Legislation currently making its way through the state Assembly and State Senate could clear the way for popular ride-sharing services to begin serving upstate communities.
Uber, Lyft and other “transportation networking companies” (TNCs) use location-based mobile apps to connect riders with drivers. Unlike traditional taxi services, TNCs typically provide a technology platform to drivers who work as independent contractors. The ride-sharing services are becoming ubiquitous in New York City and many other places, but insurance regulations have thwarted efforts to expand the services upstate.
That could change with the passage of bills currently under state consideration. Two bills are being weighed; one would create a statewide regulatory framework for TNC operations, similar to the one in New York City where Uber and Lyft are regulated by the Taxi and Limousine Commission. Another would more narrowly address the issue of liability insurance tailored for the ride-sharing service’s independent contractor drivers.
The insurance issue involves liability coverage for TNC vehicles. Traditionally, taxi and limousine companies carry full-time commercial-level liability insurance paid for by the owners. That model, however, would be unaffordable and unworkable for Uber and Lyft drivers who set their own hours, use their own vehicles and are not officially employed by any company. The insurance bill would create a new type of coverage geared towards independent drivers, which would provide different levels of liability coverage for different “periods” of a TNC vehicle’s operation. For example, the law would set a liability minimum of $50,000 for periods where an Uber driver was alone in the vehicle waiting for a call, but $1 million for periods when passengers were in the vehicle.
Assemblyman Kevin Cahill (D-Kingston) is chairman of the Assembly’s Insurance Committee and the insurance bill’s main sponsor. Cahill said he and fellow lawmakers had spent months meeting with stakeholders, consulting with New York City’s Taxi and Limousine Commission and examining how other states have dealt with TNCs. Cahill said this week the main challenge was to strike a compromise between the ride-sharing business model and the need for a higher level of liability coverage for commercial transportation providers.
“We accept that there’s a demand, but there’s also concerns,” said Cahill. “This is commercial transportation and we always hold commercial entities to a higher standard. What we’ve been doing is a balancing act.”
Uber and Lyft currently operate in every state and dozens of countries around the world. Supporters say that the ride-sharing services fill a need in areas with inadequate or unaffordable taxi service while providing flexible part-time work well-suited to the modern “gig economy.” In New York, the state’s Conference of Mayors has endorsed the plan to bring TNC service upstate.
Uber, meanwhile, has launched its own PR campaign. When upstate residents download the company’s app, they’re directed to an online petition urging Albany lawmakers to pass the TNC legislation.
Locally, TNC proponents say that they see a large, unmet demand for reliable public transportation. Last year, Kali Quinn, a 25-year-old Kingston resident and music venue manager, started an “Upstate Uber Collective” Facebook page to lobby for local TNC service. Quinn said that local cab service had proven inadequate for increasing demand brought by the resurgence of nightlife in Kingston and other Ulster County communities.
“I’ve called cabs for customers and had them wait for two hours or the cab doesn’t show up at all,” said Quinn.
Bar and restaurant owners are among the biggest supporters of upstate TNC service. In areas with limited public transportation, they say, a reliable way for customers to get home after a few drinks could reduce drunken driving and bring in more business.
“Drunk driving is a big issue in the Hudson Valley where you have so many small towns and not a lot of public transportation,” said Quinn. “It’s hard to get people out to clubs and bars.”
But the ride sharing services have also generated controversy. Traditional cab companies say the services — which operate with much lower overhead and little regulation — represent unfair competition. Other critics say that the lack of licensing requirements and background checks for drivers that do not incorporate fingerprint identification pose a risk to public safety. Uber in particular has also been accused of unfair labor practices after turning back an effort by drivers in California to win recognition as company employees rather than independent contractors. Other critics take issue with “surge pricing” policies which can significantly increase the cost of a ride when demand is high. Cahill said that some advocates for the disabled has also expressed concern that expanding TNCs upstate could slow down an initiative to make all taxis statewide handicapped-accessible.
A piece of legislation working its way through the committee alongside the insurance bill would create a regulatory framework to address those and other issues. But Cahill said that he preferred the more narrowly constructed bill. Statewide, Cahill said, he had heard a wide range of opinions about the ride-sharing companies. In places like Albany, where a lack of reliable cab service was a vexing issue, there is high demand for the new service. Other communities, he said, remained wary. Creating a statewide regulatory system, he said, could remove community’s power to establish their own system for regulating TNCs in line with their needs.
“I could give you a hundred reasons why we shouldn’t say [to TNCs,] ‘Here’s a blank check, here you go,’” said Cahill. “But I believe communities should decide for themselves and they can’t decide if it’s not allowed.”
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