News: CJ Exclusives

General Assembly May Regulate Uber and Lyft

Ride-sharing services say taxi rules aren't relevant to tech-based alternatives

See editor’s note at end of story.

RALEIGH — A state legislative oversight committee soon will look into whether state regulations need to be updated as passengers increasingly arrange rides using a smart-phone application rather than a phone call to a taxi company. Uber and Lyft are two companies that are meshing technology and transportation to offer ride-sharing services.

There presence in a number of North Carolina cities — Uber, for example, operates in Charlotte, Raleigh, Chapel Hill, Durham, Winston-Salem, Greensboro, Wilmington, and Fayetteville — has prompted a response from municipal regulators along with taxi companies that compete for the same riders.

Charlotte shelved efforts to regulate ride-sharing services after learning that the N.C. General Assembly plans to consider rules that would apply statewide to the new companies.

“I think they’re looking for some kind of guidance,” said Sen. Bob Rucho, R-Mecklenburg, co-chairman of the legislative Revenue Laws Committee. That committee is likely to take up the issue before the General Assembly returns in January.

“There should be some consistency with the rules if it’s dealing with the safety of the public,” Rucho said. That could mean bringing ride-sharing and tech-based businesses in under current rules, or it could mean getting rid of some of the taxi regulations, he said.

Taylor Bennett, a spokesman for Uber, said the company doesn’t oppose regulation but thinks some of the longstanding regulations governing taxis should not apply to ride-sharing businesses.

“Forcing decades-old ordinances onto modern technology is like fitting a square peg into a round hole,” Bennett said. He said the legislature is right to explore rules for ride-sharing technology rather than merely forcing old regulations onto the new service.

Bennett said Uber’s entry into new markets provides business opportunities for entrepreneurs and drivers, and new options for passengers.

Patrick Ballantine, a former state senator who was the GOP nominee for governor in 2004, is a registered lobbyist for Taxi Taxi, a taxicab firm operating in Raleigh. He said the company is not pushing for unreasonable regulations on Uber and Lyft. He said safety is a legitimate concern of the state.

“These people aren’t delivering pizzas, they’re delivering grandma,” Ballantine said. “It does seem incongruous to have hundreds of pages of regulations on taxis and zero on digital-dispatch companies that provide the same service.”

Ballantine, who said Taxi Taxi recently purchased 100 Toyota Priuses totaling $3 million in the Raleigh area, has suggested that ride-sharing services be required to display a “For Hire” license plate on cars that pick up passengers. Those plates vary in cost, based on body style and the county where they are registered. The lowest cost is $78.

Bennett notes that Uber’s drivers are independent contractors rather than employees and the cars they use to transport passengers are personal vehicles. “Some [drivers] are working two hours a week in between trips to the grocery store,” Bennett said. “Some are working full time.”

He said every driver who “partners” with Uber undergoes rigorous background checks. “Those background checks are local, multistate, as well as federal.” He said the checks go back seven years.

Cars must be mid- to full-size, have four doors, and be a 2005 or later model. All drivers are required to carry personal liability insurance. In addition, Uber offers a $1.5 million commercial liability policy, which covers driving partners while they’re logged into the Uber app on their way to pick up fares and while they are transporting passengers, Bennett said.

Uber also has contingency coverage for drivers who are logged in awaiting passengers they have not picked up, Bennett said.

Passengers can sign up for Uber by downloading the app, filling out a profile and leaving a credit card number. When a passenger has requested a ride, and a driver has agreed to provide it, the passenger is given information about the driver and the car, including the name of the driver and a photograph.

“It’s all GPS-tracked,” Bennett said. Passengers can follow the car on a map until it reaches the pickup point. The payment is made electronically and is recorded only after the ride is completed. No cash changes hands, and Bennett said no tipping is allowed.

Bennett said drivers operate as independent, small business owners. Drivers receive 80 percent of every fare, with Uber getting the remaining 20 percent.

Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.

Editor’s note: Due to a reporting error, this story was corrected after initial publication to reflect the correct division of fares between Uber and its contractors.