Rideshares face regulation questions in Tacoma

Popularity of app-based ride services prompts fresh look at city’s 2007 taxi code

Staff writerMay 28, 2014 

People have hailed cabs for decades, be it off the street or by calling dispatch. Phones are still involved today, but a new breed of car service — so-called rideshares named Uber, Lyft and Sidecar — aren’t your typical taxis.

Now summoning a ride can involve downloading an app on a smartphone, creating an account with a credit card and pushing a button.

Uber and Lyft started offering regular service in Tacoma last month, while Sidecar occasionally has rides available. Now the city, which last revised its city taxi code about the time smartphones were getting their start, is weighing how to regulate the newcomers.

Morgan Alexander, owner of Tacoma Brewing Co. on St. Helens Avenue, said he’s taken a Lyft ride once and enjoyed the experience. And as a bar owner, he finds it easy and fast to refer customers to Lyft to make sure they get home safely.

“People come in and say ‘Can you call me a cab,’” Alexander said. “I don’t have any phone numbers (for cab companies). I wouldn’t even know where to begin.”

The companies’ customers tend to be younger riders who are more apt to own the iPhones or Android phones necessary to find a ride. The companies’ drivers tend to be people looking to work part-time to supplement other employment.

Robert Ruger of Spanaway, a retired 30-year Boeing worker in computing technology, started driving for Uber earlier this month. So far, he said the work in Tacoma has been brisk.

He got the idea of signing up as a driver from his daughter, who lives in Seattle — where Uber launched three years ago. The 61-year-old likes being able to set his own hours.

“My daughter uses Uber all the time,” he said. “I thought I’d get a part-time job — but it has to be the right part-time job.”

In Tacoma, app-based drivers and companies are required to have $90 business licenses from the city, but so far only Uber’s parent company, Rasier LLC, has one, said Danielle Larson, the city’s tax and licensing division manager.

Larson would not say whether the city is taking enforcement action against Lyft or individual drivers. Operating without a business license carries a $250 fine.

What app-based ride services don’t have to do is comply with expensive city taxicab licensing requirements. That has taxicab drivers and owners upset about what they see as an uneven playing field.

“I don’t think it’s fair,” said Bob Hegnauer, who drives for Fort Lewis Taxi. “If they have to play by the same rules, fine.”

Members of the Tacoma City Council appear to be sympathetic. Several say they are leaning toward revising the taxicab code to bring all ride services under the same rules while lessening the regulatory burden on taxicab owners.

“There are times when demand spikes, so there is a place in this market for more than one type of car,” Mayor Marilyn Strickland said earlier this month. “... We need a really good, on-demand transportation service. I think it’s in the best interest of our city and transportation network.”

MANY DIFFERENCES

For both cabs and the app-based ride services, a rider pays money to a stranger to get from point A to point B.

That’s about where the similarities end.

Cabs have a visible meter that tells passengers how much the ride is costing. Taxis also have paint jobs authorized by the city and operating top lights. Stickers inside tell a rider where to call to complain.

None of that is required of the new app-based ride services. Riders with Uber can estimate the cost of a trip before taking it, but after the trip starts there is no way to tell how much the ride is costing.

Both Uber and Lyft charge a passenger pickup fee and by the mile and per minute — the total of which is currently less expensive than a taxicab fare. Drivers receive 80 percent of these fees.

Lyft also adds a tip at “prime time,” its busiest hours. The tip amount varies depending on demand. Uber can charge a “surge” price, up to three times the normal fare, although Tacoma riders have not seen surge prices yet.

Mike Grimm, who has lived in Tacoma for 22 years, started driving for Lyft in Seattle last year when he wasn’t at his day job in construction. When Lyft expanded its service area to include Tacoma, he jumped at the chance to be closer to home. He now mentors new Lyft drivers.

“We are not as busy as Seattle,” he said of Lyft in Tacoma. “I think there is some potential to be busy here. Seattle is like ‘go, go, go.’ You have to log off to take a break. Sometimes it can be overwhelming.”

