In the showdown between the taxicab industry and upstart car services, there are no Davids — just Goliaths.
Burgeoning ride-for-hire companies led by Uber, whose worth has been estimated at $17 billion, have the deeper pockets. But established taxicab owners, with their decades-long foothold in the community, have a stronger grip on local politics.
And not just in Miami-Dade County.
Government regulators across the country and in Europe are struggling with how to control the digital-dispatch services that have upended the transportation business. Massive cab protests in Paris, Madrid and Berlin two weeks ago paralyzed traffic.
But some places have found a way for the competing giants to coexist. And therein may lie lessons for Miami-Dade.
The companies, which don’t hire chauffeurs or own vehicles, allow users to summon rides from freelance drivers using smartphone applications. They say that exempts them from taxicab and limousine rules.
“We fit somewhere in between,” Veronica Juarez, Lyft’s director of government relations, recently told the Miami Herald’s editorial board. “These regulations simply do not address this model.”
Miami-Dade has treated the companies as unlicensed taxi services — and it’s hardly the only government to do so. Tampa’s Hillsborough County and Austin, Texas, have recently fined Uber and Lyft drivers. Other cities, including Las Vegas and New Orleans, have laws on the books that have kept out ride-for-hire companies.
In some cases, state regulators have also cracked down. Virginia and New Mexico have issued cease-and-desist letters to Lyft or Uber or both. Pennsylvania has threatened to do the same.
But trying to hold off technology may not be a successful long-term strategy, said local web entrepreneur Brian Breslin, who said he has taken UberX in Miami. More tech-based businesses are emerging in the “sharing economy,” such as Airbnb, a vacation rental website that matches people with couches and spare bedrooms to travelers.
“It’s going to be tough for them to basically run them completely out of town,” said Breslin, the co-director of Refresh Miami, a large technology networking organization.
And politicians shouldn’t want to do so, he added, if they really want South Florida to be a nurturing home for tech ventures. “It won’t help the cause,” Breslin said.
Still, taxicab and limos are playing defense. A national association has launched a campaign — dubbed “Who’s Driving You?” — that portrays ride-for-hire start-ups as a public safety risk because their drivers are not necessarily government-licensed.
Miami-Dade taxi owners say the technology will steal affluent passengers and leave cabbies, who must serve anyone, with the scraps. Taxis are also prohibited from raising their fares, unlike Uber’s so-called “surge” pricing during peak times.
“They’re like carpetbaggers,” Diego Feliciano of the South Florida Taxicab Association told the Herald editorial board last week. “They’re coming in to do a job that’s already done.”
Even in places that have allowed Lyft and Uber to operate freely, some politicians want at least some restrictions. North Carolina lawmakers last year prohibited cities from regulating ride-for-hire companies, but some cities have argued they should maintain some degree of local authority.
Uber lobbied Florida lawmakers this year for a similar bill in Tallahassee. But it went nowhere, leaving the company to deal with counties.
Administrators for Miami-Dade Mayor Carlos Gimenez, a tech supporter, are brainstorming on how to rewrite the county code to reach some sort of compromise.
At issue are several key questions: Would Uber and Lyft fall under a separate category of regulation? Who would be responsible for inspecting automobiles and checking drivers’ criminal backgrounds? Should there be a limit to how many drivers are on the road? Would they be allowed to make trips to the airport and seaport?
For ideas, Miami-Dade is looking elsewhere.
California — home to the San Francisco-based Lyft and Uber — became the first state to regulate the services last fall. California’s Public Utility Commission created a new regulatory category —“transportation network companies,” or TNCs — to include Lyft, Uber and its competitors.
The rules require that companies perform background checks, inspect vehicles and provide $1 million in commercial liability insurance for accidents. Lyft has suggested similar legislation for Miami-Dade.
But California’s law is not perfect.
Utility regulators have proposed clarifying that the insurance should apply even when a driver has turned on the smartphone app but has yet to pick up a passenger. That stems from a tragic incident in which a San Francisco Uber driver who was logged into the app but not carrying a passenger struck and killed a 6-year-old girl.
California legislators have said they may increase the insurance requirement and establish vehicle standards. The commission has also suggested TNCs should offer primary insurance coverage, rather than first relying on drivers’ personal policies.
Despite its possible shortcomings, California’s law has become a model. Colorado lawmakers adopted similar TNC rules this month.
Cities have adopted a patchwork of regulations and policies. Last fall, Jacksonville became the first Florida municipality to allow Uber after it eliminated minimum charges and pre-arrangement requirements for luxury-car rides.
In Chicago, the city council has allowed the car services to operate, though with some restrictions. Last month, the council agreed to require drivers on the road more than 20 hours a week to apply for chauffeur’s licenses. They also will have to pass background checks and drug tests administered in conjunction with City Hall.
Detroit entered into a two-year agreement with Lyft last month allowing the company to operate as long as drivers pass background checks and have additional auto insurance.
In New York, Uber’s signature luxury-car service, UberBlack, has operated since 2011. The company tried but failed to partner with taxi drivers in 2012. The city later created a pilot program allowing e-hailing applications for cabs.
Miami-Dade taxi owners point to the cab-hailing service — known as UberT in New York — as a potential local model.
“We want them in our vehicles,” Orlie Jedwab of Miami Springs Taxi, told the editorial board.
It’s competition outside cabs that worries the industry most. Miami-Dade has a fixed number of taxi medallions — 2,121 — each worth more than $300,000. The permits are considered property rights that can be used as collateral for loans.
Other cities where Uber and Lyft operate have medallions too, including New York, and their values haven’t plummeted. But local taxi interests argue that it’s different for bigger cities with a larger taxi demand. Miami-Dade saw its medallion values dip when Uber was just being discussed.
“They can’t just make those things worthless,” said Sandy Bohrer, an attorney for the industry who also does work for the Miami Herald. “You have to pay compensation for that.”
Some cities haven’t approved ride-for-hire firms outright, but they also haven’t penalized them. Uber has operated without formal permission in Boston since 2011, though the mayor has recently pledged a regulatory review after a spate of cab protests.
Cap on drivers
A couple of Miami-Dade commissioners floated the idea last November to cap the number of drivers Uber could have at any given time. But they couldn’t agree on what the number should be.
In March, the Seattle City Council approved caps of 150 drivers per company at any given time. But the companies began campaigning for a public referendum to overturn the limit, and last week the mayor proposed lifting the cap. In exchange, 200 taxi permits would be issued over four years, and all permits would become medallions, which are more valuable.
Uber tried to break into Miami by pushing for major deregulation that would have eliminated the county’s minimum fares for luxury-car rides, the cap on the number of luxury-car permits — set at 626 — and the requirement that non-taxi rides be pre-arranged at least an hour in advance. That legislation stalled in a transportation committee, though the full commission did agree to lower the pre-arrangement time to 15 minutes.
Lyft didn’t lobby for any legislation before setting up shop in Miami-Dade. It launched its service last month — prompting UberX to follow suit two weeks later — and then sat down with county regulators to discuss possible reforms.
Meantime, a county commissioner has filed legislation to beef up Miami-Dade’s enforcement authority over the renegade car services.
Last week, the commission gave preliminary approval to legislation that would spell out that any “for-hire vehicle” — including those receiving “donations,” as Lyft terms its payments — are considered taxicabs.
The proposal is scheduled for a public hearing in July — in the same transportation committee that stopped Uber.