VOL. 129 | NO. 138 | Thursday, July 17, 2014
Uber, Lyft Operating Despite Cease-and-Desist Notices
By Amos Maki
Uber and Lyft continued to shuttle customers back and forth early this week, undaunted by the city’s decision last week to send the companies cease-and-desist letters.
A representative from Uber said the company had not received any notice from the city by Tuesday, July 15, and indicated the company has no intention of putting the brakes on the app-based service.
Uber and Lyft continue to operate in Memphis despite the city's decision last week to send cease-and-desist letters to the app-based ridesharing services.
“While we’re not aware of any actions taken by the city of Memphis, any attempt to restrict consumer choice and limit economic opportunity does nothing but hurt the thousands of residents and visitors who already rely on Uber for safe, affordable and reliable transportation,” said Uber spokesman Taylor Bennett. “We look forward to continuing to provide the people of Memphis with the Uber they know and love, as we continue to work with city officials to create a permanent home for ridesharing.”
Responses like that didn’t sit too well with Aubrey Howard, head of the city’s permits office.
“You know, I’ve never liked people who just thumb their nose at you,” Howard said.
Howard emphasized that the city is not trying to crack down on what many view as a valuable way to commute or earn a living, but is instead looking out for the safety and well-being of people who use the ridesharing services.
“No one wants to stop enterprise, but these laws on our books and on the books of every state in the nation regarding vehicles for hire are there because this industry has a lot of potential for danger to the public,” Howard said. “No one is trying to stop them from doing business; we’re simply saying if you want to operate, you need to operate under the rules we have.”
Howard indicated the city could soon send out a Memphis Police Department team to issue citations to Uber and Lyft drivers.
Lyft and Uber are app-based ridesharing services people access with their smartphones. When someone wants a ride from one of the companies, they pull up a mobile app and request one. They’ll be matched with a driver from the area, and once the ride is over, the app charges payment from the user’s credit card, so no cash is involved. The payments to drivers are described as “donations” rather than fares. Drivers act as independent contractors and share revenues with the companies.
Howard said there’s little difference between Lyft and Uber and other ride-for-hire businesses regulated by the city, such as taxis or limousines.
Drivers with those businesses undergo criminal background checks and motor vehicle record checks, and the companies are required to carry commercial automobile liability insurance. With taxis, the city can even require random drug screens of drivers. Those businesses or their employees also pay fees to the city for their permits, which services like Lyft and Uber do not do.
Lyft and Uber say that background and driver records checks are performed on drivers and that the companies have liability insurance in place covering driver liability.
Uber president and CEO Travis Kalanick wrote on the company’s blog Tuesday that the company had hired Giuliani Partners, the firm founded by former New York City Mayor Rudy Giuliani, to conduct a third-party audit of its driver background check system as part of its effort to be the “gold standard” for safety.
“Uber will complete an estimated 2 million background checks in 2014, more than nearly any other private company,” Kalanick wrote. ”The sheer volume of trips and large number of drivers on the system are responsibilities we take seriously – and we remain committed to continually raising the bar on safety.”
But Howard argued the city had no way of knowing what the companies are doing unless they share that information with the city.
“For the public’s sake, we need to know who operates these vehicles,” Howard said. “They’re saying they do background checks and have insurance. We’re saying, ‘Show me.’”
Memphis is far from alone in terms of determining how to handle companies like Uber and Lyft. The companies emerged and spread relatively quickly, leaving governments, transportation commissions, airports and regulators across the nation scrambling to play catch-up.
Lyft public policy communications manager Chelsea Wilson said last week that the company would prefer to talk with Memphis officials about possibly updating city regulations.
“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,” Wilson said.
Howard is open to that idea, but said Uber and Lyft would need to operate under the current ordinances and procedures until new ones are adopted.
“If our rules are outdated or what have you, we’re willing to discuss what we need to do,” he said. “But until that time, they need to operate under the rules we have.”