Miami-Dade escalates penalties against renegade Lyft drivers

06/06/2014 12:01 PM

06/06/2014 11:09 PM

On his maiden voyage as a driver for Lyft, the renegade car service, Juan Arango picked up a fare at the Ramada Plaza Marco Polo Resort in Sunny Isles Beach.

Moments after dropping the passenger off at the Ritz-Carlton Key Biscayne on Wednesday, Arango turned onto Crandon Boulevard — and got stopped by Miami-Dade County cops.

The passenger was not just a fare — he was an undercover Miami-Dade County code enforcement officer, and the ride was a sting. Arango’s white Toyota Corolla, which hadn’t even been sporting Lyft’s signature hot-pink mustache on the hood, was towed away on the spot.

Five minutes later, the police pulled over another Lyft driver on the same street. Stanley Scott, 31, had just let off a pair of passengers — more county cloak-and-dagger operatives — at the Ritz. Scott’s black Honda Insight got towed away too.

Both drivers told the Miami Herald they didn’t know the county considers their business illegal.

“I trusted that if the service was working in Miami, it was allowed,” Arango said Friday.

It’s not. And the county, under pressure from existing taxicab and limousine owners, has escalated its enforcement of the defiant car-service industry, joining forces with the Miami-Dade Police Department to catch scofflaw drivers.

Between Wednesday and Thursday, Miami-Dade impounded three automobiles belonging to drivers for Lyft, which two weeks ago began offering rides via a smartphone application. A competing company, UberX, launched its similar service this week, though as of Friday it had yet to be cited by regulators.

The county had been fining Lyft drivers up to $2,000 each for failing to get a chauffeur registration and for operating a for-hire vehicle without a valid for-hire license — both requirements for cabbies and limo operators. Impounding Lyft drivers’ vehicles represents a significant step toward more serious penalties allowed — but not required — under the county’s legal code.

Lyft, based in San Francisco, has covered the drivers’ fines and expenses — all three drivers got their cars back from the pound — and paid for a Coral Gables attorney, Hilton Napoleon, to represent them when they appeal the citations. Uber has pledged to do the same if its drivers are targeted.

Napoleon says Lyft disagrees with the county’s designation of the new companies as for-hire services on the same order as taxis or limousines. Most drivers work part-time, using their own vehicles, without flat or metered rates. Lyft and Uber provide the technology to bring passengers and drivers together through smartphone apps, but don’t hire drivers or own a fleet of cars.

“For me, it’s like trying to compare apples and oranges,” Napoleon said. “It’s a situation where technology has kind of outpaced legislation, and we don’t believe the legislation that’s in place covers this particular issue.”

The two companies, which operate legally in dozens of cities, have the wherewithal to deal with local government penalties. Uber, also based in San Francisco, announced Friday that it has raised $1.2 billion from investors, putting the total value of the company at about $17 billion. A recent valuation of Lyft put the company’s worth at $700 million.

The firms are trying to put enough pressure on politicians to rewrite the law, by offering eager consumers a service they won’t want to give up. Critics counter that they’re trying to exist above the law, putting passengers at risk through unregulated operations.

“We truly believe that if we approach situations like this positively and collaboratively, we can work together with local officials to greatly improve transportation access, safety and affordability,” Lyft spokeswoman Paige Thelen said in an email.

County Mayor Carlos Gimenez backed legislation last year to overhaul the county’s rules, which protect the powerful taxi industry by prohibiting open competition. But the reforms stalled at a county commission transportation committee, and Gimenez says his Regulatory and Economic Resources Department must enforce the existing law.

On Monday, Gimenez sent a local Lyft lobbyist, Jorge Luis Lopez, a letter noting that the county code “authorizes police officers and RER enforcement staff to seize and impound any motor vehicle if there is probable cause to believe that it is being used to provide for-hire services without the required for-hire license.”

On Friday, Lopez called the county’s move to impound cars “aggressive.” But Lyft still met with administrators Friday to propose changes to county rules.

“When you look at the county code, it was really developed in the ’80s, so it’s 30-plus years old,” Lopez said.

The four-member transportation committee, however, may not budge. Two of its members have scheduled discussions about Lyft and UberX for Wednesday — and apparently not to talk about accommodating the firms.

Commissioner Bruno Barreiro, the committee’s vice-chairman, said Friday that he wants to talk about what other legal recourse the county might pursue against the companies.

The companies “are aiding and abetting the drivers,” he said. “Obviously, I’m interested in full enforcement and to see if we can allocate more resources to enforcement.”

“Are these companies willing to just cover all these expenses and legal protections for all these drivers?” he added. “There has to be a finite amount of resources that they have.”

Barreiro said he has been contacted by taxicab companies fuming over what they consider unfair competition from Lyft and UberX circumventing county regulations.

Super Shuttle, a company that provides ground transportation from Miami International Airport, sent a letter to Gimenez on Friday noting that the company won a competitive bid to operate at MIA. The firm’s president and chief executive, Ray Gonzalez, said he also operates other transportation companies and pays “hundreds of thousands of dollars annually” to the county in permitting, applications, inspections and fees.

“It is frankly shameful that after failing to persuade Commissioners in the legislative process to succumb to their unreasonable demands of a total deregulation of the industry, that the Commission has carefully developed over time, that out-of-town vendors are essentially ‘flipping-off’ the County, and saying, ‘we will operate our way regardless of what your Code says!’” the letter reads.

County emails obtained by Lopez, Lyft’s lobbyist, show that the heads of taxicab and limousine groups gave Miami-Dade regulators a heads-up that Lyft was launching — and noted that similar tactics had been penalized elsewhere.

In response to a forwarded invitation to Lyft’s launch soiree, an administrator in the regulatory department responded, “Let’s crash the party.”

But not all the drivers are deterred by the penalties.

Doug Pursley, whose white Ford Explorer pickup was impounded Thursday at Mall of the Americas after taking an undercover code-enforcement officer there from the downtown Hilton, said he is back on the road taking passengers.

A 49-year-old business development consultant, Pursley said he supports technological innovation and, as a former San Francisco resident, knew that Lyft has rankled regulators elsewhere.

“The extra money doesn’t hurt, and meeting people — the social aspect — is awesome, because it’s super interesting people,” he said.

What bothered him, he added, was that code enforcement and police officers would go out of their way to take a $40 ride and spend an hour fining him and impounding his car.

“Where are the taxpayer resources going?” he said. “As a taxpayer, I’m going, ‘Thanks a lot, guys.’”

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