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New Ride-Sharing Services Drove Debate Over Safety, Regulations into Lexington, Ky.

A passenger along for the ride: A thorny local and national debate over regulating the companies built on digital advancements unimagined when local and state laws were passed.

by Sam Osborne, McClatchy News Service / June 17, 2014

Tech-dependent ride-sharing services uberX and Lyft have arrived in Lexington, giving residents more options for hired transportation.

A passenger along for the ride: A thorny local and national debate over regulating the companies built on digital advancements unimagined when local and state laws were passed.

UberX and Lyft connect those in need of a ride with drivers via a GPS-enabled smartphone app. Traditional taxi companies assert the competing ride-sharing operations offer the same services without the same consumer protections and costly rules of the road.

"This is a good example of how technology tends to way run way ahead of your statutes and your regulations," said Kentucky Transportation Cabinet spokesman Chuck Wolfe. "The law always seems to be playing catch up with technology."

Uber Midwest general manager Pooneet Kant said many regulations for taxicabs were written about four decades ago, without the knowledge or expectation of widespread smartphone usage.

"I think there needs to be a new regulatory approach to dealing with companies that provide this technology platform that connects riders with drivers," Kant said. "We look forward to working with any officials to come up with common-sense regulations that recognize the difference in Uber's business model and ensure a permanent home for ride-sharing."

Lyft, with its pink mustaches adorning the front of participating cars, launched in Lexington April 24 as part of an expansion that included Louisville and 22 other cities across the nation. UberX, the ride-sharing division of uber, began offering its services in Lexington Friday.

As a result, Kentucky and Lexington leaders are grappling with what to do. Spokeswoman Susan Straub said Lexington Mayor Jim Gray is gathering information. The city council's public safety group will discuss the issue next week.

Meanwhile, ride-sharing drivers are not required to get expensive licenses and permits standard for cabbies. A Lyft and uberx driver fills out an application and passes background and driving-record checks. Lyft drivers use their own vehicles, which must be a 2000 model or newer and in good working condition. Similarly, uberX drivers also use their own cars, but the vehicles must be four-door 2004 models or newer with no physical damage.

"These are companies that are providing taxi services, but they claim they aren't actually taxi companies," said Dave Sutton, spokesperson for the "Who's Driving You?" campaign organized by the Taxicab, Limousine and Paratransit Association. "That way they can get out of the cost, like commercial insurance, which is probably eight times more expensive than regular insurance."

The lower startup costs may help the companies, both founded and thriving in San Francisco's Silicon Valley, provide low-cost alternatives. UberX maintains on its website that its rides are "almost 50 percent cheaper than taxies in some cities". Lyft advertises on its website that "Lyft generally costs about 30 percent less than a similar-length cab ride".

Sutton argues the service is more dangerous, and the campaign he runs aims to make the public aware that danger.

Fourteen states and the District of Columbia have warned citizens about using ride-sharing operations because of insurance liability issues for drivers and passengers.

Kentucky hasn't issued a warning, but the Kentucky Department of Insurance is concerned about who is liable in an accident, said spokeswoman Ronda Sloan.

"We want to remind consumers that personal auto insurance does not cover losses that occur when the car is being used for commercial purposes," she said.

Uber and Lyft say they offer $1 million liability insurance policies covering drivers and passengers. But uber has refused to cover passengers' medical bills, Sutton said. In Sept. 2013, two passengers suffered serious injuries after their uberX driver collided with another vehicle in San Francisco. Uber asserted the bills were the driver's responsibility.

"No one has ever seen a full certified copy of their (uber) insurance and there has been a number on instances where people have been killed and injured and individuals have not been covered or received insurance," Sutton said.

In May, Lyft announced a partnership with insurance provider MetLife Auto & Home to protect Lyft's drivers and passengers.

Lexington taxi companies have complained about the competition, Public safety commissioner Clay Mason said. But the companies couldn't be reached directly for comment for this story.

"They do not feel like there is equity in how these folks are given the ability to pick up money by transporting people," Mason said.

In addition to the conditions of the vehicles used, Mason said he's concerned about the quality of the driver background checks.

Sutton said drivers for Lyft and uberX are not subjected to FBI fingerprinted background checks that taxi drivers are. On New Year's Eve 2013 in San Francisco, a 6-year-old girl was struck and killed by an uberx driver who had a prior reckless driving conviction.

"Our screening process is very rigorous," Lyft spokeswoman Katie Dally said.

The services have supporters. The California Public Utilities Commission recognized Lyft's efforts when the Golden State authorized peer-to-peer transportation last September. The commission noted "Lyft has ... acknowledged that safety is not only a priority, but there should also be some overarching rules and regulations."

While the larger debate unravels, ride-shares have capitalized on the ease of reaching customers via their smartphones.

University of Kentucky senior Jared Sigler said he's used Lyft about 15 times. He said the simplicity is preferable to requesting a taxi.

"Its easier to use Lyft because it pinpoints your direction, and you don't have to call them," he said. "You just use the app and you're able to request Lyft exactly where you wanna go and they arrive at your doorstep."

Michele Delbridge became a driver for Lyft after quitting her job at Xerox on a whim. The new undertaking has been lucrative; Delbridge said she has made a little more than $4,000 since she gave her first "lyft" May 9.

Delbridge gets a varied mix of customers, from college students in need of a sober lift after a night out to adults who want a ride home from work. She makes a point to keep her car clean and offers snacks and beverages she keeps in a Styrofoam cooler. She has TV's in her backseat and a selection of DVDs.

"Everybody loves my car," a white 2013 Dodge Charger, Delbridge said, who has a 4.97 rating out of 5 on the Lyft app. "With Lyft, they have that one-on-one kind of friendship and relationship when they get in our vehicles."

Delbridge said her customers are "shying away from taking a taxi unless they absolutely have to."

©2014 the Lexington Herald-Leader (Lexington, Ky.)

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