When regulating or deregulating a transportation industry be it air travel, boat, train, rideshare, limo, bus or Taxi, government bodies have often over stepped deregulation or insufficiently amended regulations.
The best example of the disaster that this can cause would be the recent city wide taxi deregulation in El Paso Texas which has left the citiy’s taxi providers in a market of complete chaos.
El Paso, like other cities and counties in the US that have recently deregulated taxis in an attempt to compete with rideshares, did not address the simple issues that keep safety and accountability in check.
To properly address the issues of accountability while maintaining profit for the company and a living wage for the driver, the formula is simple.
At Ride Safe we call it the ‘Rational Regulation Formula’.
1- Mandate fingerprint background checks for each driver with the same level of oversight as those conducted for bus drivers, security guards and police.
Record of these background check clearances should be included with a photo ID issued to be posted in the vehicle at all times of operation and also for public record with the assigned regulatory body.
Current municipal systems for taxi regulation in many cities require the local Police Department or a city motor vehicle inspection department to conduct this process.
Instead of eliminating these departments for a county or state wide dereguation process, they should be included as part of the vetting process with the regulator assigned in the new regulation process.
Proper fingerprint background checking eliminates the epidemic issue of drivers found to have criminal records which has plagued the Rideshare industry, as current regulations for the rideshare industry in states like Illinois, Delaware, Michigan and Wisconsin DO NOT require an actual substantiated background check on any ridehsare (Uber or Lyft) driver.
2- Mandate that ALL lease, insurance, warranty, loan or lein holders on any and all vehicles commercially operated must be notified in writing that the vehicle is being operated for commercial usage.
These records also to be publicly available with the assigned regulatory body.
A deregulation that takes vehicle usage notifications out of the realm of the DMV and DOT can expedite the process for commercial operators, however it has lead to a large number of vehicles that are not properly listed for their commercial use AFTER they are sold. Many lease and insurance providers have also been defrauded as vehicles being operated commercially as Rideshares, are not required to be listed on their registration records for commercial use.
3- Mandate that each vehicle must undergo a 16 point inspection no less than four times annually provided either by the regulatory body or at the driver and/or company cost. Record of this to be publicly available with the assigned regulatory body.
4- mandate that each vehicle must display on it’s front, sides and rear an assigned numeric permit sticker indicating compliance and status as a commercial for-hire vehicle for law customer confirmation, law enforcement compliance and verification.
Deregulations that allow vehicle marking to be removed or not required have lead to a large number of crimes committed in both the Taxi and Rideshare markets. A clear numberred marking indicates the vehicle’s assured vetting, insurance and LEGAL operating status as a for-hire vehicle.
5- Mandate that the insurance policy coverage offered by the individual or company CAN NOT be invalidated in any incident of BODILY HARM to the customer or other party struck by the for-hire vehicle by any contract or service usage agreement between the customer, driver and/or taxi company.
Currently all rideshare companies in the US as well as several deregulated taxi companies use usage agreements with their customers which invalidate proper insurance coverage.
Uninsured operations and fraudulent insurance loopholes create a significant cost to the general public in unpaid incidentals and damages.
It is often an issue with many forms of deregulation that a system of welfare arises from a lack of accountability required by the company and service providers (drivers).
6- Boundary lines
If an entire county or state area is deregulated, a system of boundaries should be established between cities. If a taxi company from one large city can suddenly operate state wide, they will move into other cities and begin a process of over saturating the market of another city until the local taxi companies of that city no longer profit.
This would serve to better expedite service during busy times, however it would also lead to a lack of effective wages for the drivers and leave the market far less served during slow times.
Local taxi company owners have a right to the market’s they have build and grown in.
Without an effective regulation for taxi providers to respect boundaries then there would be no premise or ability for any local company to remain in business if they were to be displaced by another company’s fleet from a different city.
Effects of deregulation for rideshares in Wisconsin.
After documenting the flaw in driver registration with Uber and several cases of drivers on the Uber platform with dangerous criminal records, driving dangerously and operating without proper insurance, Ride Safe submitted an official complaint to DSPS.
The summry of the DSPS complaint process and resulting communications and materials begin on page 20 of this document, submitted to the Wisconsin state Assembly by Ride Safe during a hearing to consider deregulation of the taxi industry in Wisconsin.
Not only did DSPS take over FOUR MONTHS to process this complaint but the department took no action.
