It’s hard to imagine now, but there once were things you couldn’t do with an app on a smartphone. Until recently, one of those things was catch a ride in Cincinnati.
That changed when ridesharing companies Uber and Lyft came to town in March. But as catching a ride has gotten simpler, questions around the role of regulation have gotten more complex.
Both companies have been growing at a breakneck pace since they started four years ago, expanding from their home bases in San Francisco to numerous cities around the country and across the world. Ridesharing’s quick rise is a classic tale in the disruptive technology meets free-market triumph trope. New tech, in this case an application downloaded to a smartphone, enables companies and consumers to bypass cumbersome and over-regulated old business models like the taxi industry.
At least, that’s what Uber and Lyft say.
But cab drivers and company owners see another side of the story. While rideshare companies tout their efficient business models, taxi companies say the real reason they’re surging ahead is because they have little or no city oversight while cab companies must abide by a long list of rules.
Some of these rules seem commonsense — screening and licensing procedures for drivers, commercial insurance requirements, a set $2-a-mile fare. Other regulations are more exacting, even onerous — when a cab driver can wear shorts, for instance, and a stipulation that they must be solid-colored.
Whether preventing cabbies from wearing Bermuda shorts in December is in the public’s best interest is a worthy debate, maybe. But the bigger argument — whether some companies providing a service should be subject to regulations while others aren’t — is a fight that’s been raging in Cincinnati since rideshare companies set their eyes on the city.
Rideshare controversy in Cincinnati
In May, 40 taxi drivers, managers and company owners protested outside Cincinnati City Hall, decrying the fact that the new rideshare companies are unregulated. City Council will soon consider an ordinance by Councilman P.G. Sittenfeld that would hold Uber and Lyft to some, though not all, of the same regulations, such as insurance requirements and vehicle inspections. Sittenfeld has been an advocate for Uber and Lyft, helping convince the companies to come to the city. Council will consider the proposal when it returns from its recess in August.
Uber Ohio General Manager James Ondrey says Uber doesn’t oppose all regulations, since the company does some of the things required of cab companies anyway. But he also says the company isn’t the same as a taxi company and shouldn’t be regulated the same way.
“Uber is a technology company,” Ondrey says. “We’ve built a mobile platform that connects users with drivers giving rides. They’re not employees. They’re independent contractors who pay a small fee to us to use our platform.”
Bill McCoy, general manager and part owner of Cincinnati’s Towne Taxi Cab, says the drive for equal regulation is about a level playing field. Town Taxi is one of Cincinnati’s largest taxi companies, running about 95 of the city’s 450 taxi cabs.
“The regulations are for the public good,” he says, noting that his company doesn’t object to fair competition. “Anyone coming in here, it’s all good, as long as they’re regulated.”
McCoy ticks off the list of conditions a taxi driver must legally meet to drive in the city. First, there’s a city-administered test, which costs $40 and assesses the driver’s eyesight, knowledge of the city’s geography and city laws. After that, there are city requirements on the condition of the driver’s car — clean inside and out and in good mechanical condition. There are also the record-keeping requirements, which stipulate that a company must keep all records of every ride for at least six months.
Then there are the insurance requirements. Towne Taxi has a group plan that provides commercial insurance to its drivers, though some companies’ drivers buy the insurance independently.
Companies like Uber and Lyft do some of these things, but they do so on a voluntary basis and in a way that can leave gaps. Rideshare companies often provide a kind of insurance, usually a $1 million commercial driver liability policy, but the insurance only covers the driver while they are transporting a customer with their rideshare app open, so a driver rushing to pick up a customer on the other side of town may not be insured commercially.
This gray area was tragically illustrated last New Year’s Eve, when Syed Muzzafar, an Uber driver, turned right into a crosswalk in San Francisco’s Tenderloin District, hitting Huan Hua Kuang, her son and her daughter, Sofia. Six-year-old Sofia later died of her injuries. Since Muzzafar was driving between fares at the time, Uber has argued that the company and its insurance are not liable for the accident. The matter has yet to be settled in courts.
