Lyft

Broken bodies, broken lives

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Motorists driving for rideshare companies have struck and also killed pedestrians in San Francisco, even since state regulations were adopted to make these new transportation businesses safer and more accountable to the public.

Four months after the new rules were created, lawsuits from these incidents reveal that the new regulations contain gaping holes that continue to place passengers, pedestrians, and even drivers at risk.

One recent local story actually started in 2004 in Florida’s Monroe County. A vehicle sped down the Overseas highway at over 100mph. Ever seen the movie The Fast and the Furious? It was like that.

In the Florida heat, the car blazed by palm trees and an ocean view, hell bent for Miami. It accelerated as it took a curve, swerving around two vehicles going half its speed. Brazenly passing a traffic control device, the car cut off one more vehicle, then another, and another. Still barreling over 100mph, the driver swerved across the double yellow lines, forcing an oncoming vehicle to veer off the highway.

A traffic snarl put an end to the thrill ride. According to the Monroe County Sheriff’s Office incident report, which the Guardian obtained through a records request, driver Syed Muzzafar was accompanied by his wife and three children during his death-defying drive. He told the police officer, “This was just a dumb thing to do. I know I’m wrong.”

Muzzafar was booked for reckless driving. Nine years later, he would be booked again in San Francisco for hitting a family as they crossed the street in the Tenderloin.

On New Year’s Eve 2013, picking up fares for the tech company Uber, Muzzafar’s car struck young Sofia Liu, her mother, Huan Kuang, and brother, Anthony Liu. Six-year-old Sofia did not survive. Her family filed a wrongful death suit against Uber on Jan. 27, and will be represented by attorney Christopher Dolan.

Uber is part of an emerging cast of companies commonly known as rideshares, now legally called Transportation Network Companies (TNCs). The gist of how they operate is this: the company’s mobile app connects a driver with a customer, much like a taxi dispatch. Only a few years old, the TNCs initially operated in a wild west, devoid of regulation. But the California Public Utilities Commission passed rules for TNCs in September with the aim of protecting pedestrians, passengers, and drivers in collisions.

Uber, formed in 2009, has drivers in over 50 cities worldwide and an estimated worth of just over $3 billion, according to leaked evaluations. But Uber may still be in need of a version 2.0.

The death of the young Sofia Liu, killed by a driver already arrested for reckless driving, shows the state still has a long way to go on the road to regulating rideshares.

 

NOT MY PROBLEM

The night Muzzafar struck the Liu family, he was ferrying customers using the Uber app — but the company disavowed responsibility for the incident.

“We thank law enforcement for the quick release of information,” Uber wrote in a blog post the day after Sofia Liu died. “We can confirm that the driver in question was a partner of Uber and that we have deactivated his Uber account. The driver was not providing services on the Uber system during the time of the accident.”

But that’s a half-truth: Muzzafar was picking up passengers for Uber all night, but because he’d just dropped off a customer, he allegedly ceased being an Uber driver. With no passengers in the vehicle, Uber did not consider him “on the Uber system.”

If that sounds like a giant loophole, you’d be right — but it’s a legal one, for now.

The new CPUC regulations specify that TNCs must only provide liability insurance when drivers are “in service.” The Taxicab Paratransit Association of California is suing to modify those rules, saying the meaning of “in service” was never defined — and they allege this wording allows companies to disavow responsibility for a driver not carrying passengers at the moment of an accident.

This gaping loophole can also lead to insurance and liability consequences.

“I would guess that’s on the order of a $20 million liability case,” Christiane Hayashi, director of Taxi services at the San Francisco Municipal Transit Agency, said of Liu’s death. “The question is, who is going to pay for it?”

Muzzafar, and not Uber, may be on the fiscal hook, even though it’s unlikely he could cover the family’s medical and legal fees on his own.

Though much reporting has focused on TNC drivers’ lack of insurance, the collision that killed Sofia Liu on New Year’s Eve raises other questions as well. Just how did a driver with a reckless driving record manage to become a partner with Uber in the first place?

Checking out drivers

The recently drafted CPUC regulations require the TNCs to carry out background checks, a key element for safety. As it turns out, not all background checks are made equal.

Uber hired a private company called Hirease to conduct its checks, the Guardian learned in emails obtained from drivers. While Hirease requires Uber drivers to fill out a form with their personal information, taxi drivers who must register with the city’s transportation agency are screened with fingerprinting, Hayashi from the SFMTA told us.

The fingerprint checks make use of the FBI’s national criminal database, something a company like Hirease lacks access to (since it isn’t a government agency). We called the FBI’s background check department, based in West Virginia, to better understand the two methods.

We spoke to a rank and file employee, not a spokesperson, so he declined to give his name. The FBI employee spoke with a twang, and clearly laid out the problems.

The first snag with private background checks are false positives from common names (like John Smith) or stolen identities, he said.

Self-identification is also a problem. “If you’re a criminal, you’re not going to use your information,” the FBI employee said. “What if you were a lady and you were married six times, which name will you use for a background check? Bottom line, fingerprints are exclusive. Names are not.”

Another flaw is that while background checks performed for entities like the SFMTA make use of a federal database that dates back 100 years, California law doesn’t allow private background checks to go beyond seven years — and Muzzafar’s reckless driving arrest was nine years ago.

“Uber works with Hirease to conduct stringent background checks,” Uber spokesperson Andrew Noyes wrote to us via email. “This driver (Muzzafar) had a clean background check when he became an Uber partner.”

Hirease and Uber did what they legally could, but the summation of laws and regulations blinded Uber to Muzzafar’s background — and nothing in the new CPUC regulations would have prevented this. That may go a long way toward explaining how a man caught recklessly driving with his own family in the car in Florida was driving for Uber the night he allegedly struck and killed a child.

Importantly, California law does allow for a taxi driver to have one reckless driving incident, or one count of driving under the influence, on his or her record. But as Hayashi told us, stricter background checks make it easier for taxi companies to spot a red flag before making hiring decisions.

The relative insecurity of private background checks raises an unsettling question: How many others with reckless driving records or DUIs drive for TNC companies like Uber, Sidecar, and Lyft without the companies’ knowledge?

The results of a collision can be severe, as San Francisco’s tragic New Year’s eve incident demonstrates. But even those who survive are left with bills that Uber, allegedly, isn’t paying.

 

PAYING NO ONE

Last September, Jason Herrera and Nikolas Kolintzas summoned an Uber driver via smartphone, intending to hop from Valencia Street to the Marina district. Driver Bassim Elbatniji responded, and drove the pair down Octavia, where his Prius collided with a Camry.

Herrera suffered a concussion and was knocked unconscious. Kolintzas also suffered a concussion, and they both sustained injuries to their necks and backs, according to court documents.

But when the two sought financial assistance from Uber to cover their medical costs, Uber said it was the driver’s responsibility.

“As far as Uber’s concerned, their insurance isn’t providing any of this,” attorney Colleen Li told the Guardian. Li is representing Kolintzas and Herrera in their suit against Uber, which seeks damages to cover their medical bills, which reached “tens of thousands” of dollars, Li told us.

