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Working group starts process of how to regulate rideshare companies

Wednesday, June 18, 2014 by Jenny Blair

The mood swayed between optimism and frustration last Wednesday evening at the preliminary meeting of the Transportation Network Companies Working Group, where about 30 people from various transportation constituencies met to discuss ground rules for a conversation about how to regulate rideshare companies like Lyft and Uber.


“What we do know is there are people in Austin who want transportation that aren’t currently getting it,” said the Austin Transportation Department’s Gordon Derr. However, he added, the city wants rideshare companies to be safe and accessible and to cover all neighborhoods.


Once the department chooses the working group’s members, its roughly 20 stakeholders will meet every few weeks to compare other cities’ approach to the controversial companies and hash out what Austin could do. It will make recommendations for a pilot program to staff. The Austin City Council called for the group’s creation in a May 15 resolution.


The working group will include taxi drivers, rideshare-company drivers, insurance and loan experts, public-safety representatives and vehicle-for-hire representatives, among others. Audience members suggested adding representatives from the nightlife economy and the hospitality industry, among other groups.


Topics like airport access, insurance, inspections and driver requirements are on the working group’s menu. Audience members requested that it also examine additional topics like discriminatory practices, drinking and driving, fleet size and pending lawsuits against rideshare companies.


Cab driver Al Shire said he is one of the few cab drivers who views Uber and Lyft as a positive thing, in part, because they readily serve people who need short rides. He and several other speakers called on Lyft and Uber to provide commercial insurance.


Lyft and Uber both provide auto insurance intended to supplement a driver’s personal policy in case coverage is denied, which is likely because personal policies typically contain a livery exclusion. They may soon face tougher regulations in California, though: Last week, the California Public Utilities Commission proposed that rideshare companies be required to provide drivers with $1 million in primary commercial insurance coverage.


Urban Transportation Commission vice chair Boone Blocker told the audience that Uber and Lyft need action plans to serve people with disabilities.


“It’s accessible and equitable to people that have credit cards and smartphones and can jump in a cab, which I would like to do,” said Blocker, who uses a wheelchair. “But the service needs to be available to all.”


Earlier, Uber consultant Adam Goldman had asked the group to review how the city has handled accessibility issues in the past, pointing out that car share company Car2Go requires a credit card and is not accessible to all.


Lauren Albright, community manager of carpool company Carma, said her company worked with regulators for three years before launching last August.


“We’ve been very involved in the definition of ridesharing, which is federally defined as matching two people going the same way to share a ride where the driver is not making a profit as defined by the IRS,” Albright said. “We want to ensure that it’s an equal playing field for all of the companies operating here.”


Yellow Cab president Ed Kargbo reminded the group that ridesharing is 100 percent legal in Austin.


“This conversation is about the responsibility that comes along with using any mode to connect the passenger who wants to pay for travel with the driver who’s willing to accept compensation,” Kargbo said.


Lyft representative April Mims told the audience that Austin’s current regulations did not anticipate peer-to-peer ride services like those the rideshare companies offer.


“We’re in a new world right now. Lyft is a different animal,” Mims said, adding she was glad they could be part of the conversation. “This isn’t a zero-sum game….There’s room for all of us to thrive.”


Zenaw Mersha, a driver and manager with Lone Star Cab, sounded a note of frustration. Cab drivers, too, have apps and 24-hour availability, he said, but they need a level playing field and more permits from the city.


If rideshare companies go through the same process cabs do, Mersha said, “I don’t mind. I love competition. If I’m the best, I’m going to win. If I’m not the best, I’m going to fail. Period. That’s how it (has) to be on the free market.”


Otherwise, Mersha said, “we cannot play this game. This is totally unfair.”


Both Lyft and Uber launched illegally in early June in defiance of the Austin City Council’s plan for a regulatory pilot program, for which last week’s meeting lays the foundations. The city cracked down, swiftly ticketing several Lyft drivers and impounding their pink-mustachioed cars.


Uber was valued last Friday at $18 billion by some Wall Street investors, prompting a flurry of discussion among financial experts about whether it could be worth that much and raising concerns over a new tech bubble in the economy.


The Transportation Department is scheduled to submit a preliminary report about rideshare companies to the City Council within 90 days and a final report within 180 days of May 15.

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