Uber poses problems for taxi companies

LITTLE ROCK — Uber drivers are creating chaos on the streets of Fayetteville, Northwest Arkansas taxi companies said at a hearing Wednesday on state regulations proposed to govern Uber and other ride-sharing companies.

The state’s two largest airports, Bill and Hillary Clinton National Airport/ Adams Field in Little Rock and Northwest Arkansas Regional Airport in Highfill, also formally repeated their request exempted from the regulations not allowing them to charge fees to transportation network companies, whose users summon a ride using a smartphone app.

It was all part of a 2 1/2- hour hearing before the three-member Public Service Commission. The commission took no action, but is expected to issue regulations within the next two months. The regulations

must pass a legislative review before they become final.

The proposed rules follow Act 1050 of 2015, which became law in July, require ride-sharing technology companies to pay an annual fee of $15,000 to the commission and establish requirements for drivers. Independent verification the drivers meet the requirements would only happen if the commission investigates complaints or through an annual audit of company records.

Act 1050 requires state and national criminal-background checks be done on prospective drivers, as well as a driving history report. A company cannot accept a driver if the driver has been convicted in the past seven years of driving under the influence of drugs or alcohol; fraud, a sexual offense, using a motor vehicle to commit a felony, a crime involving property damage, theft, acts of violence, or acts of terror.

In the public comment period at Wednesday’s hearing, operators of three taxi companies in Northwest Arkansas said Uber drivers were threatening the viability of their businesses, working only the busiest times of the week — such as on weekend nights on Dickson Street in Fayetteville and University of Arkansas football games — and have become a taxi service without meeting any of the regulatory and insurance requirements the cab companies must meet.

Brice Curry, who operates Dynasty Transportation, which includes a cab company, urged the commission to allow cities to regulate ride-sharing companies. They cannot do that under Act 2015.

When Curry started taxi service in Fayetteville about 10 years ago at the urging of others, he said “I was promised … my company would be protected.”

Instead, Uber drivers as young as 19 are using Facebook and Craigslist to advertise their services with none of the investment in equipment, drivers and technology required of him.

“They are not to accept cash, but they do,” Curry said. “They are not to hail rides, but they do. They are not out during the week days because they know it isn’t busy.”

Dynasty Transportation cabs rely on busy weekends to carry them through the week, where they serve senior citizens, people who are disabled and veterans, most of whom don’t have a smartphone and won’t be able to rely on ride-sharing companies if Dynasty Transportation goes out of business, he said.

Stu Larrabee, who says he operates a “luxury-class” taxi company, said Uber drivers congregating at certain venues are creating “extreme confusion” and “massive traffic congestion.”

He also cited instances of Uber drivers using vehicles licensed in other states and making side deals for rides not using the Uber app.

Under questioning from commission members, William Guernier, general manager of Uber-Arkansas, said using vehicles licensed in other states is permissible under the proposed rules. Uber-Arkansas operates under a Delaware-registered company called Rasier LLC, which is a wholly owned subsidiary of Uber Technologies of San Francisco.

Any vehicle that draws a passenger complaint and is confirmed by the company would be “de-activated” until the complaint is “rectified,” he said.

Uber drivers would be “de- activated” if they are found to use their vehicles for ride-sharing that wasn’t through the Uber network, Guernier said.

He also said Uber has a contract to operate at Clinton National but not XNA. Both airports sought and were allowed to intervene in Wednesday’s hearing.

Officials with both airports say they are required by federal regulations governing their operations, in exchange for millions of dollars in federal grants over the years, to be as self-sustaining as possible and charge fees where appropriate to commercial entities using their airports. And if they are charging fees to taxis, in fairness, they must charge ride-sharing drivers.

At Clinton National, taxis are charged $2 per trip, the same as Uber drivers would be charged under the airport’s agreement with Uber, which airport officials say will be in place regardless of what the commission rules because the agreement was entered into voluntarily.

At XNA, nine transportation companies registered are charged a monthly $150 fee. But XNA director Kelly Johnson said her airport is in the process of revamping the way they charge transportation companies and plan to change to a per-trip fee.

To some degree, the airports also must be allowed under Act 1050 to regulate ride-sharing companies using their property because of the operational and safety challenges they can present, Johnson and other airport representatives said.

One day at XNA, there were four Uber drivers parked at the terminal curb, including one for longer than 10 minutes, Johnson said, adding the Uber vehicles were taking up “vital space” and the airport lacked the law enforcement personnel to deal with those issues as well as their other responsibilities.

Taxis have their own stand that is several traffic lanes away from the curb, Johnson said.

In response to questions from commission members, Ron Mathieu, the executive director at Clinton National, said the airport would pursue a change in the law at the next legislative session.

Asked by commission chairman Ted Thomas if the airports would be happy if the commission didn’t address the issue in their final rule, Mathieu said his concern was such silence might tell other ride-sharing companies they don’t need to have an agreement to operate at the airport, he said.