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City issues new round of threats to Lyft, Uber

By Nico Savidge, The Wisconsin State Journal
McClatchy-Tribune Information Services

July 02--Madison's City Attorney issued a sternly worded letter to Lyft and Uber on Tuesday, threatening new sanctions against the ride-sharing companies if they don't fall in line with local laws.

City officials have been sparring with Lyft and Uber -- which use smartphone apps to arrange rides between passengers and drivers using their personal cars -- since the companies launched in Madison about four months ago.

Taxi companies and city officials, most vocal among them Mayor Paul Soglin, say Uber and Lyft are acting as unlicensed cabs. The ride-sharing companies counter that they're logistical businesses, not taxis, bringing together riders and drivers.

The City Attorney's Office sided with the mayor in March, finding that the companies are providing taxi services and violating Madison's ordinances.

City Attorney Michael May's letter -- sent to representatives of Lyft and Uber, as well as Soglin, City Council members, police officials and others -- reiterated that position.

May gave the companies until July 11 to tell the city the "exact steps" they will take to follow Madison ordinances, including requirements that taxi companies operate 24 hours per day and have adequate insurance coverage for drivers, among others.

If they don't, May wrote, the city will "take any necessary additional enforcement."

He did not specify what that enforcement would be, however, and said in an email that the city is "considering a range of enforcement options," which could depend on the response from Lyft and Uber.

Ride-sharing companies have sparred with local governments in cities across the country and around the world. In those fights, the response from authorities has ranged from letting the companies operate with little regulation to citing drivers and impounding their cars.

Madison police cited two drivers -- one from each company -- for violating taxi ordinances in an April sting operation.

Police Chief Mike Koval said Tuesday he was not aware of any other actions taken against the companies since then, but given May's letter and deadline, "There absolutely could be enforcement now, given this gauntlet that's been thrown down."

Lyft paid for the citations its driver received in April.

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Uber spokeswoman Jennifer Mullin called May's letter "nothing more than a scare tactic designed to protect incumbent taxi companies, block competition and hurt consumers" and said it ignores efforts to work with the city to create "a regulatory framework that allows for modern business models like ride-sharing."

Ald. Scott Resnick, 8th District, introduced a proposal in May to regulate Uber and Lyft not as taxis, but as "Transportation Network Companies."

Since then, Resnick said city officials and representatives from the companies have had productive negotiations and have worked to create legislation that is "almost ready" for the City Council to vote on. Although Resnick said he doesn't think the companies should be operating during that process, he warned that cracking down now could "dampen or even end negotiations."

Rather than working out new policies with Madison officials, the companies could go to state regulators who would be less attuned to local concerns, Resnick said.

May acknowledged the efforts to regulate Lyft and Uber in his letter but wrote that those ordinance changes "have not been adopted and may never be adopted."

"In the meantime, you must comply with our existing ordinances," May told the companies.

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(c)2014 The Wisconsin State Journal (Madison, Wis.)

Visit The Wisconsin State Journal (Madison, Wis.) at www.wisconsinstatejournal.com

Distributed by MCT Information Services

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New Strategy to avoid RMDs