The Salt Lake City Council wants to amend its ground transportation ordinance in order to better suit (and more efficiently regulate) ridesharing services like Lyft and Uber. However, representatives with Lyft are not happy about these potential updates. Indeed, on the eve of the City Council vote set to approve or deny amendments to the transportation ordinance, Lyft drivers rallied publicly to protest the amendments.
So what's their argument? The Lyft representatives at the rally said that the Salt Lake City Council's proposed amendments are not a good match with the ridesharing business model that companies like Lyft and Uber utilize. These services contend that they should not be considered transportation companies in the same way that taxicab firms are transportation companies.
Instead, Uber and Lyft want to be considered as a platform that connects customers and freelancers over the Internet. In this case, the freelancers are drivers, and the customers are people who need to set up rides. In other words, if Uber and Lyft are not transportation companies, then they are in a grey area that is very close to that description.
The not a transportation company argument is not new for either Uber or Lyft. Both companies have used the argument all over the country, whether to fight against city regulations or to deny responsibilities for crimes committed by their drivers. It is, in many ways, a defense mechanism meant to divert blame and save money.
The issue is that what is good for Uber and Lyft and their drivers might not be good for customers. For example, the ridesharing services in Salt Lake City are technically operating outside of the law, and have been since they arrived in the area in the spring. That's because the companies don't abide by existing ground transportation requirements, like a minimum $30 fare charge. Since the appeal behind Uber and Lyft is that they offer a less expensive option, the City Council has agreed to get rid of that particular requirement. The new ordinance amendments that the City Council are considering would make other changes meant to make local laws more applicable to both taxi companies and ridesharing services.
However, Lyft representatives aren't too happy about the other facets of the ordinance. For instance, the City Council vote would require all ground transportation drivers to undergo the same city background checks. The ordinance would also demand city vehicle inspections.
These rules are the kind of balanced regulations that taxi drivers have been looking for in other cities. Frequently, taxi companies say that ridesharing services have an unfair advantage because their drivers aren't held to the same regulations. By making all drivers undergo the same background checks, Salt Lake City would be creating more uniformity in the marketplace and helping to facilitate fairer competition. Lyft doesn't see it that way, though. Representatives for the ridesharing service say that Lyft drivers already undergo background checks and vehicle inspections through the company. They also argue that having to go through similar checks again would qualify as over-regulation and would force Lyft to leave Salt Lake City.
On the one hand, it makes sense that Lyft doesn't want to pay the city to run checks it has already run. However, since the thoroughness of the background checks run by Lyft and Uber have been repeatedly questioned this year, a city background check seems like a necessary precaution. And no matter how many times Uber and Lyft claim that they aren't transportation companies, the fact is that they compete directly with taxi companies and should therefore be subject to the same regulations.