Uber to return to Auburn
The City of Auburn has given Uber the green light to return to the city — just in time for football season. Tuesday night the Auburn City Council approved an ordinance to amend the city’s vehicle-for-hire rules for ridesharing services Uber and Lyft. “Tonight, the city council created a permanent home for Uber in Auburn, and we look forward to bringing safe, affordable transportation options and flexible work opportunities to the community,” said Uber spokeswoman Evangeline George after Tuesday night’s decision. “Access to a reliable ride at the push of a button will help empower students, residents and visitors alike to make safe choices at the end of a night out.” Officials say the ordinance adds a section to the vehicles-for-hire code, which sets separate regulations for companies that use an internet application to connect passengers and drivers, stating that background checks are required, but may be performed by the company itself. Opelika-Auburn News reports that city documents reveal “Uber has reviewed this ordinance and our contact has expressed that they are agreeable to this language.” Uber previously operated in Auburn from August 2014 to January 2015, but was forced to leave after the city council passed an ordinance requiring ridesharing companies to have the same level of insurance coverage as taxi companies, as well as to display a city-issued driver’s business license. Uber could return to the Auburn streets as early as next month.
Tuscaloosa City Council approves deal allowing Uber rides
The Tuscaloosa City Council has approved a deal that’s expected to allow the ride-booking service Uber to begin operations in the city within a month. The Tuscaloosa News reports that the council on Tuesday voted 6-1 to change its vehicle-for-hire ordinance to allow Uber — as well as similar companies — to begin operations. Tuscaloosa Mayor Walter Maddox said he planned to sign the amended ordinance into law. Councilman Kip Tyner cast the lone dissenting vote. The Tuscaloosa newspaper reports that Tyner expressed concerns that the city’s traditional taxi and limousine companies are not treated fairly by the new rules, including the issue of how business licenses are granted. Republished with permission of The Associated Press.
Uber to launch in Huntsville Friday
Uber, the ride-hailing service based out of San Fransisco, is set to launch operations in Huntsville Friday at 4 p.m. Not only will the service be a boon for roving residents, there are already more than 20 jobs listed on www.simplyhired.com. The company received its business license in the city Thursday and, though a few last minute issues may stall the launch, it is set to begin zipping through town just as workers are heading home for the weekend. The Huntsville City Council approved a business license last week for Uber affiliate Raiser and last month passed two ordinances to allow Uber and similar services to operate in the city. “We were very excited to bring Uber here,” said Kelly Schrimsher, communications director for the city of Huntsville. “Uber has become quite the standard for people coming into town.” Schrimsher noted that Huntsville is an “international city,” which hosts scores of out-of-towners needing to get around. While she noted that it’s “too early to tell” what kind of effect the company will have on jobs or revenue, Schrimsher said it’s an excellent opportunity for people looking to make some extra money. Schrimsher commented that the city had worked with local taxi companies concerned about Uber’s presence in the city and added that there is nothing stopping local cab companies from offering similar services to consumers in the area. “It’s about consumer choice,” Schrimsher said. “And we don’t believe the government needs to get in the way of consumer choice.” Uber has come under scrutiny of late for its business model of employing private contractors to operate its pastiche tax service, which fails to provide health insurance or other benefits. Further, consumers have complained that rates may fluctuate enormously for seemingly short car rides. Despite that, the company has garnered wild success in cities across the country and may fair well in Alabama’s metropolitan areas, which generally lack adequate taxi services. Uber launched in Birmingham two months ago and in Montgomery January. “We’re looking forward to having the service here,” Schrimsher said, adding that the city encourages similar operations, like Lyft, to follow suit. New to Uber? Sign up and your first ride is on them (up to $15).
