Uber Coming To Fayetteville, City Wants To Put On Brakes

FAYETTEVILLE -- City officials aren't putting out the welcome mat for Uber, a company that uses smartphones to connect drivers with those seeking rides as an alternative to traditional taxis that announced Wednesday it's operating in town.

"In pursuit of our simple mission -- transportation as reliable as running water everywhere and for everyone -- we aspire to transform the way people connect with their communities, revolutionizing the way they move, work and live," according to the company's website.

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City Attorney Kit Williams said Uber, or any similar business such as Lyft, will be in violation of a city ordinance regulating taxi cabs if they try to operate in the city.

"If they try to operate, their drivers will almost certainly be ticketed by the police," Williams said. "The app shows where the drivers are. It's very difficult for them to operate totally in the shadows with this system."

Williams said Uber and Lyft aren't licensed to do business in the state and have no offices here so there's no one to sue if something goes wrong.

In addition, Arkansas cities have broad powers to regulate taxis. Fayetteville requires a permit, which Uber hasn't applied for, along with special equipment and identification of taxis and commercial liability insurance to protect riders. The city also requires taxi drivers apply for a permit and prove they have proper licenses. Drivers must have a background check, and taxis must be inspected annually to assure they're safe and sanitary.

"The new Internet "semi-taxi" companies like Uber and Lyft do not comply with any of these mandatory, public safety requirements," Williams told city officials in a July 14 memo.

Insurance is a sticking point because it may not pay if there's an accident with property damage or someone is injured, Williams said. He said Uber claims to have a temporary liability policy to cover drivers, but Williams said he has seen no proof such a policy exists. A driver's normal liability policy generally has an exclusion to coverage if a vehicle is being used "for hire."

Williams sent a letter July 16 to Lyft and Uber outlining the city's concerns.

"The City wishes to ensure the established record of safety and responsibility of our properly licensed taxi cabs is not undermined by uninspected, possibly uninsured and unsafe casual drivers for hire just so you can reap windfall profits from afar," Williams wrote. "Please do not attempt to operate or solicit or help drivers for hire to operate within the City of Fayetteville."

Brice Curry, owner of Dynasty Transportation, said the services are basically unregulated and pose a danger to the public, including University of Arkansas students.

Curry said it takes a month for him to get a driver through the local, state and federal background checks, licensing requirements, the required permits and into a car while an Uber driver can sign up today and be carrying passengers tonight. There's also no one keeping track of the Uber drivers such as cab companies do, he said.

"I want to see our city stand up and enforce our ordinance," Curry said. "There's no safety check in this system. It needs to be monitored and controlled."

Curry said he also has concerns about the insurance issue. Dynasty carries a $1.5 million-$5 million liability insurance policy.

There are already too many taxi companies in Fayetteville for the amount of business available, Curry said.

"We don't need another cab company in the city," Curry said. "Two have already gone out of business because we have too many out there."

The company and its main competitor Lyft have been involved in some controversy with accusations their freedom from traditional taxi regulation gives them an unfair advantage.

Earlier this year, Little Rock's city attorney sent a letter to the companies telling them operating without taxicab permits would be illegal.

NW News on 08/29/2014

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