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Uber, Lyft should operate here, most say

Nine out of 10 respondents to this week’s RBJ Daily Report Snap Poll say Albany should enact legislation to allow Uber and Lyft to operate in Upstate New York.

People can book rides with Uber and Lyft in dozens of cities nationwide, but not in Upstate New York because of a state law that creates a barrier for the ride-sharing services outside of New York City.

In 2014, Lyft tried to launch operations in Rochester and Buffalo, but shut down after state Attorney General Eric Schneiderman sued the company, alleging it violated the law by failing to require its drivers to hold commercial licenses, obtain adequate insurance, or comply with local for-hire licensing rules. This summer Lyft settled with the attorney general’s office, agreeing to pay $300,000 in penalties.

Legislation has been introduced in Albany to amend New York’s insurance law to allow ride-sharing services—also known as transportation network companies—to set up shop. They still would need to reach agreements with local governments or taxi commissions.

Meanwhile, Uber also is fighting on another front: A federal judge in California has granted class-action status to a lawsuit claiming the firm misclassifies its drivers as independent contract workers and should be forced to treat them as employees entitled to health insurance, workers’ compensation and reimbursed work expenses. Those following the case say it could have broad implications for other startups in the “sharing economy.”

More than three-quarters of Snap Poll respondents say drivers for ride-sharing services should be classified as independent contractors rather than employees.

In New York City, Mayor Bill de Blasio tried to cap Uber’s growth, but the number of Uber drivers in the city has almost doubled in the past year, growing to nearly 20,000.

Roughly 650 readers participated in this week’s poll, conducted Oct. 5 and 6.

Should Albany enact legislation to allow Uber and Lyft to operate in Upstate New York?
Yes: 90%
No: 10%

In your view, how should drivers for ride-sharing services be classified?
Independent contractors: 77%
Employees: 23%

The war on Uber and Lyft by the taxi/limousine industry is just one of many examples of ossified, entrenched businesses seeking government protection of their politically bestowed monopolies and/or failing business models. Let traditional taxi services adapt to customer and market needs, not the other way around. Imagine where we would be as a society if federal or state government had protected buggy makers and horse breeders to stymie Henry Ford and other entrepreneurs’ disruption of the horse and buggy industry. Uber and Lyft prove yet again that 95 percent of our problems (including the high cost of education and health care) can be solved by market-driven solutions combined with an appropriately limited role for government.
—Michael Caceci, Pittsford

The shared economy is here to stay. The workers choose their hours and whether to accept business, so they should be independent contractors.
—Larry Rabinowitz

Who does the background check? Who makes sure their cars are safe? There is a lot of risk to the passenger and to the driver. New York State has inspection rules for using a vehicle commercially to transport people. There is a lot involved in using your vehicle commercially for transporting people: a lot of liability, and expense of vehicle maintenance. When you get into a cab, the passenger takes these things for granted. The drivers for Uber and Lyft don’t realize that they are completely liable financially if something goes wrong. These companies are shifting this responsibility to these drivers by making them “independent contractors.” I bet not one of these drivers realizes any of this because they are only thinking of making a few bucks. The companies in turn are preying on this (naiveté). A tragedy waiting to happen.
—Jennifer Apetz, Ferrel’s Garage Inc.

I have many pleasant experiences using Uber in other cities. Having spoken with the Uber drivers, they liked the freedom of being a contractor running their own business. In this way, they have the incentive to earn positive comments. Good for the customers and for Uber.
—Patrick Ho, Rochester Optical

New York government cannot resist the opportunity to regulate everything into the ground. Just let them operate in a free market way—for once—and see what happens. Who knows? They just might create jobs and efficiency at a low cost—what a concept! Anyone who has taken a taxi in Rochester knows the outrageous cost, which is why no one takes a taxi unless there is absolutely no alternative. If Uber or Lyft can create options for consumers, can New York government please, please get out of the way?
—Bob Sarbane

I think Uber and Lyft are a great way to reduce the incidence of drunk driving and to support city revitalization. I am fully supportive of it!
—Ann Brennan

I lived in Chicago for the last three years, where Uber is an important part of the transportation scheme. I used it often. It’s a great addition for the consumer’s choice, but the playing field has to be level, and it’s not. It is very debatable whether Uber drivers are true independent contractors, and Uber has not established a defensible rationale why they should not be subject to the same safety and registration rules as taxis and subject to the same costs that taxis have to absorb. If the rules are not necessary for Uber, then that establishes a pretty good argument that they are unnecessary regulation and should be eliminated for taxis, as well. The reality is, I think that some of the rules and oversight for taxis are probably a good thing, and I can’t think of a reason that Uber shouldn’t be subject to the same. In a city like Rochester, where cars-for-hire are a small part of the transportation scheme, these are probably not critical questions, but in cities like Chicago, you can’t survive without a robust car-for-hire industry. I am not sure an Uber system can provide the entire market in those cities, and I am fearful what will occur if the taxi industry is decimated. Let’s see a level playing field so the competition is fair and then let the market decide.
—John Hart, Pittsford

We have enough crime in this area as it is—every place I’ve seen these services enter there have been multiple reports of assaults and robberies. Why add to an existing problem? We have a decent system as it is—no need for either of these companies to create opportunities for driver-on-passenger crime.
—Scott Ireland

This is capitalism and free enterprise at its finest! What better way is there for consumers to vote “no” on the present monopolistic system of taxi service than to flock to Uber and Lyft in droves. Once you try it, you’ll never go back.
—Dorver Kendig, Webster

I believe in fair competition. If Uber and Lyft want to operate, they need to follow the same rules that taxi companies do. Unfortunately, New York has some strict laws for taxi drivers and operators that are costly to follow.
—Joel Stauring, Cunningham, Stauring & Associates Inc.