Even after a letter was sent from Uber’s legal representatives making claims that contradict many items of the Wisconsin state law concerning Rideshare operations.
In the Document, Rasier’s legal representative G. Scott Binnings states:
1. Rasier does not allow prospective drivers to access the Uber app without required documents.
However the very next item that Mr. Binnings argues in the same document:
2. Rasier maintains insurance policies that cover activity on the Uber app in the amounts required by state law; these coverages are not premised on participating drivers’ obligations on their personal insurance policies or under leins.
Ride Safe had already proven that Uber accepted THREE separate falsified documents INCLUDING a falsified insurance and state DMV vehicle registration. The original documents and approval from Uber to operate on the app were included in the original complaint to DSPS which MR. Binning is addressing in his response letter.
Though Uber requires the submission of documents and claims insurance coverage, the liability and veracity of any and all claims and coverages can be invalidated not only by the liability scheme between Rasier LLC and Uber but also the contracting terms in the Uber Driver contract and customer usage agreement.
From the Uber customer usage agreement:
LIMITATION OF LIABILITY.
UBER SHALL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST DATA, PERSONAL INJURY, OR PROPERTY DAMAGE RELATED TO, IN CONNECTION WITH, OR OTHERWISE RESULTING FROM ANY USE OF THE SERVICES, REGARDLESS OF THE NEGLIGENCE (EITHER ACTIVE, AFFIRMATIVE, SOLE, OR CONCURRENT) OF UBER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Though clear communication with supporters of the Rideshare legislation in Wisconsin has been difficult, Ride Safe was able to have a conversation with a State senate staff member concerning insurance liabilities and fraud. This conversation was recorded after Ride Safe was invited on the Mich Henck show for an interview.
At time code 25:22 in this video, Mike Mikalsen, an assistant to Wisconsin State senator Stephen Nass claims that his office has validating documents that prove Uber and Lyft are responsibly handling insurance liability.
Two nights ago WATO (Wisconsin Association of Taxi Owners) held a vote among their members concerning support for the legislation SB759 that was considered by the Wisconsin state senate today at the capital in a public hearing.
SB759 is the senate counterpart bill of AB918, the state assembly bill that was passed for consideration by the Senate and governor for final passage into law.
BOTH bills are a deregulation of taxi industry standards that would lower taxi operations to the same uninsured, unregulated and unaccountable standards as Rideshare/TNC companies are currently allowed in Wisconsin.
Obviously any professional Taxi or Limo provider would not support such a law but one Taxi company which is Wisconsin’s largest, TaxiMKE of Milwauke, was in support of the bill.
TaxiMKE is also a WATO member company.
This was NOT what Gary Goyke (WATO’s primary legislative and public representative) wanted but as it is his role to represent for WATO (Wisconsin Association of Taxi Owners), he is now forced to take this position against his own better judgement and what SHOULD have been the principals of WATO to protect accountability and ethics in the taxi industry.
I have known Gary and worked with Gary for just over a year now.
WATO had me as their key note speaker at their annual meeting last year during the Wisconsin Public Transportation Association’s Annual convention.
Until yesterday, I had no reason to doubt or question WATO’s intentions to preserve safety and accountability in the Taxi industry.
WATO is the oldest organization for Taxi owners still operating in the United States.
At the WATO meeting here in Madison two nights ago, TaxiMKE/American United Transportation (of Milwaukee) essentially bullied WATO and other members into supporting the taxi deregulation bill.
This resulted in an open statement to legislators submitted by WATO in support of the bill.
Since WATO’s decision to take this route, several taxi companies have left WATO and have requested representation from Ride Safe.
As tempting as this is, Ride Safe can not represent FOR any specific business or industry in transportation.
Ride Safe represents for safe and accountable transportation FOR the well being of those using the services and those working for the services.
Ride Safe must always account for the public’s best interests, labor ethics and safety first and ALWAYS.
Ride Safe is also a non-profit organization and must remain so in order to provide an unbiased service in the best interests of safety and ethics.
HOWEVER, Ride Safe CAN organize with taxi companies, states and cities to defend and preserve safe and accountable transportation.
Especially when laws exist that actually promote fraud and unsafe transportation.
WATO is no longer a taxi organization, TaxiMKE and the companies gong along with them to establish this deregulation are no longer a taxi companies.
If the proposed legislation passes or not, they will still not be.
