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Penny Wise and Pound Foolish

Taxi Companies Uber and Lyft Aren’t Regulated As Such


Having driven a taxicab in Santa Barbara for the past 16 years, I feel especially qualified to weigh in on the incursion of the “ride sharing” industry composed of the online companies Uber and Lyft.

The term “ride sharing” is a misnomer. The only two ways “ride sharing” could be an accurate description of the service rendered, would be if 1) Uber or Lyft gave a customer a ride now in exchange for a ride from the same customer in that person’s vehicle sometime later, or if 2) Uber or Lyft picked up multiple individuals who were all going to the same relative destination, as a city bus does. Given that Uber and Lyft charge their fares based on the same factors that taxis do, distance travelled and time consumed, they are quite simply taxicabs. There’s no “sharing” in the equation.

Uber and Lyft are taxi companies. Accuracy in labeling such a new innovation for intellectual consumption is the responsibility of the media. I shouldn’t have to spend time conducting in the preceding breakdown what is obvious to any consumer. If an industry is improved through technology, there’s no need to confer a new label. When typewriters became digital keyboards, the media didn’t change the basic label of its product. Newspapers were still newspapers, magazines were still magazines. The advent of online versions of these products resulted in the addition of the word “online” to the preexisting labels. That’s all. If anything, Uber and Lyft should be labeled online taxi companies. The “ride sharing” label makes no intellectual sense and just reflects these companies’ attempts to distinguish themselves from their competition. Media that follow along are either dimwitted facilitators or complicit in the marketing scheme.

Sometime in 2013, I became aware of Uber’s emergence as a competitor in the taxi industry. I soon realized that unlike my requirements, their drivers had no business or taxi license, the vehicles had neither commercial plates nor commercial insurance, and the drivers were neither fingerprinted nor subjected to a drug screening. Since the taxi industry in Santa Barbara is administered by the police department, I naively assumed that the police would likely begin to cite Uber and Lyft drivers for being out of compliance, as was happening in places like Portland, Oregon. That never occurred.

I find this confounding. Not only do Uber and Lyft not pay any administrative fees for the privilege of doing business on the streets of Santa Barbara — I paid $350 in licensing fees up front and pay approximately $150 per year in renewal fees — they were being green lighted by that same entity. SBPD does not enforce the laws on paramutual transit and deprives the city’s coffers of fees. The compromise to public safety is very odd in a city whose multimillion dollar tourist industry would seemingly dictate comprehensive protection.

I grew skeptical of the police department after media accounts back in 2011 showed it protecting rather than prosecuting officers who were said to have falsified arrest reports in DUI cases. But I couldn’t fathom how the City Council turned a blind eye to Uber and Lyft’s illegal business practices.

These days I have a clearer understanding of it all, and it’s malodorous. Summoning a taxi ride online via smart phone and a low price per mile (most of the time) automatically charged to the customer’s credit card have made Uber and Lyft the darlings of taxi customers here. But if people would think it all through, as I have been compelled to do, they might change their preference.

Uber and Lyft are not in the transportation business. Their business is their app. They claim their drivers are independent contractors, thus effectively denying them workman’s compensation benefits in the event of injuries, even as they issue them company checks and customer service ratings. They are operating this techno-connection service worldwide, collecting approximately 25 percent on each transaction while informing their customers that it’s not necessary to tip the driver. How absurd is it that Uber, valued at $50 billion dollars, tells the public not to tip the driver?

Aside from not receiving tips, Uber drivers’ earnings are modest. If they average three fares per hour for 10 hours of work and their average fare is eight dollars, their net after Uber takes its cut is about $180. Subtract fuel and wear and tear on the vehicle, and the hourly wage falls to less than $15, before taxes. Some drivers are also making a monthly payment on their vehicle. While the value of Uber and Lyft rises to record setting billions, their drivers might not make enough to maintain their vehicles, and there is no vehicle inspection system as the miles escalate. Taxis in Santa Barbara must submit to and pay for a quarterly safety inspection.

Across the globe, the income of millions of taxi drivers are being torpedoed by Uber and Lyft, which have succeeded in diminishing our earnings potential, diminished passenger safety by fielding poorly vetted drivers, and placed no system to assure continued vehicle safety. And the naïve public supports this mega corporate industry. One of the reasons Walmart is not welcome in our community is because our civic leaders do not condone this mega corporate entity undercutting our merchants. To save a relative few bucks, or out of sheer apathy, our community leaders have allowed the Walmarts of the transportation industry, Uber and Lyft, to come in and undercut the price of a cab ride, victimizing all drivers in the process.

For me, 16 years of assuming the physical risks associated with the vocation, while providing impeccable service, has resulted in a $10,000 per year pay cut. Although many of my regular customers have remained faithful, plenty of others have snuck off to travel with inferior drivers. Heck, some Uber and Lyft drivers come from Oxnard or L.A. day by day, night by night, with extremely limited knowledge of the lay of the land.

Sure, this type of evolution is inherent in all low-skilled vocations. I continue to survive mainly due to all the compassionate people who value my skill set over giving their transportation dollar to a mega corporation. But my boss, James Ball, the owner of Pipeline Cab and the hardest working man in the local industry, now has to stress on whether his business, which he has taken 10 years to build, is going to survive. He puts in an 18-hour workday each and every day of the week and still keeps a smile on his face. That’s just who he is.

It just makes me shake my head in disgust at the injustice of it all.



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