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Wednesday, January 8, 2014

Another Way in Which "Rideshare" Is Just Another For-Hire Vehicle

Posted by on Wed, Jan 8, 2014 at 12:43 PM

One thing that irritates me about so-called "rideshare" services like SideCar and Lyft is the silly way they pretend that they are not brokering business transactions. Rather than being charged a "fare" for services rendered, riders are prompted with an optional "suggested donation." Technically, the rider could choose to pay a lesser amount or nothing at all, but that behavior isn't sustainable as nobody would pick up a passenger with a history of stiffing drivers on fares.

"SideCar is not a taxi," SideCar vice president of communications, Margaret Ryan insisted in an interview last April. "There are no shifts, drivers drive whenever they like, and payment is voluntary." Well, not exactly. SideCar has long guaranteed minimum hourly incomes to drivers who cover certain shifts. And as of today, according to an email the company sent to drivers, this fictional voluntary payment policy just got even harder to believe:

Passenger Payment Updates:
Never again will you need to hesitate about accepting a high priced ride. As we work towards preauthorizing rider credit card information, Sidecar will now guarantee payment on ALL RIDES. That's right, any ride you complete you will be paid for, regardless of declined rider payment. A few things to mention:

  • Beginning today, Sidecar will guarantee payment on all completed rides
  • This change will not reflect any previous rides completed before today with pending transactions
  • If payment is pending 14 days after the ride took place, Sidecar will pay the driver the suggested donation amount
  • Our team is actively working towards adding additional systems that will significantly reduce payment processing time even further

SideCar provides a great service, and I'd love to find a way for these companies to survive. But merely pretending these are not cars for hire is not reason enough to exempt "rideshare" from the same rules, regulations, and license fees imposed on the traditional for-hire drivers with which they directly compete.

This "suggested donation" thing—a once-clever ruse intended to help the companies squeeze through loopholes in local law—is simply not believable. And at this point in the public debate, as council members prepare to regulate these new services, SideCar and Lyft only discredit themselves by clinging to this obvious fiction.


Comments (25) RSS

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Dougsf 1
Easy now, a similar loophole gets me drunk at art openings.

You're still right though. Seriously, just regulate these business for what they are—but a distinction should be made between a car service and a taxi. Let Yellow, Greytop, et al. retain exclusivity on street pickups, and let these business function as for-hire car services.
Posted by Dougsf on January 8, 2014 at 12:59 PM · Report this
CBSeattle 2
Those legal loopholes still exist, so isn't that why they are maintaining the fiction?

Once the laws are clarified I'm sure they will adjust their approach, until then it's a matter of staying in business and avoiding lawsuits.
Posted by CBSeattle on January 8, 2014 at 1:23 PM · Report this
I'm reading through some of the taxi regulations and they essentially ensure the company is more than a PO box and the driver has special training.…

Can someone who knows more about this system explain what is preventing new for-hire companies from just filling out the paperwork and getting their drivers licensed?
Posted by wxPDX on January 8, 2014 at 1:24 PM · Report this
Dougsf 4
@3 - I don't believe it would be profitable for a single person to operate outside of the infrastructure of an established company.
Posted by Dougsf on January 8, 2014 at 1:36 PM · Report this
100 roses, discreetly left in an unsealed plain envelope on the dash board.
Posted by Paul F on January 8, 2014 at 1:42 PM · Report this
Fnarf 6
@3, I'm not sure what you're asking -- are you asking why more for-hire companies don't fill out the paperwork to become taxi companies? Because there's a cap on the number of licenses. Licenses change hands rarely, on the open market, for many hundreds of thousands of dollars.

But I think Goldy's missing the point here -- these new services are APPS, and therefore COOL, and therefore exempt from the constraints of reason, law, economics, or anything else. Otherwise, you'll make the cool people cry.
Posted by Fnarf on January 8, 2014 at 1:52 PM · Report this
GlibReaper 7
plenty of these rules are violated on a regular basis. I like this one:

R. A for-hire driver shall not use a cell phone while a passenger is in the taxicab (Class B);…
Posted by GlibReaper on January 8, 2014 at 2:11 PM · Report this
Time to retire the word "ridesharing" when it comes to these new-tech taxi companies. There ain't no sharing going on. They provide a service and they charge money for it. Period.
Posted by Citizen R on January 8, 2014 at 2:46 PM · Report this
@fnarf; @3 wants to know why someone can't just start up their own, brand new, for-hire company. I agree, reading through the documentation there are hoops to be jumped through, but no stupid medallions to be purchased.