“This company needs to be responsible. ... Sofia’s life matters,” Kuang said in June at a legislative hearing on a proposed California law that would require full-time insurance for rideshare drivers.
The tragedy has been a dramatic chapter in the pitched battle over rideshare companies in San Francisco, where companies like Uber and Lyft have been squaring off with deeply entrenched cab companies.
There, city regulations often lobbied for by cab companies have kept the number of licenses for operating cabs low, around 1,600 for a metro area of more than 7 million people, squeezing the amount of competition. Established cab companies have a strong leg up on both newcomers to the market and drivers, who are charged large fees for renting cabs. That’s left a huge demand for more cabs. Rideshare companies say they’re simply responding to a need in the San Francisco market left by overbearing regulations and a monopolistic syndicate of cab companies.
But critics in San Francisco have persisted. They say these new companies are simply ignoring rules that they decide don’t apply to them.
That fight is a microcosm of the sort of welcome Uber and Lyft usually get as they expand. Uber now serves 150 cities in 40 countries, including London and Berlin, where ongoing protests against the companies have swelled to as many as 30,000 drivers. These drivers engage in strikes or bring parts of those cities to a standstill as they block traffic with their cabs in protest against the rideshare companies.
It’s been a similar, if less intense, fight in cities around the region — Columbus is considering banning the rideshare vehicles outright, for instance — and now the battle is playing out here.
Both sides of the fight
I wanted to experience both worlds firsthand. I was also craving my favorite Indian restaurant in Roselawn, so I decided to take a cab up that way and try to catch a ride using one of the ridesharing apps on the way back.
I called the first cab company that popped up on Google, Cincinnati Taxi, and about 10 minutes later a bright green and white cab pulled up outside our building downtown.
T.C., the driver, was friendly and more than happy to talk about Uber and Lyft.
“I don’t think they will last,” he said of the companies. T.C. said the rideshare companies haven’t hurt his business at all, and though this may have just been a kind of bravado, he did make an interesting point. He said his riders are mostly regulars, people he’s gotten to know over time. Most are folks in lower-income neighborhoods who need rides to the grocery store or some other errand.
T.C. thinks Uber and Lyft serve a different clientele, “the Hyde Park and Mount Lookout crowds,” he said.
T.C. compared rideshares to a long-running phenomenon in the cab world — so-called bootleggers, or cabs that operate under the radar, unregulated. He said one of the reasons his clients stick with a single cab company is because bootleggers have taken advantage of people in the past — charging high prices, for instance, or driving away with personal items or groceries. T.C. says the folks who ride with him aren’t likely to trust a random person they find on the internet.
To him, part of his business is about building trust and a sense of dependability, something that’s hard to do in the randomized world of ridesharing.
“If I break down, I just call back to my boss and someone comes and picks you up right away,” he said. “Who does a Lyft driver call? A friend? Some other joker?”
The city’s regulations actually help taxi drivers in terms of the trust factor, he said.
“We have meters. We have inspections. And we have a code of conduct.”
After lunch, I perused the rideshare apps to find a ride back downtown. Despite offering similar services, Uber and Lyft are two very different entities. Uber has big corporate backers including Google, which put $258 million into the company last year. In Cincinnati, the company offers two separate services — a fancy one called Uber Black that actually connects you with fully licensed, insured, off-duty limo drivers for a premium price, and Uber X, the more traditional, taxi-priced rideshare experience. Uber’s sleek, sans-serif font and monochromatic color scheme looks a little like the branding on an expensive nightclub, which is probably appropriate.
