The Buffalo Common Council has a Taxicab Committee and the City Code has 12 pages devoted to the regulation of taxicabs. The City Council actually decides and must approve taxicab rates. In addition to approving rates, the Council controls how many taxicab licenses can be issued by limiting the number of taxicabs to 300 in the City of Buffalo. According to the City Code, years ago after months of discussions, public hearings and investigation it was concluded that the operation of taxicabs “must be regulated to protect the interests of the public”. The City Code has regulations limiting how much you can charge as a taxi driver and how old of a vehicle you can drive.
The issue of the need to protect the public is being raised regarding a company called Lyft. Started in San Francisco a few years ago, Lyft is a private company operating in 60 cities that allows people through a mobile phone app in need of a ride to connect with drivers. Getting a ride through Lyft generally costs about 30% less than a taxi. Lyft has 100,000 registered users that rave about the service they receive. Drivers for Lyft are independent contractors, many of whom work part-time. To become a Lyft driver the company claims that individuals must undergo a background check. Insurance is required and Lyft provides supplemental insurance to drivers for additional protection.
As stated on Wkipedia, Lyft works as follows:
To request a Lyft car, riders must download the Lyft app to their iPhone or Android-based phone, sign in through Facebook Connect, and enter a valid phone number and credit card details. When a passenger wants a ride, he or she opens the app and sees a map displaying the locations of the nearest Lyft drivers. After tapping to request a ride, the app shows the driver’s name, his or her rating by past passengers, and photos of the driver and their car. Next, the Lyft driver will arrive and likely greet the passenger with a welcoming fistbump. After the ride is complete, payment is made through the app. The requested payment includes a pickup fee and a ride fee based on time and distance. The cost per mile and cost per minute vary by city, with a $5 minimum and a $5 cancellation fee. The passenger can increase or decrease the dollar amount by tapping a virtual pencil to edit the donation. The company takes a 20% cut of the fare. Finally, a passenger must rate the driver before he or she can request another Lyft. Drivers also rate passengers to help prevent abusive or unruly passengers, which increases driver safety.
Existing Taxicab companies do not like Lyft and their lower priced service. City Councilmember Joseph Golombek chair of the Council’s Taxicab Committee has requested that the City Law Department send a “cease and desist” letter to Lyft and two other companies, banning them from operating in the City of Buffalo until they comply with state and local “driver for hire” laws and insurance requirements. Taxi owners and city officials have expressed concern that citizens are at risk by accepting rides through Lyft. Other cities such as St. Louis and Kansas City are also seeking to stop Lyft from operating. Missouri Lt. Governor Peter Kinder wrote an interesting op-ed piece in support of Lyft and providing people the freedom to choose whatever service they desire.
Indianapolis a few years ago deregulated the operation of Taxicabs and saw 32 new companies emerge within the first six months after deregulation, 75% of which were owned by minorities and women. Wait time was cut in half and rates were lowered when Indianapolis stopped limiting the number of taxi licenses. Minneapolis removed the limit to their taxi licenses and won a court fight that was filed by taxicab companies seeking to keep the limit in place. A number of new entrepreneurs have surfaced since Minneapolis opened up their taxicab market.
All of which raises these questions:
– Should city government be involved with regulating the number of taxis that can operate in the city?
– Should city government be deciding taxi rates?
– Should taxis be regulated at all?
– What do you think about Lyft and how should city officials address their operation?