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VOL. 129 | NO. 220 | Tuesday, November 11, 2014

Ridesharing Could Get City OK

By Amos Maki

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Legislation making its way through the Memphis City Council would allow transportation network companies such as Lyft and Uber to operate under the law.

Legislation moving through the Memphis City Council would regulate transportation network companies like Lyft and Uber.


Regulatory issues surrounding the services, which spread quickly across the country and sometimes violated dated municipal transportation policies, arose earlier this year.

The city sent Uber and Lyft, which both began operating in Memphis this year, cease-and-desist letters in July, saying the app-based services were skirting city laws that require inspections, background checks on drivers, and fees, which Uber and Lyft do not pay.

But an ordinance sponsored by City Council members Kemp Conrad and Myron Lowery paves the way for the companies to be regulated locally and operate legally.

“It creates a new class of transportation network companies and sets forth pretty reasonable guidelines to bring them into compliance so they can operate in the city,” said Conrad.

On Facebook, Lyft is urging people to contact council members, saying the council is close “to voting on a new law for apps like Lyft, but special interests are trying to derail the process.” Lyft did not specify who the “special interests” are.

The ordinance is awaiting a third and final reading before the council, but will be delayed until a revamped taxi ordinance is brought forward.

“We’re also revisiting the taxi ordinance, which is pretty outdated,” said Conrad. “We want to have a policy that allows these transportation providers to operate, but we don’t want to have undue burdens on taxis either.”

Lyft and Uber, both based in San Francisco, are 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.

They compete with taxi services and other ride-for-hire businesses, touting their supposed lower rates and friendly policies such as allowing passengers to ride in the front seat.

Locally and nationally, taxi companies have complained loudly about the services, saying they provide a similar service to taxis without all the regulatory burdens.

Drivers with those businesses undergo criminal background checks and motor vehicle record checks that are provided to the city, and the companies are required to carry commercial automobile liability insurance. With taxis, the city can even require random drug screenings of drivers. Those businesses or their employees also pay fees to the city for their permits, while services like Lyft and Uber do not.

Ham Smythe IV, president of Yellow Cab and Checker Cab, said he opposes the proposed legislation in its current form and he wants uniform policies for taxis and companies like Lyft and Uber.

“We believe this legislation should not be allowed to go forward without a comprehensive look at all vehicle for hire legislation,” said Smythe. “We would like to operate under the same rules or they need to operate under our rules. It should be a level playing field and we’ll take either end of that deal.”

The new city ordinance requires companies like Lyft and Uber to maintain primary insurance coverage of at least $1 million and uninsured/underinsured motorist coverage of at least $1 million while they transport passengers. The companies would have to pay $10,000 annually for a city permit and conduct, or have a third party conduct, background checks on drivers and vehicle inspections.

Memphis is far from alone in terms of determining how to handle companies like Uber and Lyft. The companies emerged and spread quickly from city to city, leaving governments, transportation commissions and regulators across the nation scrambling to play catchup.

Conrad said allowing the companies to operate provides more transportation options for residents while allowing drivers to earn some cash.

“To me, this is about econ empowerment,” said Conrad. “Economic growth is directly linked to transportation options and it also provides a way for Memphians to earn money by driving fellow citizens around.”

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