According to a policy published on Uber’s website, the company maintains a $1 million “per incident insurance policy applicable to ridesharing trips,” which is in keeping with requirements under the new CPUC regulations.

Nevertheless, Uber has not stepped up to cover damages in response to a lawsuit arising from a similar incident. Months ago, the Guardian reported on the case of an Uber driver who hit a fire hydrant, which flew through the air and struck Claire Fahrbach, a barista living in San Francisco (“Lawsuit over injury from airborne fire hydrant tests Uber’s insurance practices,” 8/8/13). She sustained lacerations to her body, a fracture in her lower leg, and multiple herniated discs, according to her lawsuit against Uber.

Her medical bills and injuries destroyed her dreams of living in San Francisco, and she moved home with her parents in North Carolina to recover. Her lawyer, Doug Atkinson, told us Uber still hasn’t paid for his client’s medical services.

“They’re still denying they have any liability for the driver,” he said. “They said they wouldn’t fight the CPUC ruling, but in our case they obviously are.”

But the hydrant also sprouted a geyser that flooded a nearby business, Rare Device, and the apartment building above it. “It was horrible. Our store flooded, we lost a bunch of inventory,” Rare Device’s owner, Giselle Gyalzen, told us.

Her insurance covered the damage, but she’s still trying to recover the deductible from Uber.

Uber directed the lawyers to its terms of service, which tell people up front that they won’t cover anything: “Uber under no circumstance accepts liability in connection with and/or arising from the transportation services provided by the Transportation Provider or any acts, action, behavior, conduct, and/or negligence on the part of the Transportation Provider.”

Meanwhile, the drivers also find themselves in a bind when it comes to obtaining insurance. Given the lack of clarity, state agencies have opted to alert TNC drivers that they’re going without a safety net.

On its website, the California Department of Insurance posted a notice warning, “TNCs are not required to have medical payments coverage, comprehensive, collision, uninsured/underinsured motorist coverage or other optional coverages.” It goes on to explain that TNCs’ liability policies aren’t required to cover bodily injury to the drivers, damages to the drivers’ cars, or damage and injuries caused by an uninsured or underinsured motorist.

And as the Guardian previously reported (“Driven to Take Risks,” 8/6/13), rideshare drivers don’t qualify for commercial insurance since their vehicles are registered as private automobiles, yet insurance companies won’t grant complete insurance coverage to TNC drivers since it’s considered an insufficient safeguard against risk.

Notably, limo drivers who also work for Uber (and get commercial insurance through those companies) don’t have this problem — just those using Uber or other rideshare apps as independent contractors. Taxi drivers are also eligible for commercial coverage.

Is there any way for an independent TNC driver to legally insure him/herself on the road? “Not that I’m aware of,” said Patrick Storm, a spokesperson for the Department of Insurance.

 

FIXING SAFETY

Paul Marron is an attorney for the Taxicab Paratransit Association of California, the group suing the CPUC to tighten up its regulations. In his view, a key test of the new CPUC regulations is whether they’re enforced — and with a bare bones staff, enforcement is likely to be anemic.

“The CPUC does not have the adequate resources to regulate (transportation) safety statewide,” he told us.

As a lawyer for taxi interests competing against rideshares, Marron obviously has skin in the game, so we looked at the numbers.

We compared the staff counts of the SFMTA, the CPUC, and for some perspective, the New York City Taxi Commission.

The SFMTA has 15 employees who oversee San Francisco’s 1,850 taxi cabs. That’s one staff person for every 123 cabs in the city. The NYC Taxi Commission’s staff of 569 oversees 94,500 taxis, town cars and similar liveries, according to their posted annual report. Though the numbers are greater than San Francisco, the ratio is similar: One staff person for every 166 vehicles.

Now for the CPUC. Though it is now tasked with overseeing “rideshare” TNC vehicles, the agency is also responsible for regulating limos and town cars statewide. Public documents obtained by the Guardian show it oversees 1,900 liveries in the Bay Area, and though there are no official numbers, there are an estimated 3,000 rideshare drivers in the city, according to data compiled by the San Francisco Cab Driver’s Association.

The CPUC has a staff of six based in San Francisco, responsible for overseeing an estimated 4,900 vehicles. That leaves the CPUC with one staffer for every 700 vehicles, a ratio wildly out of sync with other vehicle safety regulators.

Hayashi pleaded with the CPUC to allow cities to regulate rideshares on the local level, saying, “You don’t even have the resources to monitor this stuff.”

Sup. Eric Mar met repeatedly with the SFMTA over these concerns, and will hold a February hearing to get to the heart of the safety culture around San Francisco’s TNC rideshares.

CPUC spokesperson Christopher Chow defended its safety regulations and enforcement. “We can clarify or modify our TNC requirements, if needed, particularly the insurance requirements, as we see how the TNCs attempt to comply with the decision’s directives,” Chow wrote in an email. “If we believe there are any issues that should be addressed, we will take action.”

But as things stand, Claire Fahrbach, Giselle Gyalzen, Jason Herrera, Nikolas Kolintas and the family of Sofia Liu are all waiting for that action.

Reed Nelson contributed to this report.

 

Mayor Lee addresses Google bus controversy

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At a press conference on affordable housing today, the Guardian asked Mayor Ed Lee about San Francisco’s favorite pinata: tech buses. The monstrous private shuttles, which daily whisk tech workers away to Silicon Valley, currently use Muni bus stops without paying fines, like most private autos do. 

In Guardian News Editor Rebecca Bowe’s article in the print edition of the Bay Guardian this week, the San Francisco Municipal Transportation Agency spokesperson Paul Rose tells her that although there is a proposal in the works to regulate them, the SFMTA won’t profit a single dime from the plan. 

“We are developing these policies to better utilize the boarding zones for these shuttle providers,” Rose said. “What we’re trying to do is provide a more efficient transportation network.”

But everyone in San Francisco who has ever ridden Muni knows that it struggles to run on time, and chronic underfunding is a perennial Muni problem. It even hurts the city’s bottom line, depressing our economy by over $50 million a year, according a report from the city earlier this May.

The report also highlights the cost to overhaul Muni between now and the year 2020: over $167 million would be needed to overhaul the system.

So why not make a few bucks from tech companies using Muni stops, who, according to the city, cause Muni delays? 

We asked Mayor Ed Lee that very question at a press conference today. You can listen to his answer in the audio embedded below, or read the transcript for yourself. 

San Francisco Bay Guardian: “Housing is one aspect of this, but transportation is another. The MTA’s plan to deal with tech buses is cost neutral. Is that a missed opportunity to get additional funding for Muni?”

Mayor Ed Lee: “Not a missed opportunity. That’s the essence of that 2030 task force, transportation task force, that we put together where they send a report to me, I’m in a process of reviewing all aspects of that. 

Muni officials themselves were directly involved in producing that very comprehensive review along with our Planning Department and many in fact all of the departments here had implemented them.

Transportation is not just about Muni, it’s about all the modes of how people get around the city. You can’t forget that, because that’s a really big part of the task force’s work.

