When Garry Goldberg looks to hire a new taxi driver, he says he not only schedules an in-person interview but also performs an unrequired background check on the applicant.
For Goldberg, the owner of Cherry Hill-based Best Taxi Inc., it would be a dangerous prospect for the industry to consider doing it any other way.
“I sit down to hire somebody, I sit across the table from them,” he said. “I look into their eyes (and) I’m able to see and get a feel for what kind of person they are and to see if I’m comfortable with them.”
That’s unlike the format favored by San Francisco-based ride-sharing companies like Uber and Lyft, which also perform background checks but simply require most licensed drivers to fill out an application online and download a necessary app before getting started.
“In this case, this is all done through the Internet and there’s no person-to-person contact in terms of the hiring process,” Goldberg said.
If Uber and Lyft were made to follow the same regulations that his and other taxi companies face, he said, he’d have no choice but to accept it in the name of competition. But Goldberg said that the ride-sharing model, which is currently unregulated in New Jersey, poses not only a threat to his business, but he argues it’s a safety hazard as well.
“You don’t know really who’s picking you up,” he said.
State lawmakers seem to share his concerns over safety.
Last month, the Assembly Transportation Committee voted to release a bill that would impose a slew of new regulations on ride-sharing companies, such as having the state Motor Vehicle Commission issue an “identifying marker” to every driver that must be displayed when the vehicle is active, requiring all drivers to undergo background checks and mandating that necessary insurance coverage is in place for all working vehicles.
The bill, sponsored and pushed by Democrats, is being put forth in the name of safety.
“I respect all the transportation network companies and I think their technology is innovative, and they have a real approach to business that I think is something that we should all embrace,” said Assemblyman Troy Singleton (D-Mount Laurel), a bill sponsor. “That being said, I think what we’re trying to do is really set some reasonable parameters with respect to regulation in our state.”
Singleton added that the goal is to “find something that strikes a reasonable balance between innovation and public safety.”
Uber and Lyft have initially pushed back on the bill, saying the regulations go further than those imposed on commonplace taxis.
That’s not to say these companies don’t want to be regulated at all. They just don’t want to have excessive restrictions placed on them that threaten their industry’s future.
To be sure, the stakes are high.
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Uber now boasts some 5,200 drivers in the state and projects that number to jump to about 10,000 by the end of 2015. Lyft did not offer specific driver data but a spokeswoman noted that there were “hundreds” of drivers across the state.
For regular taxis, background checks come in at the municipal level. Not only are the state-imposed checks on ride-sharing companies excessive, but they’re unnecessary, Uber spokesman Matt Wing said.
Wing said his company’s in-house background checks, which involve a three-step screening process that looks back seven years into a driver’s past, are already tougher and more effective than anything the state is proposing.
Add on to that the potential for drivers to fall into a “bureaucratic wormhole” as they attempt to comply with state regulations.
“We feel strongly that our check is the best in the industry and is more effective and efficient than a government-run check because a government-run check is inconsistent and it’s unreliable,” Wing said during a recent editorial board meeting with NJBIZ.
And some Uber representatives are not so sure that safety is the only concern driving the bill.
“The industries that we are disrupting — they’re entrenched,” said Josh Mohrer, Uber’s general manager for the New York and New Jersey area.
When the bill appeared in committee last month, a swarm of Communications Workers of America protestors took to Trenton in support of the measure, carrying anti-Uber signs with messages like “We don’t need Uber” and “Uber is taking our jobs.”
“The protests aren’t ‘Regulate Uber;’ it’s ‘Kill Uber,’ ” Mohrer said.
Wing said he’s not ready to guess each sponsor’s individual motive for supporting the bill, but it’s apparent that there’s more at stake than just safety concerns.
“That’s what those interests want,” Wing said. “Those interests are really happy with what the Assembly has produced. Why that connection exists, is for them to explain.”
Singleton said he’s “disappointed” by the notion that the measure is rooted in anything other than safety.
“There’s no position that I or any member that I’ve spoken to has taken that is trying to protect and preserve one industry over another,” Singleton said. “This is really about trying to just set reasonable standards.”
Nicole Benincasa, the policy representative for Uber in New Jersey, added that in all of the company’s dealings thus far with state legislatures, the experience in New Jersey has undoubtedly been the “worst.”
The bill didn’t start as a regulatory nightmare for Uber, but Benincasa said that with each revision, more provisions were added.
Uber has repeatedly said that it could be forced out of the state if the bill were to pass and be signed into law as currently written.
“We were hopeful for a very long time that this would go back in the direction that it was originally intended (to), but we’re not so sure anymore,” Benincasa said.
Lyft spokeswoman Chelsea Wilson said it is important to remember that “it’s still pretty early on in the process.”
Wilson said that “ride-sharing is new to a lot of places” and that because these services are different than taxis, further discussion is needed to explain why new rules are needed.
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Around the same time as last month’s Assembly committee hearing, Uber and other ride-sharing companies reached a deal with a number of major insurance providers that would eliminate gaps in coverage for drivers, who use personal vehicles for commercial purposes.
The potential for insurance gaps has been a major concern of some lawmakers.
Singleton said he was pleased to see news of the deal and is hopeful that bilateral talks will continue.
“I actually think we’re a lot closer today than we were probably at the time of the hearing,” Singleton said.
That’s important because the industry is rapidly growing in New Jersey.
Mohrer said that Hudson County has long been the company’s stronghold, but that operations are also ramping up all across both North and South Jersey. Uber plans to open a Hoboken office, the first of its kind in Jersey, on Washington Street later this month.
“Hoboken is really one of our hottest ZIP codes in the entire country from a population density perspective,” Mohrer said. “We’re also growing fast in Essex and Bergen. Really, this is a service that we see being used throughout the state.”
It’s difficult without any real data to really quantify what kind of economic impact the ride-sharing industry has on the state, but according to Uber figures, the company’s New Jersey drivers, who all file 1099 forms, are currently earning about $46 million annually. The average Uber driver in New Jersey earns about $300 per week for 15 hours of work.
For optimism, Uber representatives draw on another recent case of innovation versus regulation in New Jersey.
Last year, electric carmaker Tesla, which uses a direct sales model, saw its operations in New Jersey effectively put on hold after the state Motor Vehicle Commission ruled in favor of traditional, dealership-based sales.
Similarly, the case brought out calls of politicians and special interest groups getting in the way of the future. The Legislature then took up the cause, worked with Tesla and crafted a bill permitting its operation that was signed by Gov. Chris Christie last month.
Wing said that, like Uber’s case, it represents a pushback against the logic of doing something simply because it’s the way it’s always been done before.
“Tesla is the same story with different characters,” Wing said.
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Land of Lyft (and Uber)
According to Nicole Benincasa, Uber’s policy leader in New Jersey, the regulatory bill put forth in the Garden State has proved to be the “worst” the company has encountered.
So, ask both Uber and Lyft representatives what state has the most common sense regulations on the books for ride-sharing companies and the answer is resoundingly the same: Illinois.
What makes the Land of Lincoln so great?
Like New Jersey’s, the Illinois state bill installs background checks and insurance requirements into the ride-sharing framework, but doesn’t stretch as far. For instance, under the Illinois law, Uber and other ride-sharing companies are permitted to conduct their own compliant background checks.
But that doesn’t mean Illinois just welcomed ride-sharing companies with open arms.
Before former Gov. Pat Quinn could sign the bill into law in January, he had to veto a much more stringent version of the bill last summer and reopened the measure for further debate and consideration.
It’s still early on in the process in New Jersey, but ride-sharing companies have yet to find a strong, vocal legislative or administrative ally in the state