May 16, 2014 in Business

Ride-share startups reach Spokane, and taxi companies cry foul

By The Spokesman-Review
 
Tyler Tjomsland photoBuy this photo

Julie Hanson Secrest poses for a photo Thursday with her pink mustache-clad Honda Odyssey, which she drives for the ride service Lyft in Spokane.
(Full-size photo)

Two firms that use web apps to create a paid ride-share system as an alternative to taxis have begun operating in Spokane during the past three weeks.

And as they have elsewhere in the country, the ride-share companies, Uber and Lyft, have drawn the ire of local cab companies.

Both are headquartered in San Francisco. Lyft operates in 60 cities, and Uber has operations in more than 100 cities worldwide.

Lyft – whose drivers attach a large, fuzzy, pink mustache to their cars – has about 25 area drivers; Uber has about 30. Drivers in Spokane can sign up and work for both firms, company representatives have said.

Both work the same way, relying on mobile technology to arrange rides without any management or head-office involvement.

Customers download smartphone apps and create accounts. When a customer requests a ride, the apps provide a map showing where the nearest driver is and how long before the driver arrives. The drivers, who are considered contract workers, drive their own private vehicles.

Uber’s app lists the maximum and minimum fare before a customer confirms the request. For instance, it estimates that a ride from downtown Spokane to the Coeur d’Alene Resort will cost about $71.

Using a taxicab for that trip would cost about $95, not including a tip.

Both apps send a photo of the assigned driver and the car he or she drives. Fares or fees are based on distance and time of ride.

After arriving, the customer pays via the app using a registered credit card. No money is exchanged during the ride, and customers and drivers both get to rate each other. In general, the drivers get 80 percent and the ride-share firm 20 percent of the payment.

In Seattle, cab companies complained that Lyft and Uber are unregulated and don’t comply with state safety codes or pay taxes and license fees required of taxi firms. In addition, any taxi driver has to go through for-hire driver tests and pass detailed background checks.

The shared-ride firms believe they’re not subject to the same regulations, arguing they’re a new business with the designation “transportation network companies.”

Seattle City Council members originally voted to set limits on the number of Uber or Lyft drivers who could operate at a given time. Uber and Lyft then launched a voter effort to put the matter on the ballot. That effort was halted while all sides agreed to a 45-day moratorium – which is still in progress – to find a common solution.

Bill Boomer, who operates Spokane-based Bill’s Friendly Rides, said area cab companies are asking city officials to examine ways to regulate the ride-share firms.

“The main thing is, we want an even playing field,” Boomer said. “If we could do what they (Lyft and Uber) do, I could charge just a dollar a mile and make money at that lower rate,” he said. He estimates he pays about $2,000 per cab per year in state and local fees.

Boomer said Spokane has about 70 cabs on the road. He’s also president of a Spokane cab association comprising eight company owners who have met with city officials on how to address non-regulated startups like Uber.

City Councilman Mike Fagan said the new firms are using drivers just like taxi companies, and their parent firms are just dispatchers.

But he’s waiting for the city’s legal department to catch up on the issues and provide some advice before the council considers how to regulate ride-share companies.

“Government’s wheels do move slow,” Fagan said. “It’s been a couple months since the city started to address the Airbnb (house-sharing) topic. And we still haven’t taken care of that topic either.”

Spokane code enforcement officers have issued more than a dozen cease-and-desist orders to people using airbnb.com or other websites to rent rooms and other short-term accommodations. Critics of those services say the lodging websites make it easy to avoid hotel and other regulations and taxes. In late March, however, city leaders decided to delay enforcement to study the lodging issue.

City code covering “for-hire vehicles” has a long list of rules for taxi cab operators. A cab driver who offends a passenger by using “foul or obscene language,” for instance, faces the suspension or revocation of his or her for-hire vehicle license. Drivers also are banned from using tobacco in the cab and operating for more than 12 consecutive hours.

Boomer said if the city doesn’t address what he considers unfair competition, cab drivers in Spokane won’t renew their licenses.

“We’ll say we’re operating just like those other companies. Then the city will get nothing from us,” Boomer said.

In the short time the new firms have been in Spokane, response has been strongest from college students and business passengers, said Brooke Steger, general manager of Uber’s Seattle operations. She also oversees the Spokane launch.

Both Uber and Lyft do require car safety inspections and perform background checks to ensure they’re hiring safe and reliable drivers, she added. Uber requires cars no older than 10 years old. Lyft lets drivers operate a vehicle no older than a 2000 model year.

Applicants with a violent felony conviction or a DUI within the past seven years are not hired, Steger said.

Because of the rating systems, the companies can identify concerns over safe driving or other issues, said Steger.

Both firms have also added more insurance protection for drivers and passengers, a response to one major criticism the cab companies have directed against Lyft and Uber.

Steger said Spokane will never approach Seattle in business volume.

“We think Spokane is a great location. We’ve seen a lot of weekend traffic, and what we’re offering is a safe solution to help keep drunk drivers off the road, or help people find a ride to the airport,” she said.

Julie Hanson Secrest, who owns a Spokane dance school, signed up for Lyft three weeks ago and has been driving shifts since. She also just applied to drive for Uber. The jobs are a way to add some extra income, she said.

“I drive whenever I can, I don’t have any set hours,” said Secrest, who drives a recent-year Honda Odyssey van. She finds the best hours are after 8 p.m., often near the Gonzaga University district or near downtown.

Use of the service has been generally good, Secrest said, in large part because both Uber and Lyft allow new customers about 40 free rides during their first two weeks of membership.

But not many people in town know much about what the companies do, she added. “I have a lot of people who see the pink mustache, and they wave. They think it’s fun.”


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