Uber, Lyft devastate local taxi companies

Pictured above is a vehicle from Poughkeepsie’s local company, B & B Taxi, which is owned by Robert Brower. Brower downsized the company as a result of the expansion of Lyft and Uber out of New York City and into New York State. Courtesy of Robert Brower.

When Uber and Lyft launched statewide, New York City was the only area in which they operated. After the companies expanded upstate in June of 2017, Poughkeepsie residents readily took advantage of the apps’ convenience and affordability. Ever since then, taxi companies in Poughkeepsie and elsewhere have struggled to keep up with the competition. B & B Taxi owner Robert Brower, who had to downsize his business because of these developments, stressed: “I’d say [I’ve seen a] 50 to 75 percent drop [in customers], maybe even more. I used to have three or four vehicles, but now I’m down to two. I’ve been losing a lot of money. They took over.”

Transportation Network Companies (TNCs) like Uber and Lyft have been running in NYC under the city’s taxi laws. Back in 2017, Governor Andrew Cuomo and state legislatures negotiated for three months before reaching consensus on a law that would allow TNCs to expand statewide (The Poughkeepsie Journal, “Tentative deal puts Uber, Lyft on fast lane to NY,” 03.30.2017).

Central points of conflict in the deliberations included insurance-coverage limits and local governments’ ability to regulate the industry (The Poughkeepsie Journal, “Tentative deal,” 03.30.2017). The law requires TNCs to provide “group policy” insurance, which covers passenger and driver injuries, as well as motor vehicle damage. Coverage is only in effect while the driver has the app open, is on their way to pick up someone and while driving a passenger (Kenney Shelton Liptak Nowak LLP, “The New “Ride Sharing” Law in New York State,” 12.31.2017). Cuomo and GOP senators also disagreed with Democrats on the monetary limit of insurance coverage to which drivers and passengers could be entitled, eventually reaching a middle ground between their proposal (The Poughkeepsie Journal, “Tentative deal,” 03.30.2017).

They also agreed on an opt-out system, which allows counties to ban TNCs within their boundaries. Assembly Democrats proposed that local governments be allowed to regulate the industry themselves, whereas Cuomo and the Senate GOP pushed for state regulation (The Poughkeepsie Journal, “Tentative deal,” 03.30.2017). A county has to enact legislation that explicitly outlaws TNCs (Luxury Coach and Transportation, “New York Operators Dismayed Over New TNC Law,” 04.19.2017).

Given Dutchess County’s ability to reject TNCs, Poughkeepsie taxi drivers are disappointed that the county created what they say is an unfair system. Hudson Valley Taxi owner Garfield Dyer listed a long set of requirements to which taxi services must adhere in order to operate. These regulations include background checks for the City and Town of Poughkeepsie, drug screening tests, a taxi driver’s license and a fingerprint test. He stated, “All of that costs like $400. We [then] have to get an abstract from the DMV to show you that we haven’t been involved in any major accidents and spend $525 [on insurance] a month per vehicle.”

Upstate taxi companies fought for the state to require TNCs to put potential drivers through fingerprint background checks (The Poughkeepsie Journal, “Cuomo to unveil Uber plan for upstate New York,” 01.27.2017). Uber and Lyft pushed back by pulling out of cities such as Austin that required them (CNBC, “Uber and Lyft hate fingerprinting drivers, but new data show why they might be wrong,” 08.23.2016). The current law requires that potential drivers own a state driver’s license and undergo a background check, but it does not require fingerprinting. Dyer believes the current system is unsafe: “I think that’s why they put us through all of that, to make sure that the passengers are safe. Either level the playing field, or don’t do it at all. If you charge us that much money to operate, then we have to charge the customer even more.”

Although Uber and Lyft may not require fingerprinting, they do expect a similar set of requirements in the hiring process, such as proof of insurance. Lyft drivers must undergo a driving record check by a third-party company for past major accidents and driving violations. To be background checked, Lyft drivers must present their social security number, and Lyft uses a third-party company to screen drivers for criminal violations such as violent crime, sexual offenses and theft/property damage offenses (Lyft, “Driver requirements”). Ubers and Lyfts can charge competitive prices due to their lower sales tax—the amount of money the state charges consumers of the transportation service. TNCs collect a four-percent state sales tax while taxis collect an eight point sixty-five percent state sales tax (Luxury Coach and Transportation, Dismayed,” 04.19.2017).

Contrary to taxi drivers’ complaints about TNC safety, students like Morgan Hayman ’21 tend to be more comfortable riding in Lyfts and Ubers than in taxis. “Whenever I’m at the train station, [taxi drivers] aggressively call at me,” Hayman said. “You come back [from the station] around midnight, and you’re bombarded by people you don’t know. With Uber, you know the name of the person [on the app].”

A barber in the Town of Poughkeepsie, Steven Pinaud, 33, has also had negative experiences with taxi services. He believes taxi drivers should have anticipated competition. “They had a good amount of time to adapt. They saw it coming. [With Uber and Lyft], you see your driver, [and] you see how much you’re gonna pay. It’s technology. Either you get with it or get lost,” he said. Pinaud also indicated that taxi drivers didn’t treat passengers well, emphasizing, “They say [they’ll arrive] in 15 minutes, and then they come in 45 minutes. I don’t feel sorry for them.”

For people like Haley Kardek ’19, using taxi services is about supporting local business and those who better understand the community. “Uber and Lyft are [usually] just another source of income, [but] taxi drivers train and do this for a living,” Kardek said. “They usually seem very eager and desperate for my business, but it also just shows how much they’re hurting from the lack of business, which contributes to that anxiety of not wanting someone to hassle us. We’ve created that sense of desperation to make a livelihood.”

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