Uber operates as a for-hire car. UberX operates as a ride-share car. That is where the rub is at.
Posted by nador on January 8, 2014 at 2:46 PM · Report this
SchmuckyTheCat 10
A true ride share, the passenger is going to the same place as the driver. A service that allowed, say, a driver crossing a busy floating bridge to pick up a passenger ALSO crossing the bridge so they can use carpool lanes or whatever sounds legit. Picking people up in your car and taking them where they want to go is for-hire and should be treated as such.
Posted by SchmuckyTheCat on January 8, 2014 at 2:50 PM · Report this
Agreed. We'll said, Goldy.
Posted by David from Chicago on January 8, 2014 at 2:53 PM · Report this
Fucking autocorrect. "Well," not "We'll."
Posted by David from Chicago on January 8, 2014 at 2:54 PM · Report this
Cascadian Bacon 13
Yea fuck market competition for lowering prices while providing better service.
Posted by Cascadian Bacon on January 8, 2014 at 3:01 PM · Report this
@6, 9: Is there a cap on licenses, or not? I know that's the case in NYC and I've heard it is the case here. You'd think the city would be encouraging all for-hire drivers to get the right safety training regardless of the medallion situation.
Posted by wxPDX on January 8, 2014 at 3:55 PM · Report this
Josh Bis 15
Uber operates as a for-hire car. UberX operates as a ride-share car. That is where the rub is at.

Whoa. Really? I didn't know that. This is what the website says is required of UberX drivers :


In order to drive for uberX, you must be 23 years or older, and you must have your own car with insurance. You also must have a valid driver’s license and pass a criminal and motor vehicle background check.
Posted by Josh Bis on January 8, 2014 at 4:25 PM · Report this
JF 16
That irritates you? Why do you even care? Nobody is forcing you into the goddamn car.
Posted by JF on January 8, 2014 at 4:28 PM · Report this
Dougsf 17
@14 I always assumed there was, but I couldn't find anything in the language to support that—then, I have the reading comprehension skills of a tomato. A cabby blog (which estimated the price of a medallion in NYC at $1M) called Seattle's system "deregulated", not some analog of other city's medallion system I'd always figured it was.
Posted by Dougsf on January 8, 2014 at 4:34 PM · Report this
@15; exactly. UberX / Lyft / Sidecar all operate as ride-share. Anyone can sign up, pass the inspections and background checks by the affiliated company, and start giving rides. UberX / Lyft / Sidecar all carry insurance against those drivers in case of accidents during a ride-share. Regular Uber Black and Uber SUV drivers are licensed by the city already as they have to have a Limo Driver license in order to drive for Uber.
Posted by nador on January 8, 2014 at 5:37 PM · Report this
@3; How To Start Up Your Own For Hire Car Business:…
Posted by nador on January 8, 2014 at 5:47 PM · Report this
@17; the city of Seattle limits the number of licensed taxi cabs (medallions really). Here is a summary by Goldy a while back: "There are 928 licensed taxicabs in Seattle and King County, but nearly 6,000 licensed taxi drivers. This puts drivers at the mercy of a few hundred car owners, many of whom own multiple licenses."
Posted by nador on January 8, 2014 at 5:50 PM · Report this
Dougsf 21
@20 thank you.
Posted by Dougsf on January 8, 2014 at 6:38 PM · Report this

Posted by Confluence on January 8, 2014 at 7:04 PM · Report this
I think this case in S.F. is going to have huge implications for Uber and Lyft in Seattle:…

Uber claims that they and their drivers are fully insured, but in this case they are clearly trying to suggest that since the driver wasn't actively involved in a fare that they aren't responsible. What happens when the drivers personal insurance refuses to cover any of the claim because he was using his car for commercial purposes, thereby voiding the policy? Will Uber step up and pay? I'm really curious to see how this gets handled.
Posted by dpb on January 8, 2014 at 9:10 PM · Report this
Captain Carpool 24
Goldy gets it right when it comes to @Uber, @Lyft and @Sidecar. They are tarnishing the term "ridesharing" which has been protected by Federal (MAP-21 Section 1501) and State DMV laws for decades. A concept used by 12% of the USA population everyday whereby the driver does NOT earn a profit beyond the cost of operating their vehicle (currently $0.56/mile as defined by the US Government).