Lyft, on the other hand, has a much friendlier, even slightly twee vibe. The dominant element in their app’s aesthetic is a cartoony pink balloon and the brand name is laid out in big bubbly letters. Even the service’s signature pink mustache, which adorns Lyft drivers’ cars, seems designed to telegraph a kind of fun approachability. There were three or four car icons driving around on the maps in both apps. I was feeling slick and suave, and randomly decided I’d try Uber. I entered my credit card info into the app and waited for my ride.
Omar picked me up outside the restaurant about 20 minutes after I’d requested a ride on Uber’s app. I could watch the comically oversized icon representing his car making its way from downtown on my phone. He pulled up in a nice late-model Honda Accord, shining silver with tasteful custom rims and an immaculate interior.
Out of curiosity, I asked Omar if he’d ever picked up anyone in Roselawn before. He told me just once, about a week before. Most of his rides, he said, come from downtown or around UC. But he’ll pick up any ride he’s offered, even unprofitable ones, he said, because Uber keeps track of how many rides a driver turns down, which in turn affects a driver’s rating and can eventually cost her or him the job. Rides are doled out based on proximity–the closest driver gets first crack at a ride.
Omar said he’s been driving for Uber for about two months. When he signed up, Uber asked for pictures of his car — the company requires nice cars, 2005 and newer — and documentation, including his title, insurance information and driver’s license. After a couple weeks, he received an iPhone from the company loaded with Uber’s driver software.
During that time, the company was checking his background. Uber’s background check process is extensive, according to Ohio manager Ondrey. A driver can’t have DUIs, felonies or speeding on her or his record. There’s also a rating system in place to ensure a quality experience, he said.
“If drivers don’t meet that criteria, it’s just a partnership,” Ondrey says, “and we can say, ‘You know, I don’t think this is working out.’ ”
He says the rating system is floating scale and that the average driver is 4.6 or 4.7 out of five.
Before dropping me off, Omar told me he sees cabs and rideshare companies as distinctly different businesses.
“Say you ask your neighbor for a ride. ‘I’ll give you 10 bucks if you take me downtown.’ How is that different than this? I already pay my registration fee to drive my car. If I have to pay to give someone a ride, you’d have to charge everyone on the road, because you don’t know who’s doing what in their car.
“I don’t understand why the city would fight it if customers are happy,” he said.
Unfair advantage or better business model?
Customers are happy, at least according to the companies, who point to their growing presence in the city. Though neither ride sharing company releases the number of drivers or users it has signed up, both report highly increasing demand in Cincinnati. Ridesharing fans say the apps provide a special experience that cabs don’t.
But the very things that make Uber and Lyft easy — the lack of regulation, the ease of becoming a driver — are what make their entry into Cincinnati and other markets so complicated. It’s unclear if the rideshare business model can remain attractive to drivers and riders in Cincinnati if regulations are put on the services.
Robert Ritter is somewhere in the middle of the rideshare-taxi debate. Ritter works full-time at Amazon and lives in Dayton, Kentucky. He drives a few hours a week for Lyft, keeping a spreadsheet so he can figure out how much he’s making, which he says is about $15 an hour. He sees the benefits of the app and enjoys the extra money, but is also somewhat unclear about issues like insurance.
Ritter says the push to pass regulations “makes total sense” but would probably push him out of the job. Lyft’s driver selection process takes less time than Uber’s, Ritter says, and is certainly easier than becoming a taxi driver. That’s what drew him to doing it in the first place, but it also gave him pause initially. “When I first heard about it, I thought, ‘Well, this is weird, how am I able to drive tomorrow, when I haven’t taken any classes?’ ”
Ritter says he thinks the service is useful and positive, “but they should regulate it and make it an even playing field” with taxi companies.
Like Ritter, Omar — the Uber driver who gave me a ride — said he wouldn’t continue if regulations were passed.
“No,” he said flatly. “It’s not worth it for me to pay for the license.” ©
From: Sung Korean Bistro, Downtown
From: Neons, Over-the-Rhine
From: 12th and Vine, Over-the-Rhine
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