They didn’t even have to go this far. WATO could have simply remained neutral. Respecting at least SOME level of ethics on the issue, given this law destroys ANYTHING ethical in the taxi industry.
But they chose to take a vote on it and be bullied into ignoring ethics and encouraging fraud and malice in the taxi industry.
I have already reached out to taxi companies through out the state who are all on board with forming a new inter-city co-op if this law is passed.
Ride Safe can file for ALL taxi companies through out the state on ONE registration with DSPS if this law passes. That will mean that instead of $248,000.00 in registration fees to DSPS, they will get only $5000.00. The cost to each company to register in this way would be less than $40.00 for up to 50 or more.
The new law would actually allow this AND allow each company in the umbrella registration to retain their ownership and administration.
Thus bankrupting Scott Walker’s baby doll “regulation company” DSPS that does not actually regulate any businesses it is supposed to or protect customers.
THEN taxi companies can also lower insurance rates by sharing co-op insurance policies (also allowed under the law) and form a state network of dispatch offices to coordinate inter city travel and operations.
Without city borders (also eliminated by the proposed law) taxis will have to respect each other and coordinate if they are to survive the pact that TaxiMKE is likely to form with Uber or in their own twisted version of Rideshare through out the state.
This will mean that taxis will need to unify portions of their fleets and coordinate between each other fairly, with respect to each other and with respect to the public.
Instead of crushing local cab companies in smaller cities like taxiMKE plans to, taxis from other areas will coordinate with local and rural taxi companies to trade off street hail and call service so ALL can run calls, make fair wages and also ensure that taxi lanes are full of only SAFE, VETTED and INSURED vehicles, instead of TaxiMKE or rideshare vehicles.
The coordinated combination of availability to the public curb side at busy hours, healthy call service to ALL without bias and paratransit will be the defining factor of the victors in this coming chaos.
WATO just threatened that ever happening and companies like TaxiMKE think that if they drop insurance, vetting and play dirty in the streets, they will put smaller companies out of business, get a buy in with Uber to take over the state and buy out other taxi companies.
As Ride Safe has told the industry for over four years now, TOGETHER YOU can stop this and build a better, safer and more profitable market FOR ALL.
After all, the legislators presenting these bills (AB918 & SB759) Like state Assembly representative Daniel Knodl and state senator Stephen Nass have been very outspoken in claims that these bills would return a “level playing field” and “fair trade” to the state’s taxi industry.
A taxi industry that has, like many through out the US, suffered losses trying to compete with a grotesquely deregulated and statistically more deadly rideshare/TNC (Uber & Lyft) market.
These particular bills are the first of many proposed laws likely to pass in Republican controlled states through out the US in a bid to make taxis more like Rideshare/TNC companies.
In recent years there have been other taxi deregulation proposals and even a few laws passed in states like California and Michiganto deregulate taxis. However these other laws differ greatly from the current proposals in Wisconsin. Mainly because that unlike the currently proposed Wisconsin legislation, they comprehensively address customer safety and driver background checks while SB759 and AB918 completely throw them out the window into a lane of on coming traffic.
This is a move many taxi companies in Wisconsin do not agree with as they would no longer have accountable insurance, background checks on drivers or a fair means of competing with larger taxi companies poised to cherry pick their markets through out the state.
Under the proposed laws, Taxi companies through out Wisconsin would be forced to compete with taxi companies like Milwaukee’s TaxiMKE(American United Transportation Group) who actually desire to operate without comprehensive insurance and background checking standards for their drivers in order to save money.
Because the new laws would also eliminate any and all restrictions on where any taxi company can operate STATE WIDE, companies with large fleets like taxiMKE will be rushing into green bay on busy Green Bay Packer game nights to cherry pick street hails from the local taxi companies in that area.
**NOTE, the evidence presented by Ride Safe appears in the legislative documents AFTER a petition submitted by TaxiMKE administrators and their drivers in SUPPORT of the proposed legislation to deregulate taxis.**
DSPS is the state regulator currently administrating all rideshare regulation in Wisconsin AND slated to become the state’s one and ONLY Taxi regulator if the proposed legislation passes.
The reason Uber and lobbying fronts like the AFP support the establishment of state wide/no border operations, lowered vetting standards and eliminated insurance standards for the taxi industry is because it appeals to the rideshare model of doing business.
It also opens the door to a desperate attempt by Rideshare companies to take over other transportation markets as the rideshare market has been failing consistently in recent years.
