Articles

Uber, Lyft Ask Missouri Legislators to Void Kansas City Ride Sharing Agreement

The vehicle-for-hire companies propose that they should only have to apply for an annual permit from the state Department of Revenue, rather than purchasing individual licenses and certificates for vehicles and drivers.

by Jason Hancock, The Kansas City Star / February 18, 2016
A pilot program in Austin, Texas, offers wheelchair accessible vehicles to Uber riders, helping to accommodate disabled travelers. Shutterstock

(TNS) -- The accord between Kansas City and Uber may last less than a year.

Local officials and the vehicle-for-hire company came to terms last April on a set of regulations. Both sides have sung the praises of the new law, which allowed Uber to continue operating in Kansas City.

The agreement also short circuited an effort to impose standards drafted by the Missouri General Assembly.

But now Uber is back in the Missouri Capitol and pushing for the state to void Kansas City’s ordinance in favor of statewide regulations that they say would make it easier for them to operate in Missouri.

“As we look at comparable cities, growth in Kansas City isn’t where we want it to be,” said Robert Kellman, manager of public policy for Uber. “We want to reduce the red tape in front of individual drivers.”

Uber, which has its headquarters in San Francisco, has hired 11 lobbyists to make its case in Jefferson City, including Steve Tilley, former Missouri House speaker.

Lyft, another vehicle-for-hire company based in San Francisco that now doesn’t operate in Missouri, has joined in the legislative effort this year and hired three lobbyists.

Under the legislation they are supporting, a vehicle-for-hire company would no longer have to purchase vehicle licenses from Kansas City regulators, and individual drivers wouldn’t need to acquire a certificate from the city proving they passed a background check, have proper insurance and are legally able to work in the country.

Instead, Uber and Lyft would have to apply only for an annual permit from the Missouri Department or Revenue to do business within the state. The companies would be mandated to perform background checks on drivers, maintain proper insurance and ensure each driver has a clean driving record.

Uber and Lyft both say they already follow all these safety guidelines.

“There’s a misconception that we oppose being regulated,” said Chelsea Wilson, spokeswoman for Lyft. “That’s not the case.”

Local leaders are crying foul. They say the statewide standards aren’t nearly enough, and by pre-empting local regulations, lawmakers are turning public safety over to private companies.

And they have the support of local taxi companies, who argue the service they provide is fundamentally no different than Uber or Lyft, and should be regluated equally.

“The legislation takes all local regulation out of the equation, period,” said Jim Ready, manager of Kansas City’s Regulated Industries division. “It’s beyond just taking away local regulation. There is no regulation. These companies are going to monitor themselves.”

The battle between app-based vehicle-for-hire companies and local government is nothing new. It’s playing out across the nation as regulators race to catch up to technological advances that have created Uber and Lyft’s business model.

Twenty-eight states have passed statewide standards favored by companies like Uber. That includes Kansas, which last year passed regulations that drove Uber out of the state before backtracking and approving a more company-friendly law.

Critics claim vehicle-for-hire companies enjoy an unfair advantage over taxis when they provide the same service but don’t have to play by the same set of rules, regulations and licensing requirements.

“There should be no argument that Uber and Lyft provide transportation to the public for a monetary fee,” said Bill George, CEO of Kansas City Transportation Group, which runs Yellow Cab and other taxi serivces in the city. “The proposed bill strips the state and municipalities of any type of true enforcement over what is clearly a for hire business. If that is the state’s misguided intent, they must equally apply this measure to all vehicles for hire, including taxicabs.”

But supporters say app-based car services are distinct from taxis, and shouldn’t have to abide by similar regulations.

“It’s a different business model built on a technological platform,” said Missouri Rep. Kirk Mathews, a Franklin County Republican sponsoring the legislation. “They are a cyber-marketplace connecting drivers and riders. We can’t just treat them like a taxi company.”

Under Kansas City’s ordinance, Uber hires a third-party vendor to conduct background checks on potential drivers, requires them to have proper insurance and a safe vehicle. That driver doesn’t have to pay for a vehicle permit, since Uber takes care of that, but does have to pay $16 for a driver’s certificate.

“That basically means we need to take a picture of you, verify you’ve completed the background check, have proper insurance, and that you can legally work in the United States,” Ready said. “We do all that processing for $16. They only have to make one trip to my office.”

Kansas City also mandates annual criminal background checks, Ready said, which isn’t required in the Missouri legislation. And there is nothing in the bill, Ready said, that allows regulators to ensure background checks are being conducted.

Mathews said those protections don’t need to be spelled out in the legislation.

“If someone suspects there’s a violation of the state requirements, they can appeal to the Department of Revenue, they can appeal to local law enforcement or they can appeal to the company directly,” he said.

Wilson said safety is her company’s top concern, because “if riders don’t feel safe, we go out of business.”

Imposing regulations on individual drivers makes it difficult for vehicle-for-hire companies to succeed, she said.

“Eighty percent of Lyft drivers only drive 15 hours a week or less,” she said. “They are doing this in addition to another job or for only a couple hours on the weekend. When there are onerous burdens on individual drivers, they choose not to participate.”

But if Lyft’s business model is “so flawed that they cannot keep adequate drivers on staff, why is the state willing to relax all common sense citizen protections to appease multi-billion corporations?” George said.

The main goal of the legislation, Kellman said, is to ensure consistent rules across the state.

“We want to make sure that when a driver starts his day in Kansas City and heads into the suburbs, that he is fully compliant with regulations that are in place,” he said, “and that the mere act of crossing the street doesn’t change the regulations.”

If lawmakers want to impose statewide law permitting vehicle-for-hire companies to operate in Missouri, that’s fine, Ready said. But cities should be allowed to impose further regulations as needed.

“Liquor law in Missouri sets the basics, for example, but cities can regulate further if they need to,” he said. “And that’s worked very well. That’s because cities across the state differ greatly, and have to address local concerns at the local level.”

Mathews said he sees his bill as a way to ensure “Missouri competes in the 21st century economy.”

“We need to be opening the door to more economic opportunities, innovation and investment in Missouri,” he said, “from tech companies like Uber.”

The bills in question are House Bill 2330 and Senate Bill 991.

©2016 The Kansas City Star (Kansas City, Mo.), Distributed by Tribune Content Agency, LLC.