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PRC opposes taxi monopolies, but splits on ride-sharing legality

A Lyft car, sporting its trademark pink moustache, drives behind a taxi in San Francisco. The New Mexico Public Regulation Commission is locked in a battle with Uber and Lyft over the legality of their services, which regulators say violate the state’s Motor Carrier Act. (Associated Press File Photo)

A Lyft car, sporting its trademark pink moustache, drives behind a taxi in San Francisco. The New Mexico Public Regulation Commission is locked in a battle with Uber and Lyft over the legality of their services, which regulators say violate the state’s Motor Carrier Act. (Associated Press File Photo)

ALBUQUERQUE, N.M. — As a part-time Lyft driver in Albuquerque, retired trucker John Gilpin said he’s found a great way to supplement his Social Security.

Since late June, Gilpin, 66, has spent weekday mornings providing rides for people who request them through Lyft’s ride-sharing app, which connects car owners with people seeking a lift.

“I’ve averaged about $500 per week,” Gilpin said. “Some weeks it’s a little more, some less, but that’s the average. And that’s just for four hours in the morning, four or five days a week.”

Like Gilpin, scores, if not hundreds, of car owners either are making a living or supplementing their income by providing rides to people through Lyft Inc. or its competitor, Uber, both of which began operating in Albuquerque in late April.

It’s not clear how many passengers are using the services, but drivers may be providing thousands of rides every month.

That represents groundbreaking change in Albuquerque, where taxi service has been monopolized for decades.

In fact, control over the Duke City market by just two firms, Albuquerque Cab Co. and Yellow Checker Cab – plus similar monopolies in other New Mexico cities – encouraged the state Legislature in 2013 to reform the Motor Carrier Act to make it easier for more taxi services to enter the market.

The New Mexico Public Regulation Commission, which administers the law, has opened the Albuquerque market to two new cab companies since last year despite intense efforts by the traditional companies to prevent that from happening.

Berlin  taxi drivers in June staged a protest against Uber. Authorities later banned the ride-sharing service from operating in the German capital. (AP Photo/dpa, Joerg Carstensen, File)

Berlin taxi drivers in June staged a protest against Uber. Authorities later banned the ride-sharing service from operating in the German capital. (AP Photo/dpa, Joerg Carstensen, File)

But now, the PRC is locked in battle with Uber and Lyft over the legality of their services, which regulators say violate the Motor Carrier Act by failing to provide the insurance guarantees and vehicle and driver safety assurance required of all commercial transportation businesses in New Mexico.

The commission approved a cease-and-desist order against Lyft last May, although it has yet to enforce it, and a public hearing is scheduled for October to amend some rules to accommodate ride-sharing firms.

Ultimately, the state Legislature may need to amend the Motor Carrier Act before the PRC can apply new rules. But for now, both Lyft and Uber continue to operate in Albuquerque.

Numbers hard to find

It’s unclear how many drivers or passengers are participating, because neither company has provided concise estimates on their operations.

PRC Commissioner Karen Montoya said Uber representatives told her that 15,000 potential passengers have signed up to use that company’s app in Albuquerque and another 4,000 in Santa Fe, but Uber would not confirm that.

“For competitive purposes, I can’t give actual numbers,” said Steve Thompson, Uber’s general manager for New Mexico. “But I’ve seen thousands of riders and hundreds of drivers signing up across New Mexico.”

As for Lyft, Gilpin said most days he’s one of nearly two-dozen drivers providing rides.

“It’s about 20 drivers on an average day,” he said. “I handle about 90 rides a month, so if other drivers are managing the same amount, then that’s about 1,800 Lyft rides each month.”

That’s probably conservative because Gilpin only works part time. But whatever the actual number, Lyft and Uber clearly are altering the traditional taxi landscape in Albuquerque.

A total of just 119 vehicles were providing taxi service in Albuquerque in early 2014 before Lyft and Uber arrived, according to PRC Transportation Division data on the city’s four authorized cab companies. That equals about two cars per 10,000 people.

That’s far fewer than cities of similar size, where the ratio ranges from a low of about six cabs per 10,000 people in Portland, Ore., to 21 in Denver and 28 in Boston, according to data from the national Taxicab, Limousine and Paratransit Association.

Lyft and Uber say they’re creating more opportunities for people to get rides, while offering needed jobs for drivers.

“We want to be here in the long term,” Thompson said. “Riders love it, and drivers are saying it creates a single or extra source of income for them.”

Taxi lobby influence

Uber believes much of the regulatory pushback it’s faced in cities across the U.S. comes from entrenched taxi industry lobbying to block competition.

“They use their incumbency to influence politicians,” said Uber CEO Travis Kalanick in a conference call with reporters Aug. 19.

Nevertheless, during regulatory proceedings in January, commissioners and PRC staff called efforts by incumbents to block one new cab company from receiving operating authority “anti-competitive,” “anti-American dream” and “ridiculous.”

Rather than incumbent taxi influence, commissioners question whether they have the authority to create new rules under current law to accommodate ride-sharing, and they all express concern about safety issues.

“We’re not protecting the traditional cab companies,” said Commissioner Pay Lyons. “We want to try and get Lyft and Uber temporary authority until the Legislature meets to address the deeper issues, but there have to be adequate background checks of drivers and vehicles and adequate insurance policies. Competition is good, and a lot of people seem to like these services, but we all need to play by the same rules.”

The Berlin Taxi Drivers Association protested against Uber in June, fearing the ride-sharing service would put cabs at a disadvantage by having to abide by rules that Uber didn’t. (AP Photo/dpa, Joerg Carstensen, File)

The Berlin Taxi Drivers Association protested against Uber in June, fearing the ride-sharing service would put cabs at a disadvantage by having to abide by rules that Uber didn’t. (AP Photo/dpa, Joerg Carstensen, File)

Both Lyft and Uber say the Motor Carrier Act doesn’t apply to them because they don’t operate commercial taxi businesses, but rather provide online programs for people seeking rides to connect through mobile devices with people who have cars. They own no vehicles, employ no drivers, nor transport passengers, fundamentally distinguishing them from “motor carriers.”

Lyft and Uber say they’re willing to work with the PRC to resolve regulatory issues, but commissioners say their refusal to first resolve legal issues before operating has created problems.

“Why not become legal first and then do business?” said Commissioner Ben Hall. “They’ve done it exactly backwards – coming in and doing business and then saying, ‘Excuse me, now I’ll work on getting legal.'”

That’s unfair to existing transportation companies, said Commissioner Valerie Espinoza.

“We want to stimulate the economy, but not by companies just bursting into the state and bullying their way in,” Espinoza said. “I find it unfair that other firms have been meeting all requirements for years, and then all of a sudden they face competitors who just don’t want to follow the same rules.”

But the ride-sharing companies say there are no rules in place for them to follow.

“We don’t believe existing rules apply to our model, so we don’t believe we are breaking any rules,” said Lyft spokeswoman Chelsea Wilson.

In the end, even if the PRC does approve temporary authority, Lyft and Uber likely will need to seek a permanent solution at the Legislature, said Fred Nathan, executive director of Think New Mexico, which drafted the transportation reforms approved last year.

“The challenge is that when we worked to modernize the New Mexico Motor Carrier Act two years ago, we didn’t anticipate companies like Lyft and Uber,” Nathan said. “PRC commissioners are in a difficult position because they don’t have the statutory tools to regulate these companies. The best solution would be to allow them to operate and then present these issues to the Legislature and the governor in 2015 to decide whether, and if so how, to regulate them.”

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