How to get people walking. How to get them bicycling safer and more. How to get cars less, and the cars that do, get them through where they have to go without stalling and congesting. 

How do you invest in Muni? In its assets, in its transportation, in all of its aspects. How do you work with taxis and all the other car-sharing and automobile sharing companies. It’s not just about taxis, by the way. I hear from my taxi friends as I walk around City Hall, they don’t want to be left behind so we want to bring them in to see the new exciting use of Uber carshare and Lyft… all of those modes have to be paid attention to at the highest level, including investing in the assets of Muni.

I want Muni to be the choice.”

Earlier in the press conference Lee voiced his opposition to all of the hatred pointed at tech companies. 

“People, stop blaming tech, tech companies,” he said. “They want to work on a solution. I think it’s unfortunate that some voices want to pit one economic sector they view as successful against the rest of our challenge. The reality is they’re only eight percent of our economy.” 

We tried to ask a follow up question, but at the end of his answer on Muni, the mayor’s spokesperson Christine Falvey told the Guardian “We’re going to go on a tour now, this is off topic.”

Shareable, smearable

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After writing critically about problems in the business models of so-called “shareable economy” companies in last week’s issue — including our cover story on Airbnb and other companies that facilitate short-term home rentals (“Into thin air“) and a story on the rideshare company Lyft (“Driven to take risks“) — the topic continued to dominate the sfbg.com Politics blog, with fresh posts and lots of reader comments:

AIRBNB PILE-ON

The excellent bilingual newspaper El Tecolote covered some of the same ground we did in its Aug. 1 cover story, “Unregulated Rental Business Takes Over Housing,” focused on how Airbnb is contributing to gentrification and displacement in the Mission District.

Reporter Jackson Ly found a couple that turned a rent-controlled apartment on 24th St. into a $249 per month de facto hotel room, booking it for 24 nights in August and making $5,976 in just one month, on top of the $3,069 they’re making in August renting out the guest room in the apartment where they actually live for $99 per night.

“It’s cheating the people that pay taxes,” Maria, who lives in the unit below this couple’s investment apartment and is tired of the rotating stream of tourists in her building, told the newspaper.

I got ahold of El Tecolote Managing Editor Iñaki Fdez. de Retana, who said that housing issues like this one are extremely important to the Latino community that lives in the Mission, and he’s been surprised that Mayor Ed Lee has been unwilling to address the impacts of Airbnb and other tech community contributors to the problem.

“It is very important,” he told us, noting that visiting European tourists are changing the character of the neighborhood. “In particular on 24th Street, which was once seen as the heart of the Mission, it’s changing overnight and [Airbnb and other housing rental websites] is a big part of that.” (Steven T. Jones)

 

UBER UGLY CRASH

Uber’s policy on insuring its drivers will soon be taken for a test drive, as the company that runs the mobile app-based ride requesting service and a driver were served with a court summons last week from a woman severely injured after a crash near a San Francisco intersection.

Those insurance policies were said to meet brand new regulatory requirements on rideshare services introduced by the California Public Utilities Commission on July 30, which was meant to solve the longtime regulatory battle between rideshare services and local governments.

The plaintiff in the suit, Claire Farhbach, was a bystander, not a customer, and that unique twist in the injury suit has experts from the taxi industry waiting to see if Uber will step up to the plate to pay for Farhbach’s injuries, or if Uber will leave driver Djamol Gafurov on the hook for the bill.

Fahrbach was walking up Divisadero street near Hayes at quarter of midnight March 12 when Gafurov’s black town car, operating as a private taxi, collided with another car on Divisadero while turning left. One of the cars then collided with a fire hydrant, and in the words of the civil suit, “this impact caused the fire hydrant to be violently sheared from its base and propelled through the air a number of feet northbound…when the fire hydrant struck (Farhbach) with a tremendous amount of force.”

Gafurov’s private taxi was operating as a “partner” of Uber, which is how the company defines its relationship to the network of drivers on its website. No private taxis or drivers are considered to be employees of Uber, as the company has repeatedly maintained, claiming that the drivers, and their actions, are not its responsibility.

Uber spokesperson Andrew Noyes told us repeatedly that drivers are not employees of the rideshare company: “Our legal team took a look at the files you sent. This is not an ‘Uber’ driver, they’re not employed by us. They’re employed by their licensed and insured limousine company.” (Joe Fitzgerald)

 

MAKING CABS BETTER

For all the (justified) grumbling about the business models of ridesharing services like Lyft and Uber, the so-called ridesharing revolution may prove to be a catalyst for a taxi industry overhaul.

“We’re adding hundreds more taxis, and our board has approved regulations for each vehicle to provide real-time locational information,” San Francisco Municipal Transportation Agency spokesperson Paul Rose told us.

“One of our goals is to move forward with making the data available to our customers to hail a cab with an app,” Rose added, referencing a plan unveiled by the transit agency several weeks ago. Faced with stiff competition from random vehicles adorned with garish pink mustaches, the taxi industry is taking a stab at evolution, or at least imitation.

To be a cab driver right now, paying off the pricey medallion they must purchase in order to operate while oblivious new transplants rake in the cash without following the same set of rules, must be infuriating.

At the same time, let’s be honest here: There’s a reason people are ditching conventional cabs and climbing into cars with random strangers who may be beckoned with the tap of a smartphone. And it has nothing to do with passengers’ sentiments about government regulation or newly minted tech millionaires.

The taxi industry lags far behind the lightning-speed reality many Bay Area residents have come to inhabit, but if it weren’t for the competition, they might not have any incentive to change.

Rideshare services might be your quintessential rogue tech companies backed by nauseating sums of venture capital, but at the end of the day, people also want taxi service that does not suck. (Rebecca Bowe)

Taxis reinvent themselves to be more like Lyft

For all the (justified) grumbling about the business models of ridesharing services like Lyft and Uber, the so-called ridesharing revolution may prove to be a catalyst for a taxi industry overhaul.

“We’re adding hundreds more taxis, and our board has approved regulations for each vehicle to provide real-time locational information,” San Francisco Municipal Transportation Agency spokesperson Paul Rose told me in an interview yesterday.

“One of our goals is to move forward with making the data available to our customers to hail a cab with an app,” Rose added, referencing a plan unveiled by the transit agency several weeks ago. Faced with stiff competition from random vehicles adorned with garish pink mustaches, the taxi industry is taking a stab at evolution, or at least imitation.

This week’s issue of the Guardian includes a story by journalist and part-time Lyft driver Josh Wolf, exposing a catch-22 facing Lyft drivers seeking full-coverage auto insurance. On our Politics Blog, reporter Joe Fitzgerald highlights a similar question that surfaced around ridesharing after an Uber driver’s involvement in a terrible accident.

The question of who foots the bill after someone gets crippled in a rideshare wreck is one of many accompanying the rise of unregulated app-connected cabs. Customers hailing a car with Uber have nowhere to turn in the event of a bad encounter, in contrast with the SFMTA’s complaint system for monitoring registered cabbies.