Daniel Sutter: Unintended consequences of Uber
The disruption of established taxi markets by ridesharing services like Uber and Lyft is bringing financial ruin to some in the industry. The consequences raise complicated economic, political and ethical questions. Uber and Lyft are ridesharing services. People sign up to drive using their own cars and drive on their own schedules. Riders use an app to request a pickup. The companies facilitate sharing by generating a minimum threshold of initial trust. We teach children not to accept rides from strangers; Uber helps customers trust the stranger giving them a ride. Governments have regulated taxis for decades, requiring taxis to possess a medallion to operate legally. Limits on the number of taxis increase fares compared to unregulated competition, making customers pay extra for rides. But cab drivers do not typically benefit from the system. Why not? Regulation makes each fare somewhat higher than otherwise; let’s say that this totals an extra $20 over a typical shift. But the cabbie will not get to keep the $20 – the taxi company monitors rides and fares. The extra revenue collected day after day goes to the medallion owner, not the cab driver. Obtaining a medallion would seemingly allow the driver, not his employer, to keep the extra revenue. Taxi medallions can be bought and sold, and generally purchase is the only option, since cites rarely issue new medallions. But as Lee Corso says on ESPN’s “College Game Day,” “Not so fast!” Owners looking to sell a medallion know that the buyer will get to charge higher fares, and will accordingly charge more for the medallion. This process, known as rent capitalization, constitutes one of the more confusing results of economics. The price of medallions illustrates the extent to which cities restrict the number of taxis. The medallion, after all, is just a bureaucratic permission slip and doesn’t help transport riders. In New York, the price of medallions reached $1.2 million. Taxi regulation costs consumers enormously, and yet in a very real sense does not benefit the vast majority of cab drivers and companies. Most medallion owners today entered the business by purchasing medallions, and so profits from operating cabs merely pay back the cost of getting into the business. Economist Gordon Tullock called such a situation the Transitional Gains Trap. Ridesharing has driven fares down to the level that would have prevailed without regulation. The price of taxi medallions has fallen dramatically, by more than 25% in many cities. The city of Philadelphia recently sold some new permits for $80,000; they had hoped to sell them for nearly $500,000. Current medallion owners may not benefit much from regulation, but they certainly bear the losses from its disruption. Not surprisingly, taxi companies have battling tooth-and-nail, seeking regulations to hamstring ridesharing and suing the companies. This political opposition may, at least in some markets, limit realization of the potential gains from ridesharing. The situation also raises an ethical question. Is it fair for the current owners of taxi medallions to bear this loss? Many were hard-working cab drivers who saved and borrowed to buy a medallion, and now face financial ruin. They made business and life decisions based on expectations created by government policy over decades. Should cities make good the promise of regulation reflected in medallion purchase prices? On the other hand, taxi regulation represents an improper use of government’s regulatory power. Regulation was (and still is) defended as protecting consumers from unscrupulous or even criminal behavior on the part of taxi drivers. Government is not supposed to simply enrich one group of citizens (sellers) at the expense of another (customers). Haven’t taxi riders suffered enough? We make decisions based on the economic world around us today, and the world we expect to prevail tomorrow. Even costly and ineffective government programs shape our expectations and decisions. Consequently, ending wasteful government programs costs more than imagined. Gordon Tullock concluded that avoiding such messes altogether was the only good solution to the Transitional Gains Trap. Hopefully the difficult straits of many in the taxi industry today will encourage us say no to new ill-advised regulations governments propose this year. • • • Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.
Montgomery city officials give green light to Uber, approves ride sharing ordinance
Montgomery City Council has voted to allow ride hailing companies such as Uber to begin operating within the city. Multiple media outlets report that city council approved the ordinance during a Tuesday night meeting. Ride-hailing services such as Uber and Lyft let people use smartphone apps to book and pay for rides. Montgomery Mayor Todd Strange told local media he expects the decision to attract young people and businesses to the city. Uber’s public policy manager for the Southeast Trevor Theunissen told local media that prospective drivers have already signed up to work in Montgomery. Council President Charles Jinright told the Montgomery Advertiser that Uber must now get a city business license and adopt a vehicle inspection plan. Jinright says Uber could be operating within two weeks. Republished with permission of the Associated Press.
