Is Uber a Taxi?

Regulation

BY JACOB OGLES SRQ DAILY MONDAY BUSINESS EDITION MONDAY JUL 13, 2015

While Uber drivers are already in the streets of Sarasota, the rules governing services like Uber are still being worked out at City Hall. City Commissioners voted last week in favor of a new set of regulations for “Transportation Network Companies,” but also made clear they wanted more information before finalizing rules and putting a new ordinance into effect.

The debate has pitted the interests of cab drivers against Uber and its part-time drivers. Existing taxi services feel Uber should be regulated exactly the same way as cabs, but officials with Uber say this is a new business model that must be governed differently. Under the Uber system, passengers can contact drivers who are part of the Uber network using an application developed by the company, then those drivers pick up the passengers to take them to their destinations. Drivers use their own cars, and payments are made to Uber, which then gives a percentage of the fare to the drivers.

The system has become a massive success in the tech world. But taxi and cab company owners and employees say Uber works around regulations that have been in place for decades. “We have no problem with legitimate competition in the City of Sarasota,” said Jon Nicholas, head of operations for Yellow Cab of Sarasota. “We have no problem with Uber as long as they follow the same rules and requirements to follow safety standards that we do.”

The ordinance being considered in Sarasota put in place requirements on commercial insurance, criminal background checks and vehicle inspections similar to those cab drivers must undergo. But Uber officials say it is not practical to put all the same requirements in place, because Uber, unlike cab companies, does not own the vehicles in its fleet and the drivers are not full-time employees.

Morgan Bentley, the Sarasota attorney representing Uber, said the company at this point is fine with insurance rules as written, and a compromise has been worked out that vehicle inspections required by Uber will satisfy city rules, along with a visual inspection by city officials. The biggest hang-up for Uber remains the requirements regarding a criminal background check. It’s not having a requirement at all, Bentley said—Uber already requires a background check of its own for drivers. But the background check will be conducted differently and require drivers to go through one more hoop to do business. “It is a chilling effect to get Uber drivers onto the platform,” Bentley said.

As an international company, Uber does not want drivers to have to go through a variety of differing background checks to drive between jurisdictions. But Nicholas said cab drivers who want to drive from the city to the airport need to be meet different requirements and this is no different.

City Commissioners say they want a system that let’s everyone do business, and feels some urgency to put rules in place as Uber operates today completely unregulated in the city. “We don’t have any intention—at least I don’t—of not allowing Uber to operate,” said Commissioner Liz Alpert. "People like it, it’s a great concept. It’s just, in my opinion, a different business model than taxi cabs, so we do need to figure the right balance.”

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