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Uber’s operations in Vancouver are illegal, city attorney says

Posted by on August 12th, 2014 at 6:30 am

vancouver map
(Screen capture from Uber’s Vancouver website)

The ride-hailing service Uber has hired contract drivers and is providing rides in Vancouver, Wash., illegally, according to a July 25 memo from the city attorney’s office.

“Essentially,” assistant city attorney Brent Boger wrote in the memo to city council and staff, transportation network companies such as UberX and Lyft “are taxi services operated out of personal vehicles.”

UberX costs about 35 percent less than a traditional taxi ride. Last month, Uber’s CEO said he hopes “to get UberX pricing below the cost of owning a car.”

In Vancouver, the base fare is $1.50 plus $1.65 per mile with no additional tip, compared to $2.50 base and $2.30 per mile plus tip for a normal taxi.

But the low prices are possible (despite drivers who sometimes make more per hour than traditional cabbies) in part because Uber’s practice has been to start operating in cities without following local taxi laws, such as limiting the number of taxis available or requiring a portion of the fleet to be wheelchair-ready.

Uber hasn’t yet chosen to operate illegally in Portland, where the penalty for driving an unlicensed taxi is up to six months in jail.

Portland is now the largest major metro city in the country with neither Uber or Lyft. Of the top 40 metro areas, they’re unavailable in the central city of only two: Portland and Las Vegas.

But in Vancouver, there’s no provision for imprisoning drivers of unlicensed taxis — and there is also, as Boger wrote in his memo, not enough staff for the city to actually enforce its taxi code.


Vancouver Finance Director Lloyd Tyler has served as the city’s policy specialist on Uber.

“The city manager, Eric Holmes, raised this issue with city council very briefly about a week ago,” Tyler said in an interview Monday. A workshop to learn more about the issue and get direction from the council will “likely be held during the next couple of months,” he said.

“You wouldn’t believe all the fees and hoops I have to jump through to just put a vehicle in service. And to totally ignore it on the other side just drives me crazy.”
— Steve Entler, general manager at Radio Cab

One of the many issues raised by Uber is whether an Uber-affiliated driver’s auto insurance will pay damages if the driver injures someone while heading to pick up a fare.

Last month, Seattle’s city government struck a deal to legalize Uber and similar services in exchange for them offering up to $300,000 of contingent injury liability insurance coverage for Uber drivers who are logged into their apps but not carrying riders. (Uber drivers who are carrying riders are covered by a larger $1 million policy.) For legal taxi services, the State of Washington requires at least $300,000.

Until or unless Vancouver can reach a similar bargain with the company, anyone who’s injured by an Uber driver in this situation could get just $100,000 from the insurer.

General Manager Steve Entler of Radio Cab, which operates the metro area’s largest legal taxi fleet, said in an interview Monday that to be fair, every driver Uber is hiring in Vancouver should be waiting to get a vehicle-for-hire permit, which requires fingerprints and a criminal background check from the city. (Uber conducts its own criminal background checks for UberX drivers.)

“You cannot put that vehicle-for-hire in service until you have a vehicle-for-hire permit, and on average it takes us about three months,” Entler said. “You wouldn’t believe all the fees and hoops I have to jump through to just put a vehicle in service. And to totally ignore it on the other side just drives me crazy.”

Uber didn’t respond to requests for comment Monday.

Update 8/13: Uber spokeswoman Eva Behrend responds without disputing that the service is currently operating illegally in Vancouver. “Regulatory models have not kept pace with innovation,” she writes in an email. “We look forward to working with officials all over Washington to get a statewide solution that addresses this emerging industry.”


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Comments
  • Bjorn August 12, 2014 at 8:23 am

    The minimum amounts for insurance need to go up for everyone. 100k is nothing if you are hurt badly by someone driving a car. My initial hospital stay in 1990 was over 50k.

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  • Alex Reed August 12, 2014 at 9:38 am

    “You wouldn’t believe all the fees and hoops I have to jump through to just put a vehicle in service.” –Radio Cab

    What they really mean:
    “You wouldn’t believe all the politicians I have to buy to just keep the supply of competitor taxis low and profits high.”

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    • Michael Andersen (News Editor) August 12, 2014 at 9:59 am

      I know you’re exaggerating for effect, Alex, but I don’t think it’s that simple – the existing cab companies have a government-protected oligopoly but they’re subject to a bunch of regulatory constraints about who they have to pick up in what locations, what rates they can charge, etc.

      There’s a case to be made that the costs of those constraints (and of constraining the supply of taxis) outweigh the benefits. And there’s a case to be made that Uber is just not a taxi service. But the city’s not going to find a fair solution here by pretending that this is just about campaign contributions (which are only in the several thousand dollars for local cab companies).

      As with most regulatory capture issues, at least at the local level, I think the channels of influence here are mostly interpersonal, not mostly financial.

