Monday, July 14, 2014

Competition for taxis: Does a court test lie ahead in Little Rock as in Texas?

Posted By on Mon, Jul 14, 2014 at 11:08 AM

click to enlarge RIDE SHARING: Uber eyes Little Rock. Little Rock officials shoot daggers back.
  • RIDE SHARING: Uber eyes Little Rock. Little Rock officials shoot daggers back.

The Democrat-Gazette's Chelsea Boozer had a good article this morning on the city of Little Rock's apparent resistance to new-age transportation services such as Uber and Lyft, which send cars in response to cell phone calls with an app that collects from the customer.

City Director Joan Adcock has been stirring opposition and Adcock's bulldogging often gets her way at City Hall. (Coincidentally, her work on this issue helps Ellis Houston's Greater Little Rock Transportation Services, a city taxi franchise holder, which contributed $1,000 to Adcock's last re-election campaign, in 2012.)

City Attorney Tom Carpenter has provided part of what Adcock wanted — a declaration that these companies' "business model" doesn't comply with city code regulating car service for hire. But City Manager Bruce Moore (properly) has been reluctant to send cease-and-desist letters to such operators because they are not yet operating — they are merely seeking potential drivers here.

I've been watching this situation for some time. Can  Little Rock really prevent entry to the market of technology savvy competitors that have managed to find a way to operate in San Francisco and even highly regulated New York?

It may take court cases to decide, if recent experience in Texas is any indication. In major Texas cities, the companies' drivers were banned from taking money because of similar legal obstacles. So Lyft allowed drivers to take "donations." In Houston and San Antonio, cab operators sought a temporary restraining order to block the services, but a federal judge so far has refused to go along. Reports Texas Monthly:

Houston-based U.S. District Judge Vanessa Gilmore set a July 15 date for an injunction hearing, which could result in stopping the smartphone-based companies from operating or give city ordinances a chance to catch up with the technology.

Gilmore said she had some "real concern" about whether the taxi and limousine companies had standing for a temporary restraining order, and added that she was particularly concerned about doing anything that stands in the way of a political process that already is under way.

The city of Houston's Department of Administration and Regulatory Affairs has proposed revisions to the city's ordinances related to vehicles-for-hire that would allow ride-sharing services, such as Uber and Lyft, to operate in Houston.

Texas Monthly's report has it about right. City ordinances regulating transportation address concerns about safety of vehicles, drivers and insurance. But the ride-share services provide some flexibility in supply and demand that the taxi permit system does not. Their availability should be considered in a political process, not vetoed before they begin because of private interest lobbying.

(PS: Houston is still struggling over an ordinance revision. Here's a recent blog post that castigates the ride-share outfits for their high-pressure lobbying. Uber can afford it with a $17 billion market cap.)

It's hard to believe that Little Rock won't eventually have to find a way to join the high-tech world. What would a yuppie worker in our new tech park, fresh off a connecting flight from SFO, say when he arrives at LIT late one night and finds, as I have, no taxi and no hope of getting one? No Uber number here? OMG! LMAO!

But our joining the new world might have to reckon with how long Joan Adcock plans to serve on the City Board.

Little Rock currently has a monopoly taxi franchisee, Greater Little Rock's Yellow Cab, though others could apply if they operate a minimum of two cabs and meet other high regulatory hurdles. I'm checking to see how many cabs Greater LR is licensed to operate and how many they currently have in service. In some cities where franchisees have fought the ride-share companies,  far fewer cabs are operating than allowed, one argument for the ride-share services.

UPDATE: In 2014, Greater LR paid a $500 franchise fee and $60 per vehicle for 120 permits. It had 117 vehicles inspected for service.

PS: The Uber reaction/counterlobbying is furious everywhere. In Illinois, Uber is pressing the governor to veto legislation that Uber says is intended to hamper ride-sharing companies.

PPS — I'm reminded that Ellis Houston turns up periodically with offers, touted by Adcock, of free rides to the polls. Those offers have been followed by occasional grumbling about targeting of who gets rides and who does not. Also, Adcock has presided over direction of donated used vans by Houston to nonprofit groups, one of the many outreaches Adcock uses to build neighborhood support. For example, eStem charter school credited Adocck here for a van Houston's company donated.

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