Birmingham City Council gives Uber the green light
After a months-long push to allow Magic City residents to hail rides from the popular ridesharing app Uber, Birmingham City Council voted to approve an ordinance that would do just that on Tuesday. Representatives from the firm lauded the move popular service, along with competitors like Lyft, to open up shop in Alabama’s largest city within weeks. “Today’s action by the City Council is a win for riders, drivers and the city of Birmingham. We thank Council President Austin for his leadership, and look forward to bringing safe rides and economic opportunity to the Magic City in the coming weeks,” said Tom Maguire, General Manager for Uber’s operations in Alabama. Under the just-passed ordinance approved by a vote of 7-1, Maguire said he hopes Uber can begin offering rides as soon as the end of 2015. The ordinance – which Uber urged users to support via an in-app appeal – came with a last-minute amendment offered during the meeting. The amendment created a six-month provisional window during which the city will evaluate the status of safety, taxation, and other municipal concerns. City Councilors Valerie Abbott voted no, while Councilor Kim Rafferty abstained. Council President Johnathan Austin came out in support of the bill, after missing a meeting last month that had to shut down for lack of a quorum. Austin blamed the poor turnout by members on the the meeting’s proximity to the Thanksgiving holiday. Councilors Lashunda Scales, Valerie Abbott, William Parker, Sheila Tyson, Jay Roberson, Steven Hoyt, and Marcus Lundy also voted in the affirmative. The move came after about an hour and a half of debate, including some questions about city legal staff about how Uber’s vetting process for drivers. The amendment creating the six-month review period quelled those and other questions nay-sayers presented Tuesday. The ordinance doesn’t go into effect immediately, however. Birmingham Mayor William Bell – who had signaled his support for ridesharing in the past – must sign it in order for it to take force. Ride-hailing firms must then apply for and receive licenses for prospective drivers. The smaller municipalities of Homewood and Mountain Brook also recently passed ordinances to allow Uber et al. to operate within those city limits, making Birmingham the third city in the Yellowhammer State to open its roads to the services, though provisionally, at least for now.
Email insights: Birmingham’s guide to Uber ridesharing
San Francisco-based ridesharing company Uber has dominated headlines across the Yellowhammer state in 2015. Earlier this year Mobile welcomed the company to the city, meanwhile Birmingham has continued to give the Uber the run-around citing regulatory problems and concerns. Two and a half months ago Uber executives travelled to the Birmingham to meet with the city’s Committee of the Whole to discuss the potential for ridesharing companies to operate in the city. While the discussions seemed hopeful, little progress has been made in moving forward and Alabamians across the city are growing frustrated. However, these regulatory problems problems are nothing new to the ridesharing juggernaut and as such they’ve released a guide to to ridesharing to help answer questions and alleviate the concerns of Magic City residents. For Uber’s 101 guide to ridesharing in Birmingham, check out the email below. Ridesharing has only been around for a couple of years, and is very different than a taxi, a bus, or really any other transportation option out there. For instance, Uber’s ridesharing driver-partners use their personal vehicles to provide rides on their own schedules. In the U.S., 50% of Uber driver-partners, on average, drive fewer than 10 hours a week and 61% of driver-partners have full-time or part-time careers outside of Uber. Birmingham needs new rules that reflect the ridesharing model, particularly when it comes to three areas—background checks, insurance, and permitting—so that we can offer the same Uber experience riders have in places like Nashville and Atlanta. Check out how these three areas work in cities and states around the U.S., and how they need to work in Birmingham in order for Uber to operate. BACKGROUND CHECKS At Uber, our technology makes it possible to focus on safety before, during, and after a ride in ways that other transportation options cannot. While safety is more than just background checks, we believe that the process used by Uber stacks up well against the alternatives in terms of safety, and enables drivers to quickly and efficiently get on the road. All driver-partners wanting to use the Uber platform are required to undergo an extensive background check performed on our behalf by third parties accredited by the National Association of Professional Background Screeners. These providers use a process for Uber that is similar to that provided to other companies like Care.com, Starbucks, UPS, and Amazon. Going back 7 years, our vendors run a social security trace and then a background check to search for the person in a series of national, state, and local databases. These include the National Sex Offender Registry, National Criminal Search, and several different databases used to flag suspected terrorists. INSURANCE While accidents will occur in any transportation option, Uber ensures there is end to end insurance coverage in place for ridesharing trips. Uber has a commercial insurance policy that covers every ridesharing trip in the United States up to $1,000,000. So if an accident occurs while a rider is in an Uber on a trip, our insurance policy will cover personal injury and damage to property. This policy kicks in before any personal auto coverage that a ridesharing driver has and is double the amount of insurance required of taxis in Birmingham. Separately, if a driver is waiting for a ride request with the Uber app on and gets in an accident, we have an insurance policy that exceeds state minimums should the driver’s personal insurance not cover it. Do you love insurance and want to read our Alabama insurance policy? Take a look! PERMITTING REQUIREMENTS Around the country, ridesharing rules include a permitting process for the ridesharing company, like Uber, instead of for individual drivers. This process ensures a ridesharing company registers with the city or state and pays a fee to operate there, and that riders can get a reliable ride when they need one. Unlike taxi drivers, ridesharing drivers mostly use Uber part-time and for supplemental income. An individual driver permit may not be worth the cost or time for many Uber driver-partners. The process would disincentivize many drivers from partnering with Uber and make it more difficult for them to get on the road. For instance, those who have a 9-5 job and want to just use Uber on the weekends or to pay for a summer vacation would have to take off work to get this permit and may instead find a different opportunity. That means riders won’t be able to get an Uber when they need one, anytime or anywhere. Now that you’re ridesharing savvy, share your thoughts on these issues by submitting a public comment with the city. Remember, they are due November 13! If you’ve still got questions about the ridesharing business model, tweet @Uber_Alabama or reach out to support@uber.com.