The SFMTA receives 100 to 120 cab-related complaints each month, and requires the city’s 311 information hotline info to be posted in every registered vehicle. “We follow up with every incident,” Rose said. “Results range from addressing or notifying the driver, to the very extreme – a revocation of a permit.”

To be a cab driver right now, paying off the pricey medallion they must purchase in order to operate while oblivious new transplants rake in the cash without following the same set of rules, must be infuriating.

At the same time, let’s be honest here. There’s a reason people are ditching conventional cabs and climbing into cars with random strangers who may be beckoned with the tap of a smartphone. And it has nothing to do with passengers’ sentiments about government regulation or newly minted tech millionaires.

Head over to Yelp (sorry, but it’s instructive) and read the comments yourself: Services like Lyft, Uber, and Sidecar are garnering rave reviews (Homobiles actually seems to have won the most ardent fans of all), while Yelpers use the online forum for virtual venting sessions to describe their frustrating taxi experiences. Maybe it’s a skewed sample, but there seem to be lot of people out there who were left languishing while waiting for a cab, and they’re pissed. No wonder Silicon Valley investors think it’s a good idea to dump $60 million into some faux-taxi scheme lacking clarity on even the basic question of insurance.

Wolf wrote about his experience as a Lyft driver; here’s my personal anecdote as a taxi patron. I called for a cab on a recent weekday and it never showed. When I phoned again to ask where it was, a robotic voice intoned, “an error has occurred,” and then the line went dead. Twice. When I dialed a second company, the dispatcher told me flat out that there were no cars close by. He suggested I just call someplace else, because he couldn’t help. 

Fail.

The taxi industry lags far behind the lightning-speed reality many Bay Area residents have come to inhabit, but if it weren’t for the competition, they might not have any incentive to change.

Rideshare services might be your quintessential rogue tech companies backed by nauseating sums of venture capital, but at the end of the day, people also want taxi service that does not suck. The Lyft drivers I’ve met tend to be people like Wolf – young, idealistic, bent on pursuing a creative passion despite the city’s high cost of living, and grateful for flexible work hours that make it possible to follow that dream and still make rent.

With that, here’s a sappy breakup letter composed to Yellow Cab by one Cori D., a Yelper. “I just don’t love you anymore,” she writes. “You’ve left me waiting on the curb one too many times now without a word. No ‘I’ll be a little late’ or ‘sorry you’re late for work now.’ … So I’m leaving you. In fact, I’ll confess that I’ve been cheating on you. Uber is just so handsome and reliable. … You might even say he bends over backward for me.”

True story? Or just some clever guerilla marketing orchestrated to plug Uber? Like most things pertaining to San Francisco’s information-age gold rush, it’s impossible to know for sure.

Lawsuit over injury from airborne fire hydrant tests Uber’s insurance practices

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Uber’s policy on insuring its drivers will soon be taken for a test drive, as the company that runs the mobile app-based ride requesting service and a driver were served with a court summons last week from a woman severely injured after a crash near a San Francisco intersection.

Those insurances policies were said to meet brand new regulatory requirements on rideshare services introduced by the California Public Utilities Commission on July 30, which was meant to solve the longtime regulatory battle between rideshare services and local governments.

The plaintiff in the suit, Claire Farhbach, was a bystander, not a customer, and that unique twist in the injury suit has experts from the taxi industry waiting to see if Uber will step up to the plate to pay for Farhbach’s injuries, or if Uber will leave driver Djamol Gafurov on the hook for the bill.

Fahrbach was walking up Divisadero street near Hayes at quarter of midnight March 12 when Gafurov’s black town car, operating as a private taxi, collided with another car on Divisadero while turning left. One of the cars then collided with a fire hydrant, and in the words of the civil suit, “this impact caused the fire hydrant to be violently sheared from its base and propelled through the air a number of feet northbound…when the fire hydrant struck (Farhbach) with a tremendous amount of force.”

The hydrant flew 81 feet from its original position, according to the police report.

The suit notes that Fahrbach sustained lacerations to her body, a fracture in her lower leg, and multiple herniated discs that “more likely than not will require surgical intervention in her future.”

Gafurov’s private taxi was operating as a “partner” of Uber, which is how the company defines its relationship to the network of drivers on its website. No private taxis or drivers are considered to be employees of Uber, as the company has repeatedly maintained. Uber provides software that lets passengers connect with drivers, like a digital dispatch, and the ridesharing service then takes a cut of the fare.

The image above is a modified police report from the fire hydrant incident, with numbers added: 1) site of the initial collision 2) where the vehicle hit the fire hydrant 3) where the hydrant hit Farhbach.

Yet that distinction has made their insurance liabilities nebulous, and local officials have taken notice. Officials at SFO last week started arresting rideshare operators in and around the airport, and the SFMTA, which regulates taxis, also considers them a problem.

The San Francisco Airport Commission and the SFMTA submitted concerns to the California Public Utilities Commission, charging that a “lack of adequate liability insurance, criminal background checks, driver training and regular vehicle inspections all decrease public safety, and although some [transportation network companies] represent that they do all of the above, the Airport Commission is asking for regulatory verification.” according to a CPUC report. “The SFMTA asserts that TNCs have a negative effect on public safety because of a lack of regulatory oversight.”

Cab drivers have long been regulated by the state, and these agencies contend that not only are rideshare companies like Uber dangerous, but the lack of insurance can be financially ruinous to pedestrians and drivers alike.

“Because it’s a pedestrian suing, that opens up a whole can of worms, and Uber may try to put the liability on the driver,” said Trevor Johnson, director of the San Francisco Cab Driver’s Association. A former cabbie himself, he’s been on both sides of that sort of litigation, as well as in legal actions with tech companies like Uber.

Johnson is not confident the driver will be covered by his own insurance plan, because in its current pseudo-taxi company state, many insurers consider you not quite a taxi but not a private driver, putting these tech-cabbies in an awkward limbo.

“He may be left with a big judgment, and his insurance may opt to not cover him because he’s with Uber,” he said.

This is backed up in our current issue of the Guardian, where Lyft driver Josh Wolf wrote from personal experience that it is difficult for Lyft drivers to obtain full insurance coverage for their vehicles.

A rideshare driver criticized Uber in a letter he wrote to the Guardian after reading that article. “I work for a limo company, I’m fully insured, the car is fully insured, but Uber takes absolutely no responsibility for its drivers,” the driver, who wanted to be identified as “Zark,” told us. He said he feared joining the ranks of self-employed cabbies, who often are under-insured. “[Uber] holds their customers in really high regard, but they don’t hold their drivers in any regard.”

Uber maintains that the drivers, and their actions, are not their responsibility.

In response to a query about the lawsuit, Uber spokesperson Andrew Noyes stated repeatedly that drivers are not employees of the rideshare company.

“Our legal team took a look at the files you sent. This is not an ‘Uber’ driver, they’re not employed by us. They’re employed by their licensed and insured limousine company,” he said. “The important thing is that theres no characterization of a driver as a driver at Uber.”

But Gafurov, the driver named in the accident, isn’t actually employed by a limo company.