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      • Alex Reed August 12, 2014 at 11:57 am

        Yeah, you’re totally right. Exaggerated punditry in Internet comments is usually a bad idea :-)

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      • Alex Reed August 12, 2014 at 5:56 pm

        On further thought, the taxi regulatory structure probably mostly made sense back in the day. Consumers couldn’t effectively choose good cab cars over bad, so the regulations had to require standards in order to keep the bad apples from spoiling the lot. Additionally, governments had an interest in having taxi companies provide service to the entire geographic area and also provide service for people with disabilities. In exchange for doing all those things, the taxi companies got protection from competition through a limited supply of licenses.

        Probably regulatory capture led to the supply of licenses not being increased enough to meet demand, and regulations weren’t updated to include service standards like actually showing up when people call or enforced enough due to status quo bias. Taxi companies’ resultant complacency led to really bad, overly expensive service that angered me and made me say this morning that politicians are in the pocket of the taxi companies. Probably not true – politicians/regulators probably just hear a lot more from taxi companies, who each have a huge interest in this matter, than from consumers, who mostly each only have a small interest.

        It still strikes me as unbelievable on the face of it that Portland city commissioners could believe that a For-Hire Transportation Board of Review of 14 members with seven seats reserved for industry representatives and only 2 reserved for representatives of the riding public could possibly serve as good oversight of the for-hire industry.

        https://www.portlandoregon.gov/revenue/47378

        But maybe they never really looked at it or figure that they haven’t heard tons of complaints so the Board must be working all right despite the membership bias toward industry reps.

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  • Dave August 12, 2014 at 9:46 am

    I’m very happy to see some city, somewhere, doing something that preserves the income level of a group of working people rather than just letting the latest fraudulent “innovation” steamroller somebody’s way of making a living. The sharing economy is a scam.

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    • Bjorn August 12, 2014 at 9:55 am

      I think you may have missed the fact that Uber employees often make more than taxi drivers. Taxi service is horrendous in Portland, I find it to be basically unusable. The medallion system protects the ability of cab companies to treat their customers like garbage because we don’t really have any choice. I hope there will be some changes that make it easier and less expensive to take a cab when you need one, if Uber can do that then great, if not maybe there is another solution, but the status quo is not cutting it.

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      • Dan August 12, 2014 at 11:40 am

        To be fair, Radio Cab is great, and other cab companies (especially the ones that are authorized to wait in the cab stand at the airport) are awful.

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        • Bjorn August 12, 2014 at 1:44 pm

          Last time I used Radio Cab the driver showed up 20 minutes late, then went a longer way than necessary to my destination over my protests and then went the wrong way at the end again over my protests resulting in a significantly higher fare than it should have been. Two times ago when I attempted to use Radio Cab they never showed up. They are better than Broadway cab but they are all awful. Broadway once failed to send the van we had requested 3 hours in advance, then when we called and asked why they were nearly 30 minutes late they said it was on the way, a half hour after that a regular cab arrived which was too small to carry our bike boxes to the airport which is why we had requested the van. We nearly missed our international flight and ended up paying 192 dollars for parking because we had to drive to the airport since Broadway Cab wouldn’t even pick up the phone when we called to ask why they hadn’t sent the van.

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          • Dan August 12, 2014 at 1:55 pm

            Weird, I use Radio Cab for a lot of early morning airport trips, and they always show up right on time or early. However, I’m happy to boycott Broadway Cab based on your negative experience.

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    • Scott H August 12, 2014 at 10:37 am

      Really? A scam? You’re so far off the map I don’t even know what to say to that. The collaborative economy is thriving and growing, and it’s gaining momentum whether or not a couple of people are opposed. Try traveling outside of your bubble and experiencing how the rest of the world operates.

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    • Paul August 12, 2014 at 11:35 am

      Thank you Mr. Tax Driver for your comment.

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    • Paul August 12, 2014 at 11:36 am

      Btw, I’ve used Uber many times and it works incredibly well. Better than I had imagined initially.

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    • Monica August 12, 2014 at 12:19 pm

      I’ve used Uber several times lately while working in the Bay Area. I take a traditional Portland taxi to and from PDX (it’s usually quite early in the morning) and get Uber down there, so I’m able to compare the systems same day. There really is no comparison. The courtesy, comfort, friendliness, and professionalism of the Uber drivers is outstanding. Knowing about the Portland controversy, I’ve made a point of asking each Uber driver about their experience, how the company treats them, etc. Everyone loves it, finds it more profitable and more time-flexible than standard driving, and says the company is great to work with. I’ve met retiree drivers looking to stay busy, students looking for jobs that fit around their school schedules, and more. When I left my iPhone in an Uber car, I was able to click the “Lost something?” link on their website and be immediately connected to “my” driver (who brought it back to me at no charge). The one time I lost something in a Portland cab and called the company for help, nobody even returned my call. Let the consumer prevail on this one.