Birmingham supporters of Uber, Lyft start Facebook, GoFundMe accounts
A Facebook page supporting Uber and Lyft came online Tuesday and as of 3:20 p.m. Wednesday already had 2,143 supporters. A GoFundMe account which indicates it was created by Bill Smith, the CEO of Shipt, has raised $1,940 toward a $10,000 goal. Organizers describe themselves and their goal on the page saying: We are a group of Birmingham citizens and businesses that are standing up for the transportation options that we deserve. Ride sharing is a necessity to create a vibrant city that attracts visitors and businesses … it’s not just a “nice” to have anymore. People that visit Birmingham expect to just open the Uber or Lyft app and get a ride on demand. When visitors realize these services aren’t available, it makes them think very negatively about our city. For Birmingham residents, ride sharing offers a safe option to get around when enjoying the awesome restaurants and bars around town. With 750 million dollars being invested downtown to build six new hotels and thousands of apartments, now is the time to bring ride sharing to Birmingham! Funds raised will directly support these efforts. Efforts include lobbying, PR, and marketing. Rep. Jack Williams sponsored legislation supporting ride sharing this past session. When asked about the organic movement he said, “I am glad to see continued public interest and support for bringing ride sharing to Alabama. I am asked about ‘when will Uber or Lyft come to Alabama?’ multiple times per week.” When asked about the page, a spokesperson for Uber said, “Uber is not affiliated with this group.” UPDATE: The GoFundMe page has been updated to reflect today’s news the Birmingham City Council has passed an ordinance provisionally approving ridesharing to operate in the Magic City. Writes page creator Bill Smith: I am super excited to announce the Birmingham City Council just passed a new Transportation Network ordinance that will allow Uber to begin operations. This is a major step forward for our city. There is a 6 month review period, I feel confident that there won’t be a problem moving forward after the review period. Uber hasn’t announced a launch date yet, as soon as they do I’ll let you know. When they do launch, let’s all make sure to use the service as much as possible. Thank you for supporting this effort!
Despite delay, Mobile still looks like it will lead the way with Uber
Mobile City Council was suppose to take up a measure on Tuesday aimed at allowing ride-sharing companies such as Uber and Lyft to be fully operational within its city limits. The vote, however, was pushed back a week. Sources tell Alabama Today, though, that the delay shouldn’t be seen as a major setback because most council members are expected to support the most recent proposals. The proposed changes to the city’s ordinances likely will be seen as favorable to both ride-sharing operations and traditional taxi cabs. It’s a model intended to keeping the playing field level by easing some restrictions on cab companies while allowing ride-sharing companies to come in while still maintaining high standards for riders in both operations. It’s a big turning point for Alabama. A move by Mobile to allow such services puts it leaps and bounds ahead of cities still holding out and fighting on behalf of a dated system reling only on the cab industry, such as Birmingham, Tuscaloosa and Auburn. There have been growing pains in the regulatory side since Mayor Sandy Stimpson of Mobile welcomed Uber to town in June, but again the city’s efforts are commendable. In a news release at the time, Uber stated, “We want to thank Mayor Stimpson for his leadership and vision in bringing innovative transportation options to Mobile. Uber couldn’t be more honored to connect Southern Alabama residents and visitors with safe, reliable and affordable rides.” Al.Com later reported that city council members took issue with the legality of Uber operating, a point that prompted Colby Cooper, the mayor’s chief of staff, to email council members, “The reality is we are dealing with a scenario where technology is outpacing regulations, and is creating a lot of gray areas for municipalities across the country.” All signs point to a city council responsive to its residents’ needs and opening the door for business. Here’s hoping others follow suit. We’ll keep you posted. (Looking back, check out Will Lochamy‘s guest editorial highlighting some of the benefits of Uber and busting some of the common myths here.)