Gafurov declined to speak to the Guardian, but after some digging, a disgruntled bystander, angry with Gafurov, found that he is self-employed and registered with the CPUC as the “Limo Car Service Corporation.”

Gafurov was driving with liability insurance, his CPUC registration shows — but he not did not have excess liability insurance, which would be needed to cover extraordinary damage caused by the flying fire hydrant. The gaping hole left by the hydrant spilled water out onto all the surrounding businesses, causing intense damage, and everyone affected is seeking compensation.

Fahrbach’s lawyer, Doug Atkinson, told us the cost of the accident will be enormous.

Notably, few independent drivers have excess liability insurance.

“A lot of carriers don’t have it, because it’s expensive,” Johnson told us. “This is a case for the excess insurance, as it stands right now with that much damage and that many people after him, unless Uber steps in and helps him save the day this driver is going to be in the hole for the next 20 years.” He added, “This guy’s life is over.”

Atkinson is hopeful that getting Uber to pay that insurance won’t be a hard sell. “I’m not looking for some protracted legal battle, I want to see a company that will do the right thing, who’s saying ‘I’m revolutionizing cab driving.’”

In order to persuade the CPUC of its viability during the regulatory proceeding, Uber told them it has the very excess liability insurance that Gafurov needs, in excess of $5 million, according to CPUC documentation from an April workshop.

But having that insurance in place is different from using it to cover damages when needed. According to Uber’s partner agreement with its drivers, “Uber and/or its licensors shall not be liable for any loss, damage or injury which may be incurred” by a driver.

Asked if Uber will help Farhbach pay her medical bill, Noyes responded, “You’re writing about a specific case and I don’t think I can say much more. A professionally licensed driver is protected by their company, it’s not really my issue to weigh in on.”

Meanwhile, Fahrbach isn’t doing very well at all, she wrote in an email. Her injuries forced her to leave her two jobs in San Francisco, one at a farmer’s market and another at a cafe, and she moved back in with her family in North Carolina to recover.

“My recovery has been a slow steady process laced with many ups and downs,” she said. “Having been immobile for the better part of three months has had an everlasting effect on my physical state. I will most likely be dealing with spinal problems for the rest of my life, but have tried to remain positive and grateful for the progress I have made.”

Fahrbach said she doesn’t have the money to cover her medical bills out-of-pocket, and this frightens her. “Frankly, if there is insufficient insurance to cover my injuries and losses, my financial future will be dismal.”

Get tough with defiant disrupters

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EDITORIAL It may sometimes seem like we at the Bay Guardian don’t like the technology industry, but nothing could be further from the truth. We tweet, click, post, and share, playing with all the hot new tech toys that spring from the innovative minds of Bay Area residents. This is an important sector of the local economy, one that often empowers people who were just getting by to remain in expensive San Francisco.

Yes, we do regularly criticize tech (and some of its biggest neoliberal cheerleaders in City Hall), as we do to Airbnb, Lyft, and other so-called “shareable economy” companies in this issue. But that’s only because we strongly believe in open and transparent discussions about public policy and the needs of city residents.

And frankly, that’s not happening these days.

Instead of engaging directly and honestly with the people and our elected representatives, Airbnb has chosen to duck its obligations to the city of its birth and dodge attempts to create a public dialogue about its dangerously flawed business model. Same thing with Lyft, another company that acts as if it’s entitled to undermine civic institutions without so much as a public conversation first.

Yes, these companies have come up with cool ideas that have become popular with Bay Area residents. In a city where it was tough to find a cab on Saturday nights, Lyft made it easier to find rides and allowed people to make some extra cash off their cars. Airbnb was also a great idea that makes travel cheaper and more personal.

The beauty of these ideas is their simplicity — but that is also their main flaw, because San Francisco isn’t a simple city. It’s a complex, dynamic city with difficult landlord-tenant dynamics, and a congested city that tries to achieve the right balance of cabs on the roadways, both systems that are the products of decades-long struggles that have spawned reams of regulations.

These tech-savvy fortune hunters, who don’t understand or appreciate that history, think it’s enough to have a good idea and some rich venture capitalists willing to back it. They espouse vaguely libertarian ideas about “disruptive” technologies empowering people, but then they wait for government officials to solve the problems with their business models, raking in millions of dollars in profits in the meantime and delaying their day of public reckoning as long as possible.

For example, in a May interview on KQED’s Forum, Airbnb’s David Hantman was asked why the company was defying a city ruling that it must pay the transient occupancy tax, he said they were waiting for the city to adopt a new regulatory structure first.

That’s not an acceptable or defensible position, and it is only continuing because Mayor Ed Lee has publicly supported the company’s defiance of city law and rulings. Mr. Mayor, if these are the types of “jobs” you’re creating — part time jobs with no benefits in an underground economy that cannibalizes other industries, breaks city laws, and won’t pay local taxes — then this city is in real trouble.

We’re happy to see Board President David Chiu trying to solve Airbnb’s problems, but he needs the support of other top city officials who are willing to put pressure on the company to bargain in good faith. And yes, we’re talking to Mayor Lee, Tax Collector Jose Cisneros, and City Attorney Dennis Herrera, among others.

If you make the city appear impotent to enforce its own laws or too willing to go easy on wealthy corporations, it will only embolden more young opportunists to disrupt the city’s regulatory authority and its social fabric. You work for us, not the venture capitalists, and it’s time to show some spine.

 

The ride-share parasites

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OPINION These days, all signs point to the eventual deregulation of the San Francisco cab industry.

On any given weekend night in the city, you can find a wide array of illegal taxis operating with impunity, including limo drivers, out-of-town taxis, Super Shuttle vans, ZIP cars, and even some sketchy folks driving their private vans down Valencia Street at 2am soliciting rides for hire. If you have wheels, you can become your own livery service.

It’s a free-for-all out here. The city appears to be giving all comers carte blanche. And while the courts wrangle over ride-sharing rules and what constitutes a taxicab, the cab industry could cave in under the unfair advantage given to its competitors.

The general manager of ride-share startup Uber, Ilya Abyzov, has been quoted as saying that cab companies have had a “state-sanctioned monopoly. They’re not used to competition.” I have two words for him, and they’re not, Yo taxi! We’re competing with about as much chance as the proverbial one-legged man in a kicking fight.

The advertisement on the website of another startup, Lyft, uses for recruiting drivers reads: “Make $22 an hour, have a blast, drive when you want, meet new people, make friends, learn about new restaurants …” This idyllic version of a cab shift could never happen without real cab drivers holding up the foundation.

I don’t think you’ll find a Lyft cab willing to take a sick grandmother from Kaiser Hospital to her home in the Alice Griffith projects. A pink mustache sighting at Griffith and Fitzgerald will probably coincide with the next great earthquake because only a drastic geological shift will cause that to happen.

Right now, it’s a cakewalk for the ride-share drivers. But without the cab industry picking up the rear and girding the underbelly, these parasites couldn’t exist. The Oxford English Dictionary defines a parasite as an organism that lives in or on another organism (its host) and benefits by deriving nutrients at the host’s expense. Substitute the word “nutrients” for the word “money” and you have what in the cab business we call a bingo.

