Ridesharing companies are booming in car-centric Atlanta, but for Uber and Lyft a new market seems to always mean a new fight.
San Francisco based Uber operates in over 70 cities and 26 countries around the world. Founded in 2009, the company operates a smartphone application that connects livery drivers with commuters in need of a ride. Uber drivers own their own ‘black cars’ and are considered independent contractors. Uber receives a 20 percent commission on all fares, regulates pricing, and handles payment via its smartphone app. UberX is a lower-cost alternative featuring less expensive vehicles, similar to their competitor Lyft, another ridesharing app allowing drivers use their personal vehicles to transport riders for “suggested donations.”
On Tuesday, Georgia State Rep. Alan Powell, Chairman of the House Committee on Public Safety and Homeland Security, introduced a bill to regulate these ridesharing companies. HB 907 would “level the playing field” for traditional taxi companies by allowing the Department of Public Safety to license individual drivers, mandate criminal background checks and fine ridesharing services up to $50,000 for violations.
The bill was introduced just days after a cover story in the Atlanta weekly Creative Loafing detailed the industry battle already underway at the State Capitol. Uber entered the Atlanta market in mid-2012 with Lyft arriving about one year later. With limited public transportation options and only 1,600 licensed taxi cabs, the ridesharing apps have enjoyed early success in the Atlanta market. A representative at Uber claims that “tens of thousands” have used their service in Atlanta “in the past few months alone.”
Rep. Powell says it’s not his intention to hurt these new businesses’ bottom line, but that he “can’t shirk his duty to protect public safety.” A Lyft spokesperson told Creative Loafing: “what we do for safety far exceeds what is required of taxis and limos.” The company performs its own interviews and criminal background check and also takes out a $1 million liability insurance policy on all drivers.
Some drivers, however, are finding that those policies have gaping holes that come into play when a driver is en route to pick up a passenger. The policies only kick in when a passenger is in a car, and personal policies generally do not cover accidents that arise during livery service. So when an UberX driver struck and killed a 6-year old girl was on his way to pick up a fare on New Year’s Eve, the driver was left essentially uncovered.
Critics of ridesharing companies also maintain that the undermining of established taxi industries have unforeseen effects, such as reduced infrastructure revenue funded through taxi licensing and potential exclusion of traditional taxi drivers who usually do not own the cab they drive.
Protests against ridesharing companies have been staged by disgruntled professional drivers from Los Angeles to France who claim that the new businesses are tearing into their livelihood by reducing demand for traditional cab services. However, in Uber and Lyft’s birthplace of San Francisco the need for drivers may be outstripping supply, with Uber employees allegedly poaching drivers with the lower fees and cash incentives.
Some taxi companies have gotten in on the new business model with apps like Checker Cab App and Taxi Magic, but because the number of taxi licenses is state rationed, the same lack of supply that created opportunities for ridesharing companies in the first place applies to the cab company apps as well.