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UberX Is Killing Cab Industry, Drivers Say

UberX Is Killing Cab Industry, Drivers Say
via Wikimedia Commons

Last week, we reported how in the span of 24 hours, 9,000 Floridians signed a petition to get Uber in Florida. But what appears to be a revolutionary way of melding technology and getting a cab is also a major potential threat to cabdrivers and the taxi industry as a whole.

Uber is basically an app with which you can request a cab or limo driver, then name your price. You can also rate the driver.

Plenty of us know what a pain in the ass getting a cab can be down here in South Florida. So, on the surface, Uber would appear ideal.

But Uber also has something called UberX, which is basically a lower-priced version of Uber that uses midrange cars for ridesharing. And according to concerned cabbies across the state and country, it's going to cripple the industry.

For the moment, in Florida, Uber is available only in Jacksonville. But the Florida Legislature is looking to change that, which is where Uber's petition comes in. And Uber has brought UberX wherever it has gone.

Uber started off with regular licensed drivers in cities such as New York; Washington, D.C.; Chicago; and San Francisco.

"It was like discovering ice cream for the first time," Jennifer Condie, a cabdriver from Palm Beach County told New Times when she first learned of the app. "This is the future, I thought."

Uber then took notice of the success of ridesharing companies such as Lyft and Sidecar.

The problem is, ridesharing services have been widely unregulated. But that didn't stop Uber from launching UberX. The lack of regulation, it would seem, is probably what spurred them on in the first place, according to some concerned cabbies.

A San Francisco assistant district attorney recently told regulators that drivers who are using UberX and other ridesharing companies are committing insurance fraud.

Basically, a rideshare such as UberX, taxi drivers like Condie say, is a threat to public safety as well as to the industry.

The reason for concern is that personal auto insurance doesn't cover commercial drivers. And, according to the drivers we spoke to, Uber has specifically told its drivers not to get insurance.

 

"UberX has regular passenger insurance, taking 20 percent from the driver," Condie says. "But they basically tell drivers not to get insurance, to put it on your personal insurance. But you can't put others on your insurance."

A Chicago-based cabdriver working with Uber, who goes only by the name Joe, tells New Times that Uber held a meeting of taxi drivers in his area several weeks ago. At this meeting, they told drivers that the company does not allow commercial insurance. "I'm sitting in this meeting and they're saying this to us, and I couldn't believe it," Joe says.

The UberX rep at the meeting was peppered with questions about insurance. The drivers, Joe says, were told they would receive more information about it via email. That email has yet to arrive, Joe claims.

Joe's concern is that UberX is opening the door for non-taxi drivers to start giving people lifts around the city for money without proper regulation.

"It's decimating the cab industry," he says. "They're bringing in regular people and telling them to operate as cabbies and not providing them with insurance."

The bottom line is, commercial insurance is expensive. In some states, it can cost a cabbie up to $5,000.

"It basically fucks up their business plans," Joe says. "But if you have a passenger and he gets injured in an accident, where do they file a claim?"

For rideshare companies like UberX, Lyft, and others, there are obvious advantages to having no regulation -- for both the driver and the passenger, it's cheap. And because there is no overhead, a company like Uber has flourished with its UberX service. And Florida could be next.

"The main problem with this industry is communication," Condie says. "I have no problem with rideshare entering our market, but it has to be regulated."

Condie says another app, called MyTaxi, which has been successful in Europe and recently entered the D.C. and Miami markets, is charging drivers only 2.6 percent and $1 per ride. Uber, Condie says, is charging drivers 20 percent for the same technology while not kicking a single cent back to local government, regulators, or the State of Florida.

And avoiding regulations.

For her part, Condie has sent a letter to the Florida Department of Insurance.

"Operators such as Lyft/sidecar/UberX are preying on the nation's dysfunctional taxi system and the fact that city/county/state governments AND insurance regulators are not in sync with each other and have no clue what is going on," her letter says. "The risk of exposure of private insurance is so great due to fraud/abuse it can be market destabilizing."

The bill going through the Florida Legislature to get Uber into the Sunshine State recently passed its first committee.

Send your story tips to the author, Chris Joseph.

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