Peter Blake, Transportation

2013 portends positive changes for Colorado's transportation industry

Did Aspen cab driver Philip Sullivan play John the Baptist for national ride-share companies like uberX and Lyft? He did pave the way and he certainly had his head handed to him by the Colorado Public Utilities Commission.

Sullivan, a lone wolf without a PUC permit, offered rides to Aspenites in his Kia minivan for four years. He charged no fares but accepted tips. Finally High Mountain Taxi, the local monopoly, sicced the PUC on him. Investigators posing as customers gathered the necessary evidence.

Sullivan was fined a total of $15,000 after several incidents and served two short jail terms, in 2011 and 2012, for contempt of court. He has since stayed out of the news.

File photo: Todd Shepherd
File photo: Todd Shepherd

This year, uberX and Lyft started offering what they call ride-sharing services in Denver. People seeking rides can summon personal vehicles driven by their owners through a smartphone app. Lyft says its rides are free — just as Sullivan did — but unlike Sullivan, suggests tips of a certain amount, depending on the length of the ride. Its cars are marked by a large pink mustache on the grille.

UberX drivers do charge for rides, but the rate is about 30 percent less than the equivalent cab fare, said Uber general manager Will McCollum. The cars are unmarked. “Other folks can have gimmicks,” scoffed McCollum. The customer is given the make, model and license number of the approaching vehicle, and is sent a picture of the driver.

UberX is not to be confused with Black Uber, a sister company which at the touch of an app provides chauffeured limousines costing more than a taxi. It was challenged as an illegal operation by Yellow and Metro, the two largest Denver cab firms, but the PUC cleared it, since limousine companies and drivers are regulated.

The taxi companies, who are even more offended when the competition offers lower prices instead of higher ones, once again complained to the PUC when the ride-share programs began. Last week the PUC issued a proposed cease-and-desist order, demanding that uberX and Lyft show by Dec. 31 why they should not be shut down for offering unauthorized taxi service.

McCollum resisted the comparison of uberX to Sullivan, who he said could be “abusive and antagonistic.” There’s a “huge difference in terms of scale and approach, and in terms of facilitating connections to reliable rides,” he said.

Uber also has hired a couple of good lawyers, Greg Sopkin and Ray Gifford, both of whom have been PUC commissioners.

But this will be a tough fight for them. “We hope we can work with the PUC towards a new category of regulation for the peer-to-peer driver,” Sopkin said. If it can’t be done administratively, however, legislation will be needed.

“The PUC has been meeting with both companies in an attempt to find a workable solution, and both companies have been cooperative,” said PUC spokesman Terry Bote. “But at this point, PUC staff believes it will require a change in the law” to make uberX and Lyft legal.

Though neither Lyft’s nor uberX’s vehicles and drivers are checked by state regulators, both companies maintain they check out drivers and their vehicles before taking them on.

It’s been a good year for transportation in Colorado. Not only have ride-sharing companies sprung up, so have car-sharing companies like car2go, Zipcar and eGo CarShare. They have slightly different business models (car2go uses only “smart” cars) but the car is theoretically in your neighborhood and you can drive it for a certain rate per mile and/or hour, without human intervention. Then you leave it for the next driver, maybe in the same place but maybe not.

Best thing about them: As car-rental companies, they are not regulated by the PUC.

Into this quickly changing market comes Mile High Cab. After a five-year struggle that even went to the Colorado Supreme Court, it finally seems to have gotten the go-ahead from the PUC to operate 150 cabs. It would be the fifth taxi company in the Denver metro area.

Mekonnen Gizaw, its treasurer, said he hopes to be operating next spring with drivers now mostly working for other taxi companies. They’ll come because Mile High’s rents will be much less than those charged by the bigger companies, whose rent can run to $700 or more a week.

He’s promising customers a “high tech” dispatch system, although all the companies are using that now, and won’t charge them for handling baggage, which some do.

But the five-year run-up has taken its toll. Former officers are suing Gizaw in Denver district court, protesting that he illegally refused to open the books to them. They suspect improper spending. Since a PUC certificate is very valuable, a lot of money is at stake and tensions are high. Whatever the outcome of the court case, principals hope everyone will come together before the launch next year.

What is needed is new legislation that recognizes the changing market in transportation and opens it up to more entrepreneurial ideas and less regulation. “The PUC isn’t necessarily best at dealing with innovation and new approaches,” said McCollum.

Said Tom Russell, a University of Denver law professor who represented Mile High Cab in court: “You want a relatively loose hand on regulation because if you don’t have it, you don’t get the innovation you need.”  

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