The CPUC determined that companies such as Lyft, SideCar, and UberX are charter party passenger carriers subject to CPUC jurisdiction. The CPUC created a new category of Transportation Network Company (TNC) to apply to companies that provide prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles. TNCs do not qualify for the rideshare exemption under PU Code § 5353(h). PU Code § 5353(h) exempts from Commission regulation: Transportation of persons between home and work locations or of persons having a common work-related trip purpose in a vehicle having a seating capacity of 15 passengers or less, including the driver, which are used for the purpose of ridesharing, as defined in Section 522 of the Vehicle Code, when the ridesharing is incidental to another purpose of the driver.…

The inevitable happened on New Years Eve, when an Uber driver killed a young girl in a tragic accident, forever changing the lives of the victims, driver, and the communities they each touched. An @Uber statement "The driver was not providing services on the Uber system during the time of the accident” may be a legal tactic to minimize their liability, but it clearly exposes the vast differences between insurance requirements for these TNCs as compared to taxis. . In the case of a traditional taxi, a transportation provider such as Yellow Cab would be clearly lia-ble, but their insurance would cover the driver, from the time a driver begins their shift unit they are off duty. If a TNC driver is "logged-in" while cruising the streets looking for a fare, then shouldn’t they be covered by similar corporate insurance policies?……

And what about all the Uber and Lyft drivers that openly admit they use these Apps while driving and respond to requests while their car is moving? A clear violation in many states in the nation.…

These TNCs are actually peer-to-peer taxis, that are expanding to transport both passenger, and packages, for a PROFIT. These vehicles-for-hire already have a competitive advantage based upon their next generation smartphone apps, but the services they provide are no different from a taxi or a delivery truck. They should be licensed and insured no differently.
Posted by Captain Carpool on January 10, 2014 at 7:11 PM · Report this
Uber,Lyft and Sidecar cut corners with public safety and call it innovation.

The reality is that for hire vehicles are on the road far more than private cars and have higher liabilties. Cab driving is one of the most dangerous occupations in the USA not only due to the risk of accidents but also from crime. Unless regulatory authorities mandate that for hire vehicles carry the expensive commercial liability and industrial compensation insurance, the cab operator nor the dispatch service(i.e. Uber) will not do it on their own.

That the unregulated "rideshare" operations are cutting corners can be seen in the New Year's eve fatality accident in San Francisco where an UberX driver ran over a family killing a six year old girl and hospitalizing the rest of the family.…

Uber's response was "We can confirm that the driver in question was a partner of Uber and that we have deactivated his Uber account. The driver was not providing services on the Uber system during the time of the accident." Stripped of the corporate double talk this means "Uber is not paying for this accident because the driver did not have our fare in his vehicle at the time. Go try and collect from the judgement proof cab driver".

The rub is that the UberX driver was operating with non-commercial insurance on his vehicle which excludes coverage for a business operation. This means that his private insurance will deny any claims from this accident. Uber claims to have a proprietary insurance plan that kicks in when the driver accepts a fare on his smartphone and ends when the driver hits the dropoff button. But outside these two digital events, the insurance coverage is supposed to revert back to the driver's plan which in this case and for most of these "rideshare" taxis means no coverage at all.

Uber brags that it checks the driver's insurance, driving record and criminal history. But it didn't catch the fatality accident driver's reckless driving conviction in Florida. It is also knew that this driver's non-commercial policy did not cover his UberX business. This is gross negligence on Uber's part.
Posted by ClaimsAdjuster on January 24, 2014 at 11:15 AM · Report this

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