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Salt Lake slaps rideshare drivers with $6,500 fines

First Published Aug 07 2014 06:23PM      Last Updated Aug 09 2014 12:48 pm

New high-tech ridesharing services like Lyft and Uber say they are cheaper than a taxi, quicker and friendlier. But Salt Lake City contends they essentially are unlicensed taxi services and is cracking down by issuing expensive tickets to drivers.

"I received two tickets, for $6,500 each," says Angie Palmer, a college student and Lyft driver.

Fellow Lyft driver Amanda Wardell, a single mom who drives for extra money, said "it was pretty intense" when she saw her own ticket for $6,500. "I haven’t made that much driving for Lyft, so there aren’t words to describe how it felt to see that."

The city uses "secret shopper" tactics to ride on Lyft or Uber, then later sends a ticket by registered letter to drivers. David Everitt, chief of staff to Mayor Ralph Becker, said the city has issued 118 citations to such drivers; all but 17 were warnings with no financial penalty.

Everitt said the city has warned the firms that "if you are someone making money providing a ground transportation service, you need a ground transportation license. That’s the way it’s always been in the city." He adds that enforcement keeps a level playing field between the new companies and older taxi and shuttle services.

Meanwhile, Lyft is fighting the tickets, contending it is different than a taxi service and is not covered by current laws. Lyft is providing an attorney for drivers and says it will pay any final fines for them — as it has elsewhere nationally when other cities have similarly challenged the company.

"We will continue to stand strong with drivers and passengers every step of the way, fighting any citations, covering relevant costs and making policy," said Lyft spokeswoman Katie Dally.

How it works » Lyft and Uber provide smartphone apps to connect people who want a ride with nearby drivers who use their own cars. Riders can see how others have rated the driver, what they will charge and when they will arrive. Drivers in turn can see how colleagues have rated the rider. All payments are made through the online app.

The companies do background checks on motorists and reject those with poor driving records or serious criminal backgrounds. They provide $1 million in insurance. The companies keep 20 percent of the fare, but say the driver is the one providing the service.

"Current regulations surrounding taxis and limos were created long before anything like Lyft’s peer-to-peer model was imagined," the company’s Dally said.

Unlike taxi companies that own cars, Lyft allows "community members to put their own vehicles to use to provide rides to others. This is not using employee drivers or employee-owned vehicles. They all use their own vehicles" and are independent contractors generally only driving a few hours a week, Dally said.

Lyft supports regulation, she said, but its own policies often exceed insurance and other requirements set for taxis.

License needed? » Dwayne Baird, spokesman for the Utah Department of Public Safety, said that as far as state licensing is concerned, drivers for the peer-to-peer companies need only a regular driver license.

"It’s no different than if you were to pick up your son’s baseball team in a car pool," with no need for a commercial or chauffeur license, he said. "The only difference is that if you promote commerce, then you need a [local] business license to operate in that commerce."

Everitt said it is clear under Salt Lake City ordinances that "if you are making money driving on the roads, you need a ground transportation license."

However, he said, the mayor’s office plans to propose some changes to the City Council to make life easier for the companies, such as removing a requirement "that unless you are a taxicab company, you have to charge a minimum of $30" and arrange rides at least 30 minutes in advance.



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