Sen. McLachlan Calling for New Protections for Consumers, Riders (CT Post)

May 8, 2014

Article as it appeared in the Connecticut Post

All’s fare: Conn. poised to expand oversight of taxi rival Uber
Powerless when it comes to regulating care-for-hire services such as Uber, which recently expanded its footprint to Fairfield and New Haven counties, Connecticut is poised to adopt rigid new insurance requirements for drivers that holds them to the same set of standards as taxi cabs and limo operators.

Anyone charging for a ride and dispatched by a centralized routing system would be forced to carry livery insurance on top of their personal liability coverage under transportation legislation that is expected to be voted on by the General Assembly before the close of the current session.

The mandate would apply to independent drivers who use their personal vehicles like a taxi service — the backbone of Uber’s multinational network of transportation providers.

Violators would be subject to a fine of up to $500 for a first offense and up to $2,000 for a second offense under the language, which would give the state Department of Transportation a mechanism to seek an injunction from a state Superior Court to stop ride-sharing services from operating.

“So that’s effectively going to shut them down until they come up with a new business model that ensures everyone about liability,” said state Sen. Michael McLachlan, R-Danbury, a member of the General Assembly’s Transportation Committee.

McLachlan is calling for new protections for consumers who utilize Uber, prompted by a recent Hearst Connecticut Media report on the gray area encompassed by car-for-hire alternatives. He urged the state DOT in a May 2 letter to look into its oversight of Uber, which connects passengers with nearby drivers through its popular smartphone app.

“What happens if somebody gets hurt?” McLachlan said. “The business model in Connecticut means that if they crash the car, the passenger is out of luck.”

Backed by Google,Goldman Sachs and the founder of Amazon.com, Uber operates in more than 100 cities and 35 countries — but not without roadblocks from regulators and territorial taxi companies that it alluded to in a statement to Hearst.

“Uber is a new and innovative business model that has not been conceived by many existing regulations,” the statement read. “When we enter a new market, we work to educate policymakers about demand for transportation alternatives and Uber’s technology. But that doesn’t mean we aren’t met with opposition from existing entrenched special interests who want to restrict competition. This amendment is a clear attempt to limit choice for consumers and limit opportunities for drivers.”

A credit card is required to use the Uber app, which gives customers realtime GPS tracking of nearby cars that they can reserve from their smartphone, tablet or desktop computer. The cars are routed to passengers by the same GPS technology, which provides customers with a photo of their driver.

In Connecticut, Uber charges a $3 base fare plus $2.25 per mile or 30 cents per minute in traffic, in addition to a $1 safe-ride fee for its standard car-for-hire service. Fares are automatically billed to the credit card on file, with the driver getting an 80 percent cut and Uber taking 20 percent. Tips are not expected or required.

According to the legal terms section of its website, Uber B.V. is a private limited liability company established in the Netherlands.

“Uber under no circumstance accepts liability in connection with and/or arising from the transportation services provided by the Transportation Provider or any acts, action, behaviour, conduct, and/or negligence on the part of the Transportation Provider,” a section on liability says.

In addition to the General Assembly, the transportation legislation would require the approval of Gov. Dannel P. Malloy, for whom a message seeking comment was left Tuesday by Hearst.

Danbury Mayor Mark Boughton, a candidate for governor who is from the same city as McLachlan, said oversight of car-for-hire services is warranted.

“If someone is moonlighting as a cab driver, I’m sure there’s all kinds of liability issues if there’s an accident,” Boughton said. “I can hear the complaints being filed already about someone being overcharged or someone getting in an unsafe vehicle.”