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.
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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.”