At the end of the day, driving a cab is a hustle. And once your host is gone and the cab business gets deregulated, kiss your city tours goodbye. You won’t be able to rely on donations anymore, and your legal babble and dishonest terminology won’t save you from a harsh descent into the street, into the dog-eat-dog world of a real cab driver.

And then, you’ll know what it’s like to hustle, in the middle of the night when you’re worried about your gates and gas, and it gets real slow, and you have to take chances with your life.

Desoto Shelby III is the pen name for a San Francisco taxi driver.

 

Faux cabs: A tourism industry perspective

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I got a fascinating letter from a person who’s worked in the tourism business in San Francisco for many years, and he’s very worried about the impact of the faux cabs on the city’s biggest industry. Here’s his note:

I’m a concerned representative of the tourism industry who read your article, “The cost of fake cabs,” with great alarm.  In fact, I think you should have mentioned more on how it could affect tourism beyond that just “inexperienced drivers aren’t good for the city’s reputation.”  I’ve been the Chief Concierge of a major Union Square-area hotel for the last 11 years, and if even half of what you say is true, then I fear there could be even greater damage than what your article portends.

According to the last statistic I read from the SFCVB, San Francisco welcomed 16.5 million visitors to the city in 2012, and although many of them may be “tech savvy,”  they often do not bring their smart and cell phones with them because it cost to much to use outside their own countries.  Therefore, they are just as dependent on our taxis as those seniors and disabled San Franciscans you wrote would be disenfranchised.  if, as your article infers, companies like Lyft and Sidecar (Et Al) continue their dominating trajectory over our traditional taxi industry, I worry how the millions of visitors who come to the city will be affected.

Unlike the aforementioned vulnerable San Franciscans who at least are somewhat familiar with the city, many of these visitors often have never been here before, so they have no knowledge of alternative ways of getting around and know only a taxi as a means of transportation.

Again if, as your article infers, this trend means a “race to the bottom” of qualified drivers, I fear the detrimental affect would greatly damage our city’s number on industry – tourism.  I know first had how sites like TripAdvisor can enhance or diminish a hotel’s reputation, imagine what would happen if that were expanded tenfold and millions of visitors who could have negative taxi experiences damage the image of the city on line.  It’s not beyond the realm of reason to imagine if one of these under-regulated and under-taxed companies didn’t like tourist A or tourist B for some reason, and then disseminates that information to the other companies; essentially blackballing said tourist completely.

As much concern as I have for those of our most vulnerable citizens who are already suffering the deleterious effects as these companies proliferate, I fear that our city’s greatest industry would be harmed in ways not yet imagined.  We really have no idea yet what the future is, and I fear those who can can do something about it are doubling down on an untested concept with possible disastrous effects.

Thank you for this opportunity to share my observations.

Peter Nasatir

Dealing with the faux cabs

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Lots of comments on my article outlining the problems with the fake cabs that are riding around town without medallions or proper screening. The main complaint the trolls have appears to be their dislike of cab drivers and the difficulty of getting a cab in some places and at certain times. I’ve never had a bad experience with an SF cab driver in 30 years of living here and taking cabs, but I’m sure there are others who have; no industry is perfect.

My main concern is that the cab interlopers are lying and cheating — insisting that they don’t have to follow the same rules as everyone else. Somebody in one of the comments said that there’s nothing wrong with “ride shares,” and it’s true that everyone from Craigslist to Caltrans has some verison of a ride board, and it’s not uncommon for casual carpools to share gas costs.

But that’s not what Lyft and Uber etc. are doing. They’re private businesses, set up with venture capital backers, with the aim of making a profit by ferrying passengers around cities. That’s the definition of a taxicab business. If these were just casual shared rides, there would be no business model and they wouldn’t have investors.

I’ll tell you how we can settle the issue quickly. How about all of us who need a ride around town contact Lyft, get a lift, and then voluntarily pay nothing. Or just offer the price of gas — $4.50 a gallon, most of these cars get 25 miles to the gallon, most rides around town are five miles or less, so that would be 90 cents.

Passengers get profiles on the system, just like drivers. Anyone who does that will quickly find it impossible to get rides. Which will demonstrate that this isn’t ride-sharing, it’s commerce. And while I’m all in favor of competition, everyone should play by the same rules.

 

What cabs really do

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tredmond@sfbg.com

EDITORS NOTES There are two ways to look at the taxicab industry in San Francisco: Either it’s purely a business, out to serve customers with the products that are most profitable — or it’s part of the city’s public transportation infrastructure, and thus subject to regulations that ensure all parts of the city are properly served.

If you take the first approach, then you’re like the entrepreneurs who founded Lyft, Uber, Sidecar, and Tickengo. They offer a product that the market clearly wants — rides that can be summoned with a smart phone and tracked by geolocation (no more “when the hell is that cab going to get here?”), with both drivers and passengers rated on a Yelp-like system.

The newcomers have no interest in the city’s old-fashioned regulations, which really do, in some ways, date back to the days when cabs were buggies pulled by horses. They’ve got a business model, and they’re going to follow it.

The problem here is that cabs are not just a business. (Housing isn’t just a business, either; that’s why we have, for example, rent control, eviction protections, and code enforcement.) Taxis are an essential part of the transit system in San Francisco. They backfill where buses and trains can’t or don’t go. They provide a lifeline for disabled people and seniors who need a ride, for example, to and from health-care appointments or supermarkets.

They are absolutely essential to the tourist economy, which is the city’s biggest and most lucrative industry (tech is still far behind).

There are problems with this part of the transportation system, as there are problems with Muni and BART and airport shuttles. There need to be more cabs on the streets, particularly at busier times. The existing drivers and operators need better technology and a better dispatch system.

But taxi drivers — the old, traditional type — are required to pick up anyone and drive anywhere; they can’t cherry pick the most attractive rides. They have to go through screening and training that ensures the public is safe.

They are, like many other utilities, almost a part of the public sector. There’s a good reason for that. And it’s what the city and the state regulators should be looking at.

Time to enforce the law

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EDITORIAL The new tech companies that are making waves in San Francisco — Airbnb in the short-term rental business and Lyft and Uber in the taxi industry — may describe themselves as innovative and disruptive, and they may be appealing to investors.

But there’s a more accurate word that describes their relationship to the city:

Cheaters.

The way these companies are luring customers isn’t really about high-tech applications or brilliant business models. They’ve just found a way to get around the rules that everyone else has to obey.

Some city officials are talking about hearings and new legislation, all of which is fine. But in the rest of the business community, when someone flagrantly, openly violates the regulations, the City Attorney’s Office cracks down. That’s what needs to happen here, and soon.

Airbnb has a slick and appealing promise: You can rent out your house or apartment on the Internet to someone who wants to stay in the city for a few days, but is looking for an alternative to a traditional hotel. The homeowner or tenant gets some extra bucks; the visitor gets to stay in a cool neighborhood at a bargain price. What’s not to like?

