Unlike traditional taxi businesses, transportation networking companies such as Uber and Lyft offer a mobile device-based service that connects people seeking rides with people who have cars.
Such services have generated intense public debate across the nation and in New Mexico, where both companies began operating in late April. Regulatory authorities nationwide are struggling with how to impose traditional rules governing taxi services on what is, in essence, a new model of public transportation made possible by 21st-century smartphone technology, though Lyft and Uber continue to operate in many markets.
The PRC voted 3-2 to deny Uber’s application because the company failed to provide required proof of insurance and adequate documentation of vehicle and driver safety.
The company had requested a waiver from those requirements, arguing that Uber can’t supply traditional documents that a taxi service might submit because its ride-sharing operation falls outside current rules and definitions under the Motor Carrier Act.
“To waive those requirements as requested by (Uber) would set a terrible precedent where every motor carrier — whether limos, shuttles or moving services — would also ask for waivers,” PRC General Counsel Rick Blumenthal told commissioners.
Granting such waivers also could be viewed as “arbitrary and capricious,” Blumenthal said, because the commission approved a “cease and desist” order against Lyft on May 21, but not against Uber.
Commissioners Pat Lyons and Karen Montoya voted against the application denial, proposing instead to give staff an additional week to examine alternative documentation that Uber had submitted as proof of insurance and safety compliance. For example, the company provided a copy of its insurance policy, which covers up to $1 million in liability if a Uber driver’s personal car insurance doesn’t provide coverage in an accident.
The motion by Lyons and Montoya was rejected.
But all five commissioners did vote unanimously to open a special rulemaking process to create a framework for transportation networking operations to be considered as “specialized passenger services.”
Uber already had requested specialized status in its application. But PRC staff rejected that because current statutes only provide such permits for firms that offer transport for passengers with special physical needs and in special vehicles.
Despite the application denial, Uber will continue to operate, at least for now, said Steve Thompson, Uber’s general manager for Albuquerque.
“We’ll continue talking with the PRC to ensure safety standards are in place and to find a home for Uber in New Mexico through the rulemaking process,” Thompson said. “But we need to hear from the PRC about the next steps. We’re still operating now, and as we head into the rulemaking, the assumption is that will continue.”
That may put Uber on a collision course with the PRC.
The commission already has ordered Lyft to cease operations or face fines and enforcement action through the Department of Public Safety’s Motor Transportation Police. A similar cease-and-desist order could be levied against Uber .
“We’ve been doing investigations of Uber the same as we did with Lyft, and we expect to file a report on that to the commission in about a week,” said PRC Transportation Division Director Ryan Jerman. “But it’s no secret that Uber has been operating.”
Jerman said Lyft is still providing rides to paying passengers. That information has been provided to the Motor Transportation Police, but no action has yet been taken.
The commission met in closed session Wednesday to discuss Lyft, which could face up to $10,000 in fines for each violation of the Motor Carrier Act the commission determines it has committed and for every day it continues to do so.
In the meantime, Lyft and Uber’s ongoing operations are generating angry responses from some commissioners.
“They need to stop trying to skirt the law,” said Commissioner Valerie Espinoza. “They keep looking for loopholes, for a definition or interpretation of the law that just doesn’t exist to continue operating.”
Espinoza said she’s gotten hundreds of emails from people for and against ride-sharing services, plus one threatening voice mail.
“Someone called and said they wanted to make sure the commission keeps Lyft up and running, and if not, I would have blood on my hands,” Espinoza said.