Commercial laws and governance must evolve as new kinds of goods and services come to the market; these sorts of “ride-sharing” services should be legal. I see no reason for drivers to be required to hold commercial licenses, but it’s necessary that such companies do background checks on its drivers and make sure they have valid licenses and adequate insurance. The taxicab industry must adapt or die. It should be a simple matter to set a reasonable bar of activity below which drivers would be treated as independent contract workers and above would qualify as employees.
—David Lamb, Rochester

Who is the government trying to protect? What is their purpose or agenda in keeping ride-sharing out of Upstate New York? Taxes—didn’t we fight a war once to be free of unreasonable taxation? Once again, I shall put the idea out there: In today’s age of instant information exchange, why don’t we put it to a vote? November is right around the corner. Put it on the ballot. Let the people decide. Stop big government now. What states are in the article? California and New York. What do they have in common? Highest taxes and big government.
—Mark Williams

The government needs to stop controlling everything. They should stick to what they do poorly and leave it at that!
—Mike Masters

Competition is what makes free enterprise work and it drives quality and service to higher levels. It’s good for everyone in the long run. Those who might lose some business initially must understand that what really drives profit is customer loyalty. Loyalty is achieved by providing a great customer experience and fair pricing (not lowest) and constantly improving what you offer.
—Bill Cox, CEO Marktec Products Inc.

This wording of this question reflects a major problem with New York. Laws should not be written to allow activities. We have too many laws in this nanny state as it stands.
—B. Diehl, Victor

Let’s hope our state government gets behind this action. There is obviously a market out there. Let the entrepreneurs have at it.
—Bob Worden, Penn Yan

Uber and Lyft are great examples of creative destruction at work. Smartphone apps and the Internet reduce the “friction cost” of doing business. It’s to everyone’s advantage to benefit from the efficiency that is created. The challenge is finding the right regulatory balance so as not to stifle innovation and the disruption that is native to the free enterprise system. Plaintiffs’ lawyers and politicians continue to try to reinforce the fraying social contracts of the last century. We would be better served if we endeavored to place this new reality at the center of our values. After all, market forces are unstoppable. It’s not the consumers or the Uber drivers really being hurt by this new paradigm; it’s the entrenched interests of taxi companies, unions and regulators who have the most to fear.
—John Calia, Fairport

I am all for different ways on how to grow the economy, but I do feel these companies need to require its drivers to hold commercial licenses, obtain adequate insurance, and work with local for-hire licensing rules. However, this might be a good time to look at local for-hire rules and get more competition in the city. Getting a taxi and a fair rate in Rochester and Buffalo is a challenge. I live about 5 to 7 miles from the airport and it costs at least $25 to $30 for a taxi ride.
—Keith Newcomer

Used Uber extensively in Chicago and the service was great, as well as cheaper!
—Frank Gerham

The fastest-growing parts of our economy are in unregulated segments, especially new ones that the politicians and bureaucrats didn’t see coming. The Internet has been so successful because the government didn’t regulate it. Now they are. What would we do without Obama to protect us? Now some politicians want to protect (us) from Uber and Lyft. I guess, like children, we cannot make good choices. Why the very thought of an unregulated part of our lives is too awful to contemplate! This Thanksgiving give thanks for those who know best how to run your life—politicians and regulators.
—Dennis Ditch

We need something in Rochester. Mass transit is not working well. It works great in other cities; why not here? Small business owners need to keep our costs down.
—Kim Pandina, Panda Wear Jewelry designer and owner

As long as they are not set up as LDCs.
—Jerry McCabe

Competitive excellence. A free market will benefit the most citizens.
—Clifford Jacobson M.D.

Properly licensed and identified drivers using Internet-based sharing is fine. In fact, it is merely evolutionary and certainly not revolutionary. Taxi operators could work both sides of the street if they chose to do so. Licensure and publicly available quality ratings like eBay sellers have should eliminate the safety concerns. This is evolutionary, not revolutionary.
—Wayne Donner, Rush

This is really a no-brainer! Is Upstate New York not part of “N.Y.,” as is NYC? If independent contractors are agreeable to work as independent contractors, what makes still ANOTHER law passed a superior decision?
—J.A. DePaolis, Penfield

Why should we allow monopolies to exist—whether they be city/local governments or taxi commissions appointed by same? The cost of a taxi in Rochester and at the airport is ridiculous. You can almost rent a car to drive home cheaper than a taxi fare from the airport. A little ray of sunlight on the monopoly would be welcome. Whether or not drivers would be employees or independent contractors would depend on the specifics of the drivers’ agreements with the service with regard to maintenance of the vehicle, revenue sharing, benefits, etc. Without any details, how can you answer the question? We have plenty of laws and statutes about what constitutes an employee or independent contractor.
—Keith B. Robinson, Diamond Packaging

The biggest example, by far, of a regressive tax is when the government prevents its citizens from choosing to do business with a concern that has better prices and/or better service than another concern that it is protecting. Let the marketplace decide which company it chooses—no matter what the service or product or seller.
—Jay Birnbaum

Absolutely allow these companies to do business here. I have been using Uber for three years in other cities without a problem. Why is it that New York is a late adopter of viable businesses to set up shop? It gives those another why people leave this state.
—Pete Deckman

10/9/15 (c) 2015 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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