Well, for one thing, most leases in San Francisco bar unauthorized sublets, so renters who offer their places on Airbnb face problems with their landlords, including possibly eviction. City laws also bar the use of residential property for commercial purposes. And, as we’ve pointed out repeatedly, Airbnb isn’t collecting the transient occupancy tax that every other hotel operator in the city has to pay. The total tab: At least $1.8 million a year.

Lyft and Uber say they’re using creative apps to offer an alternative to the screwed-up taxi system. Drivers offer rides to people who can “volunteer” to pay at the end — but if nobody pays, the whole business model fails and the venture capitalists who put up the money lose. So everyone knows that these are pay-for-hire taxis.

Except that San Francisco requires every taxi driver to have a permit, called a medallion — and drivers have to go through training, background checks, and carry extensive insurance. If a driver overcharges or refuses a fare, a customer can complain to the city, and get recourse. The startups don’t follow the same rules.

There are reasons the city regulates cabs and charges hotel taxes. Cab drivers are ferrying people, some of them vulnerable; it’s only a matter of time before a rogue driver who sneaks into the new unregulated startups winds up in a horrible crash or criminally preying on riders.

Driving a cab without a medallion is illegal. Failing to pay city taxes is, too. City Hall can debate and dither and try to avoid offending the mayor (who, unfortunately, is trying to help Airbnb slide). But this is a clear-cut case of businesses flouting city law. Herrera needs to put an end to it.

 

Lyft to take on Muni routes

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In an announcement that could transform transportation policy in San Francisco, the startup company Lyft is prepared to take over some of the most crowded and dysfunctional Muni routes in San Francisco.

Mayor Ed Lee and the Municipal Transportation Agency have approved a plan that would turn the 38 Geary, 30 Stockton, and 14 Mission over to the tech startup, City Hall sources told us. The plan is still tentative and the Mayor’s Office is trying to keep it tightly under wraps until the financial details are complete.

However, documents provided to the Guardian show that Lyft would buy at least 68 buses, including 12 articulated vehicles, at a price still to be negotiated. In exchange, the city would give the company – known for its pink mustaches on illegal taxi cabs – exclusive rights to operate on the heavily-used lines.

Lyft is developing an  app that would allow customers not only to view approaching buses but to book specific seats for an additional  price. Sensors in the bus seats will emit an electronic buzz to alert passengers that their seats had been purchased by someone else, warning them to vacate by the next stop. If the passengers remain, they will feel a sharp electric shock.

Lee’s office said the plan is similar to the market-based parking-meter program that raises the price of a space in times of heavy demand.

“The free market solves so many problems,” Christine Falvey, spokesperson for Lee, told us. “And it’s pretty clear that too many people who don’t really need to sit down or who are perfectly capable of waiting for a later conveyance are taking up space on the most crowded buses.”

Ron Conway, the venture capitalist who is Lee’s closest ally in the business community, will invest as much as $40 million in the new venture, Silicon Valley sources say.  If the trial public-private partnership works, he’s prepared to raise money to buy out Muni and turn the city’s bus system into a private operation.

“You’ve got a captive market, and demand-based pricing is what’s happening these days,” Falvey said.  “It’s just the next step.”

Are the new ride-shares unsafe?

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Interesting letter to sfist, which typically loves the new rideshare companies like Lyft and Sidecar. The writer, apparently a cab driver, makes clear why these unlicensed cabs are a problem:

Taxi drivers are professional drivers with hundreds of thousands of city miles under their belts, intensive knowledge of city streets and each vehicle is inspected twice a year by the government of San Francisco and the SFO Airport Authority. These inspections insure that the three GPS tracking units, full motion video cameras, radios and other safety equipment is functioning and that the car is in compliance with DOT rules and regulations.

Yes, some cabbies are assholes, and yes, some cabbies don’t know their way to certain places in the city, and of course some cabbies drive like crazed maniacs. Sadly though the more Lyft and Sidecar operate and undercut the legitimate transportation services the more often this will happen. How would you feel if you had spent countless dollars and hours getting to do your job for crappy pay and to be treated like shit, only to have someone come in that didn’t do what you had to to get your job and do essentially the same thing for less money… making it so you couldn’t feed your kids, or pay your rent

Lyft and Sidecar are very dangerous for the city and the traveling public by putting un-licensed, uninsured, untrained, amateur drivers on the streets.

 

TIme to call these what they are — taxis — and make them get permits like every other taxi in the city.

More unregulated cabs on the street

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So the state regulators have decided that it’s just fine for companies that pretend not to be taxi operators to operate taxis in San Francisco. That means Lyft and Uber can keep picking up passengers, charging them a “recommended donation” and avoiding the regulations that San Francisco wisely put in place to protect the public.

But the fact that the state thinks this is just fine and dandy, for now anyway, doesn’t mean San Francisco has to do the same. This city has the right to put rules in place for people conveying passengers within its 49 square miles — and those rules ought to apply to Lyft and Uber and Sidecar, too.

Cabs have to carry medallions, or permits. There are a limited number, and they can’t be owned by corporations, only by active cab drivers. You can buy one now — for about $200,000 — or you can get in line and wait, for about 15 years. If the city wants more cabs on the streets and likes the Lyft model, fine: The Municipal Transportation Agency can issue more permits, and if the venture capitalists backing Lyft want to pay for them, they can do so.

I’m not against Lyft or anyone else who has a good idea to serve the public in a way that isn’t being offered now, and I agree that this is the kick in the pants a slow-moving industry needs to develop (fairly simple) apps that allow people to figure out where the nearest cab is and when it’s coming.

But right now, we have an unregulated industry operating in competition with a heavily regulated industry, and it’s not fair. The City Attorney’s Office ought to look into this; the supervisors ought to investigate and force the newcomers to follow the rules. Sure: Lyft. But not this way.

A cab driver’s lament

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OPINION I’m a San Francisco taxi driver. The reality on the streets is terrible.

Cab drivers are being squeezed from all sides. The Municipal Transportation Agency is part of the problem, because for the past year or so it has been energetically focused on enhancing the city’s revenues by selling taxi medallions (for $200,000) and putting hundreds of new cabs in service, at the expense of drivers.

That happened to coincide with the introduction of Sidecar and Lyft, to which the MTA’s response is painfully slow and ineffective. Neither problem is being resolved to the benefit of drivers.

SideCar and Lyft pretend that they’re just folks doing community service car-pooling, while being backed by millions of venture capital dollars. They are trying to be taxi services while avoiding using the word “taxi” in their names. They don’t want to talk about driver safety or insurance issues.

Cab drivers are heavily regulated for a reason — for your safety. There is accountability in the system.

There is no oversight of the new industry interlopers. The way these companies operate is not safe and not legal. When I went through my city-required week of driver training, photographing, fingerprinting, background check, and fee paying, everyone involved took it very seriously. If a cab driver screws up in any way, the company pulls him or her off the street.

Taxi drivers are held to a high standard of performance. We’re not the pizza delivery guy who’s now using his car to “ride-share” people around. Most of the time that won’t matter — until it really does matter. With SideCar and Lyft, if something goes wrong, you’ll find yourself with no protection and nowhere to turn.

