Nguyen: What You Need to Know Before Signing Uber Petition

Thursday, August 06, 2015

AiVi Nguyen, GoLocalWorcester MINDSETTER™

If you are a customer of Uber Boston, you have likely received an email from Uber asking you to sign a petition that challenges a bill that has been proposed in the House and the Senate. The stated purpose of the bill is to set up a framework to protect customer safety and market fairness in the ride-sharing / taxi industry.

Essentially, the bill proposes that the Department of Public Utilities have complete oversight of all aspects of ride-sharing companies including, but not limited to: driver, vehicle, and insurance qualifications; pricing; modes of delivering service; and requiring companies to pay annual “assessments” based on their profits.

The Uber email reads, in pertinent part: “Taxi special interest groups are trying to pass a statewide law to force Uber out of Massachusetts. . . with more than a dozen different provisions that will destroy the Uber you know and love.” The email goes on to “summarize” the reasons why the bill is “wrong for Massachusetts.” Uber alleges that the bill is designed to: (1) “make it hard for drivers to partner with Uber”; (2) “prevent YOU from getting a ride where you live and work”; (3) “increase how long you wait and the price you pay”; and (4) “limit your transportation choices across Massachusetts.”

Uber does not provide a link to the proposed bill in the email.

I have taken the liberty of reading the bill. While some of Uber’s claims are true, some are definitely exaggerated and/or omit key information for which I think the public has a clear interest. House Bill No. 3702 does set forth much stricter guidelines for Uber and all other ride-sharing companies, however, perhaps not all of them are bad. Let’s walk through the four points listed above.

Allegation: The bill will make it hard for drivers to partner with Uber.

The bill proposes very strict oversight of drivers and their qualifications. Some of these include: no Uber driver can be a registered sex offender; have previously been convicted of, or pled guilty / no contest to a felony offense ever or a crime that required a revocation of their driver’s license within the past 7 years; or within the past 3 years been convicted of, or pled guilty / no contest to 3 or more moving violations, failure to stop for law enforcement, reckless driving, or refusing a breathalyzer test.

Drivers have to submit to random drug tests.

All ride-sharing vehicles have to be younger than 5 years-old and have to be certified as a “livery vehicle” and carry commercial automobile insurance with a minimum of $1,000,000 in bodily injury coverage.

Allegation: The bill will prevent people from getting a ride where they live and work.

Drivers may only pick up fares that they have prearranged through the mobile app. They may not pick up random people who are hailing them like a taxi.

Drivers may not pick up fares at any property managed by an airport or authority, unless previously authorized to do so.

Drivers may not wait around in any public way for fares to come in.

Allegation: The bill will increase the time people wait and the price you pay.

Aside from drivers not being able to pick up random people outside of the mobile app and not being able to wait around in places that will likely have fares, I do not see how the bill will increase wait time, unless we accept the argument that with such strict criteria on drivers, there will inevitably be fewer drivers, and we will all have to wait longer. I think we should accept that theory as true.

The bill requires that ride-sharing companies submit all of their pricing calculations to the DPU for approval. There is no indication as to what the range of those rates will be, but they will probably be raised so that taxi companies can compete.

However, the bill does away with surge pricing. I repeat, the bill does away with surge pricing. This means that regardless of what the supply and demand is at any given time, Uber may not raise its pricing. There is a carve-out for an “emergency situations” in which case, Uber may raise its pricing but no more than twice its normal rate.

The bill does give the DPU the authority to make an annual “assessment” against a ride-sharing company based on the company’s operating revenues in Massachusetts – in other words, create a sort of tax on profits. This type of overhead will likely be felt by customers in pricing.

Allegation: The bill will limit people’s transportation choices across Massachusetts.

This is a generalization without specific provisions of the bill in mind. I think the generalization is true though. Any time the rules get stricter in an industry, there are fewer players involved. Some ride-sharing companies may fold completely if this bill is passed. Those that survive will definitely feel the squeeze with fewer qualified drivers and more overhead.

Like I said, some of this stuff is good and some of it isn’t. Look, I love Uber. And honestly, I think it’s perfect the way it is now (except for, of course, the surge pricing) and I may very well sign Uber’s petition. I just think that everyone who is considering signing the petition, like any other time you sign anything in your life, should be informed.

AiVi Nguyen is a trial lawyer with the Law Firm of Bowditch & Dewey, LLP in Worcester.