By Lindsay Street, Statehouse correspondent | What’s the difference between a radio and a smartphone app? A whole set of regulations depending on which kind of for-hire transportation service you use.
“It’s not a fair playing field anymore,” independent taxi driver Larry Smith of Charleston told Statehouse Report. “We can’t compete.”
Three years ago, the state enacted Uber-backed legislation that treats ride-sharing companies differently from the existing taxi companies.
More than $1.7 million in revenues have been reported from Uber and Lyft in the state since 2016. During that time, taxi cab drivers say their business has suffered under the difference regulations applied to the similar businesses, stifling one while allowing another to flourish.
Now, at least one lawmaker wants the state to reexamine how the state treats for-hire transportation.
“I’m all for fairness. I think everybody should be treated the same,” said S.C. Rep. Wendell Gilliard, D-Charleston. “Nobody should have priority above the other.”
A look back
State regulation of for-hire transportation services falls under the Office of Regulatory Staff, a utility public watchdog. In the transportation department, Tom Allen fields phone calls from taxi drivers upset by the double standards.
“They’re very bitter about Uber and Lyft. They can’t understand why they have to abide by these regulations and why Uber and Lyft have a different set of regulations,” said Allen, director of Safety, Transportation, and Emergency Response. “My response to them is, ‘I don’t disagree with you but I think you need to lobby the legislature for less regulation to make you more competitive.’”
Lobbying the legislature is exactly what the app-using transportation services did in South Carolina and across the country as Uber expanded operations.
The Transportation Network Companies Act (TNC) was passed in 2015. According to University of South Carolina Law Professor Bryant Walker Smith, who studies the ride-sharing industry, the law reads similar to those enacted in other states and supported by Uber.
Gilliard and S.C. Rep. Raye Felder, D-York, were the only members of the House to vote against the TNC, which passed final reading 96-2. The Senate passed the act unanimously and it was signed into law by then-Gov. Nikki Haley.
“I knew it was going to have a major, major impact as far as the mom-and-pop (taxi service) longevity and, evidently, I was right,” Gilliard said.
The law established a minimum insurance requirements for companies like Uber, requires background screening standards for TNC drivers and fare transparency, electronic receipts and ease of identification of TNC vehicles and drivers.
The difference in regulations between the two entities are essentially this: Ride-sharing companies conduct their own background checks and regulate their drivers. Taxi companies, however, are directly regulated by the state, according to Allen. Uber and Lyft are also not beholden to permits and caps by municipalities, though they do provide a share of their earnings to them. Insurance requirements also vary among the models, Smith said.
Smith called the taxi business model the “legacy” and the ride-sharing business model the “disruptor.”
“They were pretty astute to describe themselves as something differently,” Smith said. “What these companies do is that they facilitate the provision of commercial rides … (But) they had political power that the taxi cab companies did not have or did not exercise. That’s the political realistic explanation as to why we have two different regimes.”
Uber spokeswoman Evangeline George of Atlanta released this statement at the request of Statehouse Report on the state’s current policy governing ride-sharing companies.
“Communities benefit from more choices, and Uber offers South Carolina residents both a reliable transportation option and a flexible work opportunity. More than 40 states across the country have passed statewide ridesharing frameworks similar to the one in South Carolina, outlining requirements and background screening standards for Transportation Network Companies.”
Levelling the playing field
Gilliard said he doesn’t have a solution in mind, but he said South Carolina should address the issue.
“I’m a strong believer in when you don’t get it right, you go back to the drawing board,” Gilliard said.
He wants to establish a subcommittee in the House to study the policy and legislative options.
“We have statistics. We know about the mistakes. So you come up with a better plan and compromise,” he said. “You can create a level playing field … That will take sitting down and compromising and making it work for everybody.”
Across the aisle and in the other chamber, S.C. Sen. Paul Campbell, who serves as executive director of the Charleston County Aviation Authority, said that while he sees taxi drivers’ plight, he’s not sure it’s a legislative fix but rather the market at work.
“I feel for (the taxi drivers),” Campbell said. But, he added, “We can’t tell a passenger they can’t use Uber.”
For Smith, the solution is simple.
“We should treat like things alike,” he said.
He said Finland has enacted legislation that solves the dilemma of treating the businesses differently. He described their new law on mobility as a service as:
“We really don’t care what you call yourself or how you’re transporting people, if you’re transporting people then this law applies,” Smith said. “If South Carolina adopted something like that, it wouldn’t matter if you were a (transportation network company) … or if you were even providing flying car service, you would be subject to the requirements of that law.”
Allen said he would like to see taxi companies moved under the TNC act.
“The regulatory requirements are about right (on Uber and Lyft),” he said. “The taxi and the other for-hire services could probably stand to lessen some of the requirements.”
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We Can Do Better, South Carolina!
This article is incorrect in stating that taxi drivers incur steeper insurance costs. Rideshare companies must purchase $1MM in liability and uninsured motorist coverage while taxis typically offer less than 250k in coverage. Higher limit coverage costs more.
This also means passengers and third parties are more protected in rideshare vehicle accidents than in taxi accidents.
Shuttle and taxi driver’s are out of control. A ride from the airport to Summerville cost our family approximately $100, a lot more than an Uber ride. Because we were on the last flight into Charleston for that night, shuttle operator gouged us because they knew our choices were limited.