committee Chairman Alan Powell, the sponsor of HB 907, said passengers should feel assured their driver does not have a criminal record and is a safe driver.
The Hartwell Republican’s bill would require people who drive for smartphone-based car services such as Uber and Lyft to undergo a criminal background check and fingerprinting, carry liability insurance and pay sales and use taxes. Those requirements are already required of drivers for taxi and limousine services, two established industries that see the new car services as out to topple their business model.
Uber and Lyft operate almost exclusively through smartphone apps. With a swipe and a poke, riders can order up a car to their location. It’s easy, and many users find them to be as affordable as traditional taxis, if not more so. But in Atlanta they also don’t have to purchase city permits that can cost tens of thousands of dollars and are limited by city code.
Uber and Lyft have proved to be wildly popular, especially with younger people in Atlanta and the near suburbs.
“There has never been such an innovative real world app for my smartphone like Lyft,” Curt Osmundsen of Atlanta said. “It is a game changer for travel in the city.”
Osmundsen, 35, has written Powell to express concern that the bill would stifle innovation to protect legacy industries that provide an inferior product.
Or, as Rep. Earl Ehrhart, R-Powder Springs, put it: It's the candle maker vs. the light bulb maker. In this story taxi and limo firms are the candle maker, and Uber and Lyft want to sell light bulbs to better illuminate the world.
Those legacy firms, however, say they spend great gobs of money on licensing, regulation and insurance and that Powell’s bill simply levels the playing field.
The bill passed out of committee late Thursday and could reach the House floor within days.
Powell said he’s being accused of trying to run Uber and Lyft out of business.
“That is not correct,” he said.
The legislator said he took his first Uber ride last year and was bragging about it to the state public safety commissioner.
“He said, ‘you know those drivers are illegal,’ ” Powell said. “Anyone who is a for-pay driver of public conveyance is supposed to be looked at by Public Safety.”
Thus came the creation of HB 907, he said.
“My intent is anyone billing themselves as a for-hire driver needs to have a background check to make sure they’re not a criminal, not a felon and have a halfway decent driving record,” Powell said. “I don’t think you want your wife, your girlfriend, your daughter to be picked up by a registered sex offender. You don’t want a multiple DUI offender either.”
While services such as Uber and Lyft require background checks, they do not take fingerprints of drivers.
State law already requires fingerprinting of every taxi driver, and local governments typically require further background checks. Limo drivers, meanwhile, must submit to fingerprinting and a background check by the state. As a new concept, Uber and Lyft have avoided such regulation, so far, although both companies say they conduct their own checks.
Uber and Lyft compete against 1,600 taxis in Atlanta, each of which must have a city-issued Certificate of Public Necessity and Convenience, commonly known as a medallion.
Cedric Burse, the manager of Atlanta Police Department’s Taxicab and Vehicles for Hire Section, said that in 1995, the city issued 1,600 medallions for $100 each. They have since increased in value to $54,000 apiece because no more can be issued.
Keith Radford, the general manager of Uber Atlanta, said Thursday that he could not provide specific numbers but said Uber has given tens of thousands of rides in Atlanta since launching here in August 2012.
Uber offers users the choice of a black Town Car or a black SUV. UberX is a less expensive option involving smaller sedans. Many of Uber’s Town Car and SUV drivers are already licensed limo drivers, while UberX drivers fill out a form online to apply and complete the background check. UberX and Lyft drivers typically drive their personal vehicles. All are independent contractors.
Joseph Okpaku, the manager of government relations at Lyft, said the majority of its applicants do not qualify to drive for the service.
Uber’s Radford told lawmakers that the company doesn’t “employ any drivers” and it doesn’t “own any cars.”
“We’re simply the conduit that someone can use to get a ride,” he said.
The company is beefing up its background checks, he said, to include multistate and federal searches. Each Uber car has insurance as required by the state, and Uber has a $1 million policy on every ride completed. It also inspects each vehicle.
“Safety is paramount,” Radford said. “We spend a lot of time, resources and money to make sure these background checks are sufficient, and we provide for the safety of our riders.”
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