I’m a night shift driver, and let me make it clear: Driving a taxi is a very hard job. You have to know the city, you have to deal with all kinds of people, have the patience of Job, make no mistakes, and be okay with little better than minimum wage — although there are no wages for cab drivers, what you make is whatever business you can manage to find — with no guarantees or benefits. The driver is the sole merchant, and he or she takes all the risks.

The regulatory framework needs to catch up with the technology, which is here to stay. The larger cab companies already use GPS technology. Luxor uses the “Taxi Magic” or “Cabulous” app to connect cabs to people who need rides.

But the taxi industry is already in a situation where, as a Guardian editorial noted, “too many cabs chasing too little money leads to bad behavior — and bad drivers.” The cease and desist order against the interlopers is being ignored. The fines imposed on them are being challenged and appealed.

So the industry is dysfunctional, with lawyers on all sides making things worse — and the drivers are the only ones who are suffering the consequences.

John Horn drives for Luxor Cab

 

Cabs v. Lyft et. al. isn’t just about tech

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Of course the Chron portrays it as “The latest battle pitting disruptive high-tech innovators against old-school industries and regulators,” because that makes for good copy. It also puts the taxicab industry and the people who oversee it in the position of being dinosaurs fighting against an inevitable new world.

But seriously: This has so little to do with smart phones and apps and GPS systems. Those are tools that anyone can use, and the local cab companies ought to and will soon anyway.

What it’s about is the notion that there are such things as public utilities that ought to be regulated in a way that protects the public.

San Francisco decided as a city many, many years ago that you can’t just stick a sign on your car, call yourself a taxi and start charging people for rides. That’s fairly standard practice in American cities, where cabs are considered part of the transportation system — and are a service that, without regulation, is ripe for consumer fraud and safety problems.

Not to make too broad a case, but in California, you can’t just hang out a sign and call yourself a contractor and start applying for building permits. You need a license. You can’t just open a bank and start making loans, at any interest rate you want. You can’t call yourself a dentist and start pulling teeth, either. There are good reasons for these rules. (I suppose some day someone will suggest that surgeons should be chosen not by the AMA or by state licensing boards but by Yelp; some guy cuts off the wrong part of the body or kills someone on the operating table? Hey, he won’t get a good rep on social media and his prices will have to come down. But I don’t think that’s such an excellent idea.)

Even conservatives agree that there needs to be some form of business regulation — and when it comes to cabs in a major urban center, those regulations need to include safety tests and standards on the vehicles, safety checks for drivers (a DUI in the past three years will make you ineligible to drive a cab in SF), a system to regulate fares (so tourists who don’t speak English or understand US currency don’t get cheated) and, perhaps most important, an oversight system that allows people to complain about incompetent or dangerous drivers — and have those complaints investigated and addressed by a government agency.

The battle between the new high(er)-tech faux cabs and the existing industry is also being portrayed as selfish, entitled drivers not wanting to give up their piece of the game:

SideCar’s Paul, a onetime congressional policy analyst, said the issue might eventually work its way up to the governor’s office, which oversees the commission. “The PUC has an existing set of rules that were written for an era when communication technology was literally just a landline telephone, and they’re trying to shoehorn them into this new world,” he said. SideCar is also using social media to drive support of an online petition to the PUC. Within 24 hours, the petition at Change.org had more than 5,000 signatures. “Change always threatens incumbents,” wrote Tim O’Reilly, a Sebastopol business owner. “But some incumbents find ways to get government on their side and try to restrict competition.”

But let’s have a little perspective here. We’re not talking about (unregulated) musicians complaining about MP3 downloads and song-sharing or old-school (unregulated) newspaper publishers complaining that Craigslist took all the classified ads. We’re talking about an industry that is part of a public infrastructure and needs to fall under direct government supervision.

There are good reasons why San Francisco limits the number of cabs on the streets — and it’s not just industry corruption and influence. Too many cabs chasing too little money leads to bad behavior — and to bad drivers. You can’t get someone to drive a cab for so little money that they can’t pay the rent, and the lower the pay, the lower the quality of the drivers. There are excellent cab drivers in this town who have been doing the job for 20 years or more and know every address, every shortcut, every trick to get you there … but there won’t be many more of them if it becomes a business only for the young and the desperate.

Now: The city ought to have a centralized computerized dispatch system, with GPS on all the cars and an app to get the one that’s clsoes to you (and even more important, give you honest, real-time information about when the ride will arrive). These are technological changes that are coming, and that the city can mandate.

But you can’t just let anyone with a smart phone be a cab driver. That’s not innovation against old-school; that’s just good common sense.

 

 

 

 

 

The unregulated cabs

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EDITORIAL Yeah, the shared economy. Yeah, high tech. Yeah, there’s an app for that. Yeah, the San Francisco cab industry is screwed up and you can never get a cab when you need one.

But that’s not an excuse for the city to stand by and allow a whole cottage industry of unregulated, unlicensed cabs hit the streets, using a business model that everyone knows is fake and undermining decades of painstakingly crafted rules that govern this critical part of the city’s transportation infrastructure.

Over the past year, at least five new companies have opened that offer what the taxi industry offers — rides around the city for money. They do it in a cool new way — you send a message from your phone requesting a ride, you follow where the driver is with a GPS app, and when you get to the destination, you make a “voluntary” payment through a Pal-Pal-style system.

It sounds great: Fast service that the existing industry can’t always offer, an easier way to pay (a lot of drivers still demand cash only, in part because the cab companies charge drivers an extraordinary fee for credit-card transactions) and — more important to a lot of us — a way to know exactly when your ride will arrive. (Ever call a major cab dispatcher to ask when the car will be there? “As soon as he gets there,” is the usual gruff response. Sorry we asked.)

But there’s a reason that the city regulates taxis. Drivers are in constant contact with the public — with vulnerable people who may be tourists with limited English, seniors or others who could easily be exploited, or in the worst case scenario, harmed — so a background check is required for anyone who gets behind the wheel of a cab. Cabs have to carry extra insurance to cover passengers. There’s a city office where you can file complaints against unethical drivers. Companies won’t hire anyone with a serious infraction on his or her license.

There’s nothing, not a single rule or regulation, to protect customers of the new startups.

The city also controls the number of cabs on the streets — in part because too many cabs chasing too few fares leads to problems. You can’t legally drive a cab in the city — that is, pick up and discharge passengers for hire — without a city medallion.

The new companies, like Lyft and Sidecar, get around that rule by claiming the fare is just a “suggested donation” — which everyone knows is bogus. The companies would have no business model without charging money for rides.

The emergence of these new companies demonstrates how far behind the city and the taxi industry is — easier payment and more reliable service is such a mandate that customers are willing to go elsewhere when they don’t get it. But the idea that the free market and tech-savvy entrepreneurs will solve every problem clashes with the longtime, demonstrated need for regulations in the taxi industry.

City officials need to make it clear that they won’t allow these rogue cabs to keep operating. If the new outfits want to offer their services, they need to do what every other cab company does — line up medallions, follow the rules, get the proper insurance and operate within the law.