This trend with Uber has been leading a world wide failure of sutainability with the so-called “GIG” or “On Demand” economy and job market.
Other “On damend” or “GIG” ventures such as Amazon Flex, Postmates, Door Dash, GrubHub, Task Rabbit, UberEats, and AirBNB have all reported major losses and financial disasters as a result of uninsured operations, assaults on customers by poorly screened service providers and an over all lack of integrity or accountability in their business models.
Rideshare companies are also being plagued by another costly menace, THEIR OWN DRIVERS
In recent months Ride Safe has collected several advertisements from the social net that indicate a new trend which we have dubbed “Kyotes” after the term for border smugglers. Adding a ‘K’ in place of a ‘C’ to mimic the naming practices of “GIG” companies like Lyft.
Kyotes are Rideshare drivers who take Illegal cash hails, arrange rides and payment outside the apps and in some cases operate their own fleets of Uber and Lyft vehicles on fraudulent sublet deals with drivers who are in most cases not even registered on the app themselves but instead use the Kyote’s Uber and/or Lyft account to operate.
A growing trend with Kyotes is avoiding registration on any app all together and simply offering rides on the facebook marketplace.
The reason Rideshare drivers have been flocking to illegal operations outside of the apps is simple. There are to many of them saturating each market.
With a saturated market, drivers get far less fares per hour. Add the issue of only being able to arrange rides through an app and no requirements for proper vetting, insurance or even vehicle marking.
Rideshare drivers aren’t just encouraged to seek out illegal work, they have been primed for it with low standards of regulation, zero required accountability, no cap on the number of vehicles operating and an already fraudulent contracting agreement which they religiously ignore even reading themselves.
The number of drivers on the Uber and Lyft platforms with criminal records found by ride Safe and other media outlets indicates that Rideshare is the perfect work opportunity for the criminally minded.
Until now Taxi companies have been able to survive total eradication from rideshare operations mainly because they are accountable, insured and have drivers who can pass a fingerprint background check that is in most cases done by a local police or sherrif’s department.
They also offer service to those without cell phones, the disabled and areas of any given city that may be very low income without bias as many municipal laws mandate them too.
With the passage of AB918 and SB759 these requirements would no longer exist and any incentive to provide service to areas of low income, distant rural areas and the disabled would no longer exits because Taxi companies would no longer be competing for those customers but rather the same customers Rideshare/TNC companies exclusively compete for.
The effects of the law
Ride Safe will of course experience an IMMENSE amount of new work this legislation will create through more uninsured wrecks, deaths, fraud and assaults on customers that will now be committed by TAXI companies and their drivers through out the state. Exactly like their Rideshare/TNC counterparts have been doing these last four years in Wisconsin.
This is not the work that Ride Safe had intended to face.
It is Ride Safe’s mission to protect consumer interests, safety and the ability of drivers to provide a safe ride while also making a fair living doing it.
AB918 and SB759 directly conflict with that mission.
Representative Knold and Senator Nass have not offered a solution to the Taxi industry in Wisconsin, they have handed it a death sentence while introducing a new realm of crime and insurance inflation to the tax payers of Wisconsin.
Companies like TaxiMKE will soon come to realize that this legislation was not designed for them as Uber and Lyft will now have a clear path to becoming taxi companies and also offering rideshare service at the same time, state wide.
Any Taxi companies trying to exploit the new laws will attempt to cherry pick street hails in other cities through out the state as well as their own traditional territories while Uber and Lyft increase their own fleet sizes by offering street hail only “taxi” service. With no requirements for vehicle type, proper vehicle inspections and a regulatory body (DSPS) that doesn’t actually regulate or audit anything, Uber and Lyft will be able to fill these new “taxi” rank services with existing drivers in their own vehicles.
Smaller Taxi companies will survive more or less on keeping to traditional service routs and standards for providing service to all regardless of income, race or disability but it will come at a severe cost in fleet sizes and availability.
The congestion that will be caused by this will turn most major roadways through out Wisconsin into teaming gridlocks that will rival the bustling streets and outer loop highways of New York and LA on busy nights and during games.
It is an almost futile hope at this point that the Republican lead legislation of Wisconsin will see reason and end this legislation.
If the legislation does pass, Ride Safe will continue the fight to protect the public in Wisconsin as with anywhere else. Most Taxi companies in Wisconsin DO NOT want this legislation and have vowed to maintain SAFE and INSURED operations regardless of incentives not to in these laws.