Taxicab App 'Uber' Convenient. But Is It Legal?
SAN FRANCISCO - In major cities across the country, a popular alternative to the traditional taxicab is on the move. It's called Uber. The fast-growing technology company connects passengers to drivers through a smartphone app.
It's typically cheaper and more convenient then a taxi, and sends cars directly to the customer.
"People have been really dissatisfied with the status quo and then this company comes along that says, 'Hey, there's this better way using mobile technology,'" Brian Tolkin, Uber Operations Manager for the Northwest, said.
"I think as long as its easy, safe, reliable and affordable that's a giant improvement over the status quo and people are saying, 'This is better than taxis; this is better than what I previously had,'" Tolkin said.
But Is it Legal?
Uber currently operates in 128 cities worldwide and its value stands at $17 billion.
But as Uber grows, legal challenges are expanding with it.
"The biggest problem is that a lot of the regulations that are on the books have been written at a time when smartphones didn't exist or certainly weren't ubiquitous in the same capacity," Tolkin explained. "And so when a new technology comes a long, that's when lawmakers and policy makers need to adapt."
But Taxicab companies argue it's Uber that needs to adapt.
Robert Werth, president of the National Taxicab Association, said if Uber wants to operate in a specific state it needs to follow the established law.
"These laws have been on the books for decades; they're laws that all transportation companies must adhere to in order to be common carriers in the state of Virginia," Werth said.
"There are other app companies that are operating within the state of Virginia today that are operating under the current rules and regulations. They are affiliated with taxicab fleets that are properly licensed, properly insured, their drivers have proper background checks and the fact that Uber is not adhering to those rules and laws is simply an immoral business practice," Werth added.
Power of Choice
Still, despite court orders, injunctions and even impounded cars, Uber continues to operate supported by consumers who are happy to have the freedom of choice.
The power of public opinion is forcing regulators to look seriously at the law and forcing taxicab companies to compete for customers.
Cab companies say they're aware that technology is changing the game, and they're working to change with it.
"Apps are nothing new. Taxicabs all over the country have apps. Our app called 'App a Cab' is basically the same format as what Uber and Lyft have," Frank Azzalina, of Hampton Roads Transportation, said.
"I think that's the incredible benefit of a market eco-system, that you can have competition which raises the bar of quality, provides consumers choice and provides drivers great economic opportunity," Tolkin said.
But Azzalina said it's not the the competition bothering cab companies. They simply want companies like Uber to play by the rules.
"We'd just like a level playing field. Uber and companies like Uber have drivers, they pick up passengers, they charge passengers and they pay their drivers. If that's not a taxi company, I don't know what is," Azzalina said. "What they're saying is if you call with a traditional telephone to order a cab then you need to be regulated, but if you're using an app to order a cab then you don't have to be regulated."
Author and economist Kevin Freeman said all this anger is misdirected.
"I can understand if I had a cab in New York City and I paid over a million dollars for a taxi medallion and somebody was able to share a ride via an app. I'd be very upset, too. But they're getting upset in the wrong direction," Freeman said.
"They should be upset that they have to pay a million dollars for a business license permission to drive a cab in New York. That's the government being too intrusive in the economy. If they didn't have to pay that million dollars I'm sure they could compete very effectively," he added.
In the end, it's likely that some laws will be adjusted, and Uber will work with the cities it operates in.
But for now, the battle continues.
"Technology and innovation are not the same as breaking the law," stressed Azzalina.
Tolkin said Uber has no plans to slow down.