Riders can see cars only when drivers turn on the app, and finding a ride can be hit-or-miss in Tacoma during the day. During a recent week, drivers for both Lyft and Uber were easier to find during the evenings, especially on weekends.

The app-based ride services’ presence in Tacoma can be attributed, at least partly, to stiffer regulation elsewhere.

Last month, the Seattle City Council voted to cap the number of Uber, Lyft and Sidecar drivers on the road at one time to 150 per company. But app-based companies collected enough voter signatures to place an item on a future ballot, putting the city regulations on hold.

Shortly after the Seattle council’s vote, the app-based ride services expanded their territories to include all of Pierce County, and areas north of Seattle.

Uber drivers had been dropping off passengers in Tacoma anyway, so it made sense to expand the territory and allow drivers to pick up passengers, too, said Brooke Steger, the general manager for Uber in Washington.

REVISITING THE RULES

The arrival of Uber and Lyft is prompting a fresh look at Tacoma’s taxi code, which was last revised in 2007 in the wake of violent attacks against taxicab drivers. In 2006 alone, one man was beaten so badly he was blinded for life, another was stabbed and a third died.

The new rules required silent alarms in cabs, cameras and for dispatch to keep in contact with drivers. Sergio Anastasio, the general manager of Fort Lewis Taxi, said the changes were expensive, into the hundreds of dollars per cab — and they are expenses the rideshare companies don’t pay.

“I think the city law needs to change enough to give us a fighting chance as well,” he said of the taxi industry.

Councilman Marty Campbell said earlier this month the city should work to accommodate all on-demand ride services, whether it’s taxis, Sidecar, Uber, Lyft or car-sharing businesses like Zipcar.

“I think our goal is to have a system that, No. 1, is safe for the citizens of Tacoma and safe for the drivers,” he said. “... I think there’s room to add background checks to Uber-type services but also remove some of the onerous regulations that we’ve put on our taxicabs.”

One example of a rule that could be relaxed: Potential taxi drivers take a class, which includes the history and geography of Puget Sound, defensive driving and rules for driver uniforms. Instead of a full-day, in-person class, drivers might be able to take classes online, Campbell said.

City officials also would have to decide what to do about driver background checks, which have been a lightning rod for criticism of Uber and Lyft.

App-based ride services hire private vendors to run drivers’ names through commercial databases of criminal records. Those checks are broader but not always as accurate as the ones the city does of taxi drivers using a statewide database maintained by law enforcement.

Another area where Uber and Lift differ from traditional taxis is insurance. Cabs are required to carry insurance that pays for injuries and property damage of $300,000 per accident, and a minimum of $100,000 per person for uninsured or underinsured motorist coverage.

Uber and Lyft carry different types of insurance, some of which could be lower or higher than the city of Tacoma’s requirements. Both have $1 million in uninsured or underinsured driver coverage. Varying amounts of coverage kick in depending on whether the driver’s app is running, passengers are in the car and the driver is at fault.

All drivers for app-based services also must carry personal insurance. However, that coverage doesn’t apply to every situation. Several state insurance regulators, including for Ohio and Idaho, have warned consumers about potential “insurance gaps” because it is unclear who pays for injuries or damages when a crash occurs.

Lyft and Uber representatives said Tacoma’s rules don’t make sense for drivers using personal vehicles, though they did not specify what level of regulation would be acceptable.

Steger said her company seeks “rules that make sense” with a focus on safety.

“The requirement for taxi markings on the exterior of the vehicle is counterproductive,” Steger said. “They (drivers) are using their personal vehicles.”

Hegnauer, the driver for Fort Lewis Taxi, said he worries that if taxicab drivers are run out of business, older customers would be cut off from the cabs they rely on to get them to doctors and grocery stores.

Such riders don’t have smartphones and would never be able to request rides from Lyft or Uber, said Ahmed Roble, a co-owner of United Taxi.

“The taxi company will go the extra mile to help people,” he said. “We had a lady who pays in check. She’s 70 years old. She’s never had a debit card. ... She goes to church in a cab.”

Kate Martin: 253-597-8542
kate.martin@thenewstribune.com
@KateReports

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