Transportation

Blake: The wrench of regulation comes again for Uber and Lyft

Having failed to strangle Uber and Lyft in their cribs at the Colorado legislature last spring, the taxi and limousine companies are trying again at the Public Utilities Commission.

The established carriers want to do by regulation what they couldn’t do by law: Cripple the so-called “transportation network companies,” which were legitimized by Senate Bill 125.

This was made clear at a brief hearing Tuesday before PUC Administrative Law Judge Harris Adams, and by documents filed with the PUC before and after by TNC opponents.

“A lot of the suggestions are contrary to the statutes,” said Uber attorney Greg Sopkin after the hearing.

Sen. Ted Harvey, R-Highlands Ranch, wanted the statute to be entirely self-executing because he foresaw what would happen. “If it was up to me we wouldn’t have regulated them at all,” he said during the legislative debate. “I’d have just said that the PUC has no authority. But that wasn’t going to fly.”

Uber and Lyft are currently operating under a few temporary rules covering insurance and hours worked by drivers, but opponents want to impose many more.

The recommendations came despite Adams’ insistence that “we’re not here to question the wisdom of the law,” whose language is “clear.” He urged the TNCs and the taxis to try to work out issues on which they could agree. Another hearing is scheduled for mid-January, but the final rules won’t be adopted by the three-member PUC until later in the year.

The TNCs profess to be merely technology companies offering apps that connect drivers and passengers; they don’t own or lease the vehicles used. But the old-line carriers complain that they are essentially motor carriers and should operate under the same stringent rules they do.

But in fact, S.B. 125 gives an advantage to the taxis in a couple of areas. The bill requires TNCs to carry a minimum of $1 million in insurance, whereas the taxis somehow convinced the PUC to lower their insurance to $500,000 from $1.5 million just as the bill was going through final passage last spring.

What’s more, the TNCs each have to pay a fee of $111,250 annually to the PUC for permits, regardless of the number of cars they have on the street. But the taxis pay a mere $5 a cab per year to cover inspections. Since they have about 1,262 permits among them, that comes to a total of just $6,310 annually.

It costs much more to inspect cabs, but their inspections are subsidized by a federal program funded by interstate truckers.

Nevertheless, opponents predicted various disasters should the PUC not impose more stringent controls on TNCs. Malachi Hull, a vice president of the International Association of Transportation Regulators, conjured up images of ISIS and other terrorists running amok in Uber and Lyft cars if strict driver controls weren’t imposed.

“Meaningful regulation is critical to Colorado for our homeland security,” he said. ”With the increase in new terror groups, such as ISIS, it is critical that we continue to do our due diligence to mitigate that risk.”

That’s one way of keeping anticompetitive measures in place: Tie innovation to international terrorism.

Matthew Daus, president of the International Association of Transportation Regulators, flatly proclaimed that “deregulation has never worked in the history of the world.”

Although S.B. 125 specifically noted that TNCs are not motor carriers, Daus maintained they really are and the burden should be on them to prove they’re not. He also recommended “stringent” penalties for violations of any regulation.

He also urged the state to require TNCs to contribute to a worker’s compensation fund. That is not required under current law although it is being looked at by the state’s Department of Labor and Employment.

Sopkin noted that the taxi companies have claimed in filings that TNCs could lead to “destructive competition.” That’s tantamount to suggesting that there should be a limit on the number of drivers and, perhaps, the areas in which they could operate. The opposition would also like to give local governments more control over TNC operations. Such limits were all discussed — and rejected — during debate on the bill last spring.

Presumably the three PUC commissioners will reject all proposed permanent rules that contradict Senate Bill 125. But the taxis and limos are gambling that they won’t, which would hurt Uber and Lyft and force the legislature to address the issue all over again at a later session.

Longtime Rocky Mountain News political columnist Peter Blake now writes Thursdays for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com.

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