Taxi Times International - March 2015 - English

CHANGING TAXI TRADE
CHANGING TAXI TRADE
like to save on that, even though they had
to act to get better insurance when forced
by public policy. They could easily have
commercial car insurance on each vehicle
in their system, but then they would lose
their most significant cost advantage over
licensed taxis.”
Why is Uber making such an issue of
buying the right insurance?
“Insurance is a critically important cost factor.
Our industry is required to buy primary
commercial insurance. Each licensed
taxi driver, limo driver, UberBlack or Uber-
SUV-driver and in New York each livery
driver carries primary commercial insurance
that covers the vehicle 24 hours a day,
365 days a year. Our insurance is primary
and commercial and our auto liability
insurance will pay injured parties and will
meet the state’s financial standards for
insurance. Uber spent tremendous sums
on lobbyists to make sure they would not
have to buy the same type and level of
insurance. They may have spent more on
the lobbyists than on the actual insurance.
In the long term they are hoping to save
money. They’ve made a judgement and they
think it’s worthwhile. That’s the major reason
why they can charge less.”
Who pays up if the TNC’s insurance
doesn’t pay?
“There’s a high probability that many TNCclaims
are paid out of the private insurance.
Because drivers don’t tell their insurance
company they’re driving for a TNC. The
states where this is happening, are burdening
their citizens with higher insurance
premiums, because they are subsidising
Uber-claims. The insurance companies are
hoping to keep licensed commercial fleets
and create a new TNC-policy.”
WHAT’S HAPPENING?
You said you warned the international
industry. Was nobody listening?
»It’s insurance with
gaps. So many
gaps that 28 states
have already issued
warnings for
TNC-insurance.«
“We have many very intelligent members
all over the world, but when these illegal
operations first popped up their reaction
was like ours: ‘It won’t stand.’ The same
reaction as in the US market. ‘Regulations
are made for a reason.’ Especially when
they have to do with public safety. It is hard
to believe that when you have significant
investment capital, it allows you to provide
the same service as we do, but without
meeting the same public safety standards.
There are rules about insurance, vehicle
inspections and driver background checks.
Violating these rules means you cut costs.
And from a public safety point of view, cutting
corners is bad. There are many locations
where this happens. It gives lots of
advantages to the operator: it’s cheaper and
you hit the road faster with your product.”
Were regulators not concerned?
“It is fair to say that with rare exceptions
regulators are not sympathetic to TNC’s at
all. Regulators understand the nuances of
the industry and public safety. Politicians
don’t understand the industry, they don’t
deal with it. They are intrigued by the
TNC’s marketing, by what they call ridesharing.
The ‘sharing economy’ sounds
good – let’s give it a try. But why have we
had public safety requirements for the past
100 years?”
“Politicians lean on regulators. There’s
no question that a regulators’ instinct is to
enforce public safety. They don’t stop until
they’re told to stop. We are disappointed at
the lack of regulatory crackdown. Once you
meet with the regulator you understand
it’s not the regulator but the politicians
pulling the strings. Some regulators feel
passionately about this. It will come back
to haunt the politicians. In Boston recently,
there were three sexual assaults within a
month.”
Haven’t things changed? Uber has had
some pretty bad months.
“Yes, there is a definite backlash against
TNC’s. But we need to differentiate. Uber
is the leader. In the US, in most of the
world. Uber is most aggressive at violating
existing rules pushing past the regulator
and going for a political response. Uber is
an extremely aggressive firm that will not
accept statements of opposition of anyone
except courts. They will huff and they will
puff, but they will back down after court
action. The others in the US are very similar
but not as bold. But that may be a
financing issue. Uber’s got the money.”
What caused this backlash?
“It was mainly a PR-backlash. December
2014 was collectively the worst month for
TNC’s. Several different things: Uber’s
arrogant statements over the checking of
reporter-backgrounds and numerous high
profile sexual assaults – a polite way of
saying rapes – worldwide. Attacking the
media was a very bad idea. Before, the
media were not looking – shame on them!
Now they are more willing to listen to the
stories of others. As Uber grew, there were
more problems. Are they perhaps violating
the law?”
Did Europe play a clear role?
“Yes, what also helped was that several
European nations took legal action. The
media took a stronger look and found flaws.
There is a lot the media can report on. Particularly
if things are not as Uber portrays
them. What happens now? Uber’s had two
PHOTO: Wim Faber
bad months and they’re rebounding. They
invited journalists to cocktails, beefed up
staff with seasoned professionals who
could help them find a way out of this. My
message: obey the law as the TNCs do in
New York. Fingerprint drivers, let the public
authorities inspect your vehicles, and
pay the same taxes and fees as other operators.
They can operate within the law in
New York. So why can’t they follow the law
in all other cities? The new people they’re
bringing into Uber should convince the
CEO and others that obeying the law is not
such a bad idea.”
Were you envious of those European
countries?
“Yes, I was envious of the rest of the world.
It made me disappointed in our own politicians
and judicial process. Uber has the
right to change the law, to work within the
rules. But to operate with the thinly veiled
excuse that ‘we are different, the rules
don’t apply to us.’ We take heart that other
countries respect their laws and apply
them. We hope that our politicians learn
from that.”
“It’s also a slippery slope. Uber urged
drivers to provide unlicensed taxi service
for several years and now, in the few communities
where they have convince the
politicians to make UberX legal, Uber now
tells those same drivers that they cannot
pick up on the street. Uber doesn’t want
them to pick up off-app on the street,
because Uber won’t get its 20% fee. Isn’t it
surprising that drivers will still create
ranks? And try to get work on the streets
illegally – without the app? Here the TNCs
have created a problem for themselves and
it will not easily be remedied.”
Are there Uber-ranks?
“Absolutely! Uber drivers sit outside the
major restaurants and entertainment centres
in Washington DC. ‘Do you want a
ride, sir?’ It’s a standard practice with
many UberX drivers. Difficult to stamp out.
ALFRED LAGASSE
Al LaGasse, (60) CEO of the Taxicab Limousine & Paratransit Association
(TLPA) in Rockville, Maryland (USA), joined the organisation in 1978 with
a degree in Business Administration from the George Mason University.
LaGasse is probably the longest serving CEO of any taxi association. His
political and management skills and in-depth knowledge of the US industry
made TLPA the leading authority in the US taxi, limousine and paratransit
sector and him the long-time favourite of TLPA’s membership.
Uber is also limiting their liability. Uber
admits that when you’re not going through
the app you’re not insured in any way.”
What would you recommend operators
do?
“It’s difficult but very important to objectively
examine your own services. Make
sure you deliver the service the public
needs. Look at your own technology. Major
firms all have apps of which the quality is
good. The message about enforcing the law
hasn’t worked well in the US. Now our message
is mainly a public safety message. You
also need position papers that explain our
industry in simple and direct terms. The
media doesn’t understand the industry and
the issues. Neither do politicians.”
“The more consensus you build within
the industry, the better. In every city they
go into the TNC’s have a plan. We are not
one company. Every city has different
requirements. We don’t have a cookie
cutter response to their cookie cutter
12 TAXI MARCH / 2015
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