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VOL. 129 | NO. 133 | Thursday, July 10, 2014

City to Issue Cease-and-Desist Notices to Rideshare Services

By Amos Maki

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The city of Memphis will ask popular ridesharing services such as Uber and Lyft to cease and desist operations until they acquire city permits.

“We know (Uber and Lyft) are doing business in Memphis without the required permit,” said Memphis spokeswoman Dewanna Smith. “We will send them a cease-and-desist notice along with an application and links to our ordinances. That letter has only recently been approved by counsel and will be going out soon.”

“We already require all businesses operating within the city to be licensed,” said Smith. ”The cease and desist would apply to all unlicensed operations city-wide.”

Governments and other agencies across the country, including airports, have been wrestling with ways to regulate ridesharing services such as Lyft and Uber, which often provide services similar to taxis or other pay-to-ride businesses without obtaining the permits other ride-for-hire companies need to operate.

In June, the California Public Utilities Commission warned Uber, Lyft and other services that they could no longer be allowed to take riders to or from any airport in the state. In March, San Antonio police chief William McManus issued a cease-and-desist order to Lyft.

On Tuesday, July 9, Memphis-Shelby County Airport Authority general counsel Brian Kuhn participated in a two-hour national conference call with around 183 participants from airports across the country. The conference was hosted by Airport Council International North America.

In this March file photo Dara Jenkins, left, a driver for the ride-sharing service Lyft, chats with customer Katie Baranyuk, right, as Jenkins drives Baranyuk from her place of employment to meet friends in downtown Seattle. In Memphis, city officials want ridesharing companies like Lyft and Uber to obtain city permits and will send cease-and-desist orders to the two companies.

(AP Photo/Ted S. Warren)

“It’s a hot topic,” said Kuhn. “They’re all dealing with it, and it’s come up very suddenly.”

“I’m devoting a lot of time to this problem,” Kuhn said, “to try and get it resolved as soon as possible because we know we have plenty of people who probably want to use this service.”

Kuhn said new technology and services based on that technology can emerge and spread quickly, often leaving governments and regulators scrambling to play catch up.

“It’s real hard for the law and regulations to catch up with things like this,” he said.

Kuhn said a large majority of Tuesday’s conference call members were in favor of allowing the services to operate as long as the drivers and vehicles are safe.

“No one felt that this was something that was going away,” he said. “It’s a new form of transportation that’s especially appealing to the younger generation who are used to dealing with technology and apps.”

“They wanted to be able to address this issue where these companies can be allowed, but they wanted to address permitting issues with the vehicles and drivers to ensure public safety,” said Kuhn. “(Passengers) are assuming if they are picked up here we’re saying they’re OK.”

While tech-savvy adults have grown accustomed to booking rides on apps to get to where they need to go, airports still often rely on regulations that govern how taxis and other rides for hire pick up passengers.

Currently, Memphis International Airport policy requires a company that comes to the airport’s commercial drive to pick up passengers and drive them somewhere for a fee to have a permit from the city and a contract with the airport.

The contracts Memphis International requires for services have direct costs, such as fees for using the airport’s commercial drive, and indirect costs to the company depending on what requirements the airport has in the contract for items like insurance.

Rides for hire also have distinct lanes they operate in that are separate from public lanes, Kuhn said.

“You don’t want commercial vehicles and regular vehicles together,” said Kuhn. ”That’s generally not a good idea.”

Kuhn said that many cities are focusing on requiring individual cars and drivers in ridesharing businesses to obtain permits since the companies have generally been nonresponsive.

“I suppose that’s the direction we’ll go here because that’s what nearly every airport is doing,” said Kuhn.

“It’s my understanding that Uber and Lyft are generally not reaching out to get a contract,” said Kuhn. “The city of Memphis is going to have to get these vehicles permitted, and once that is done we’ll do the best we can to tell them they have to have a contract with the Airport Authority.”

Lyft public policy communications manager Chelsea Wilson said the company would talk with Memphis officials about possibly updating their regulations.

“Ridesharing has become part of daily life for many Memphis residents and the community has made it clear they enjoy having Lyft as an option for getting around town,” Wilson said in a statement. “We look forward to continuing our conversation with local leaders about our rigorous safety standards and community-powered movement. Cities and states around the nation have worked to update their regulations to allow Lyft's peer-to-peer model to thrive and we hope Memphis leaders will do the same.”

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