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    • Reza August 12, 2014 at 12:54 pm

      The amount of “recommends” comments like these garner always makes me shake my head…

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  • Todd Boulanger August 12, 2014 at 10:32 am

    It will be interesting to see how well the CoV handles this now…the City does have rules for taxis in its VMC,

    VMC
    http://www.cityofvancouver.us/fms/page/taxi-driver-permits

    But it also has diminished its on-going active enforcement ability greatly by closing its Private For Hire Transport Commission, laying off the staff (~1/2 FTE) and stating to council in 2012 that upon approval of the staff recommendation and council action from this point forward:

    “The City does not have staffing available to enforce the program in the field.” – City Manager report to Council (2012 report 100B-12).

    http://www.cityofvancouver.us/sites/default/files/fileattachments/city_council/page/10940/10a_sr100b-12_-_taxicab_ordinance.pdf

    My experience with taxi’s in Vancouver…taxi service pre-2006 (when the City renewed its oversight) was pretty spotty and low quality (except for the old Vancouver Cab)…a lot of the small services had taxi’s with defective seat belts, subpar equipment (front seat propped up with broom handle, etc.), “dispatchers” in name only, and 30 to 50 minute waits for taxi service at the Amtrak Station.

    Things got a lot better in 2006 system wide and a lot of those cabs retreated to the County or ended business. Back when I worked at the City, I often thought I was one of the few professional staffers who rode in Vancouver area taxis for errands (when we would discuss mobility and active transportation options). Thus the old Taxi Commission’s active enforcement was important while it lasted…since without it City Hall may not have much on-going awareness of it unless something bad happens and there is a complaint.

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  • Peter W August 12, 2014 at 11:30 am

    I like the Uber and Lyft systems. The apps work a lot better than hailing a taxi or trying to call one.

    That said, I think cities should get something good out of any deal allowing those systems to operate. The thing I’d be most interested in, that hasn’t already been mentioned, would be the GPS lat/lon positions of the start and end points of every ride. I think that’d be super useful for transit planning.

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  • kittens August 12, 2014 at 9:03 pm

    Uber/ Lyft are great if you happen to be white, in a good part of town, have a smart phone and not in a wheelchair.

    This is just further income stratification. All the white techies can self select and get their “english speaking” drivers and everything is cool.

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    • Bjorn August 14, 2014 at 10:39 am

      Uber already has wheelchair accessible vehicles that they charge the same price for in some places. There is no reason why someone in a wheelchair can’t use Uber. http://blog.uber.com/accessiblechicago

      When I look at a map of Uber’s coverage in San Francisco I don’t see any “bad” parts of town carved out of the map, it has borders but they seem quite broad stretching over 100 miles north to south.

      Low end smart phone prices have come down significantly and anyone who uses uber regularly will save more than they spend on the phone.

      It is illegal in oregon to deny services to someone based on skin color, those laws also apply to Uber and Lyft just like any other business. Having a taxi medallion hasn’t prevented local cab companies from discriminating. http://www.oregonlive.com/portland/index.ssf/2014/07/lesbian_couple_sues_broadway_c.html

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  • Eric August 12, 2014 at 9:19 pm

    I also have to fly for work quite a bit. I use Radio for rides to the airport. Always punctual, friendly and professional. Then I use Uber if possible wherever I go because they’re even better than Radio. It’s truly an elevated experience. Then I get back to PDX and wait in the shitty queue and end up in a horrible crown Vic with a horrible driver that makes me car sick. I love Uber, AirBnb, and GetAround. The future is now. If capitalism is so great, it should all work out.

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  • fredlf August 13, 2014 at 10:02 am

    Businesses like Uber and AirBnB are the natural consequence of the gutting of the middle class.

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  • Jim August 13, 2014 at 1:57 pm

    Lyft might be worth checking out, but Uber is becoming mafia like in their business practices: http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/index.html?hpt=hp_t2

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  • pdx2wheeler August 13, 2014 at 3:28 pm

    Last time I tried to get a cab out to NoPo it was a NoShow! Gave up and drove myself to my holiday x-mas party, where drinking was occurring… Basically, our city fosters a system that almost encourages drinking and driving.

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  • MICHWEEK August 13, 2014 at 8:42 pm

    Just some food for thought here. I have friends in Madison, WI. They successfully kicked Uber & Lyft out of their town. Here are some links,

    http://www.youtube.com/watch?v=srJLxniJiS0

    http://goo.gl/6PwErg

    http://www.isthmus.com/daily/article.php?article=42766

    http://www.thebolditalic.com/articles/5580-uber-charges-osl-fans-470-dollar-for-a-ride

    The discrimination is what irks me most – taxi companies are required to have wheel chair accessible vehicles who makes sure that Uber always has one available? The unregulated cost to the consumer, insurance, and tax scheme also bother me, who’s paying for all that wear and tear on the road? We can’t even ban studded tires, what do we need with several more cars for hire on the road? I appreciate and use sites like Couchsurfers.com and Warmshowers, but I don’t pay to stay at those places, they don’t make a profit other than some ad money.

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  • John Lascurettes August 14, 2014 at 9:40 am

    For anyone that thinks Uber is a “fair market” player: http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/

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  • John Liu August 14, 2014 at 11:24 am

    Just started wondering . . . maybe I am missing something . . . what is the connection of this topic to bicycling?

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    • Michael Andersen (News Editor) August 14, 2014 at 11:49 am

      Two main connections: the liability issue (under the current situation, you definitely do not want to be hit by a car that is on its way to pick up a fare) and the possibility of significantly improving car-lite life.

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