March 25, 2017
"Getting There" - Is Uber Playing Fair ?
It looks like the fate of Uber (and Lyft, the other popular ride sharing service in CT) will be decided in Hartford in a lobbying war, not in the competitive marketplace.
In the 3 years since Uber launched in Connecticut it’s enjoyed strong growth, now using 9000 drivers who carry hundreds of thousands of passengers annually. Full disclosure: I am one of those customers and am very happy with their service.
I tried Uber after getting sticker-shock for the “black car” limo fees to go to NY airports: over $180 one way from my home to JFK vs $80 by Uber. Mind you, the rides are different: the limo is a real limo, but the Uber X is some guy’s personal car.
The limo driver has a commercial driver’s license and has undergone extensive screening and drug testing. Uber screens its drivers but now will consider non-violent felons to join their fleet (and I’m OK with that… everyone deserves a second chance).
The limo driver has tons of insurance. The Uber X driver is covered by Uber’s policy when he’s carrying a passenger. CT law says that taxis and limo’s must undergo extensive safety inspections each year. The Uber X driver doesn’t.
But if you have a problem in a taxi or limo, who do you complain to? All cars for hire in Connecticut are regulated by the state DOT and we know how responsive they are to public complaints. But if you have a bad Uber ride you can complain immediately using their app. I have done that, on rare occasion, and got an immediate response… and a small refund.
There’s a big difference between a shiny limo and a beat-up taxi. Local taxis tend to be older and in pretty bad shape. Their drivers are rarely the owners, so what do they care about the condition of the vehicle?
Uber takes heat for their “dynamic pricing” model where rates go up with demand. Need an Uber during a bad storm? You’ll pay more to incentivize drivers to stay out on the road. But taxi meters know no “surge pricing”.
Neither driver is making a lot of money. One study pegged Uber-X drivers to an average $15.68 an hour. And Uber prides itself on its no-tipping model, though I always tip for good service. These folks are just trying to make a living.
But if you believe recent testimony in Hartford, the taxi industry in this state is on the verge of collapse. They say they can’t compete with Uber and Lyft if they can’t have a level playing field of regulations. And I think they make a good point.
Is it fair that Uber and Lyft pay no state sales tax? Is it fair that out-of-state Uber drivers can pick up Connecticut passengers, but CT drivers have to return empty from NYC runs? Is it fair that CT taxi and limo drivers are held to a much higher safety, licensing and screening standard than the college kid driving his Toyota for Uber on weekends?
Uber tells me all these issues are up for grabs as they negotiate with lawmakers in Hartford. For three years Uber has been able to kill bills that would have regulated their industry, once hiring a lobbyist for $20,000 for a single day to thwart an unpopular bill. I guess even lobbyists have “surge pricing”.
I like Uber (and Lyft) and hope they survive. But I also like reliable and affordable taxis and black cars and think they are over-regulated. Let’s level the regulatory playing field and allow competition to see who serves customers best.
Reprinted with permission of Hearst CT Media