As the battle continues between local cab companies and ridesharing services, a new proposed set of regulations could change the way businesses like Uber and Lyft operate in Madison.
Ald. Scott Resnick, District 8, said he hopes these regulations will provide safe service to all Madison residents and create an even playing field for all rideshare companies in the city.
The proposed regulations would allow for Uber and Lyft to operate below 24/7 for the first year, then require them to provide 24/7 service in the second year. The proposal would also require service coverage for the entire city of Madison, a $1 million insurance policy at all times in liability and a ban on surge pricing, Resnick said.
Resnick said with Uber and Lyft’s current business models, the services would not be able to legally operate in Madison under the proposed guidelines since they use surge pricing and do not operate 24/7.
“The taxi companies want a fair playing field, and right now there is quite a bit of mistrust in that while [Uber and Lyft] have been operating, they have been operating illegally,” Resnick said.
Phil Anderson of Green Cab said he believes the regulations are a step in the right direction. However, he also said there is no way that “pseudo cab companies,” such as Uber and Lyft, will be able to follow the proposed regulations.
Anderson said even if regulations were passed, it is unlikely that Uber and Lyft would change the way they operate to follow them.
“The changes in the regulations really aren’t that substantive, so there might be some change in how business is done in Madison with existing cab companies, but [Uber and Lyft] aren’t going to comply,” Anderson said.
For Uber and Lyft to operate legally, regulations would have to be substantially altered and the companies themselves would have to change their whole business models, which is an unlikely occurrence in this market or any market, Anderson said.
While the proposed regulations are currently only being dealt with on the city level, the city is not the only body that can regulate taxi companies. It is very likely that the state government will get involved, Resnick said.
One of the key pieces of the proposed regulation is the requirement of a $1 million insurance policy for Transportation Network Companies, such as Uber and Lyft. Because the commissioner of insurance works through the state Legislature, if these regulations were to reach the state level, this would be a hurdle for TNCs to overcome, Anderson said.
Along with the insurance requirement, the proposal would also require a ban on surge pricing. This practice of raising rates during peak business hours recently made news when one Uber customer was charged over $360 for a 20-minute cab ride in South Carolina.
“The city wants residents and tourists to be able to count on prices,” Anderson said.
Surge pricing has been a controversial practice in the past, but these regulations hope to eliminate it completely. In earlier versions of the regulations, Resnick proposed a limited use of surge pricing. However, this was ultimately turned down by the city subcommittee.
Currently, with the way that all rideshare companies are operating in Madison, Anderson said the playing ground is greatly skewed with Uber and Lyft operating illegally and largely unregulated, while traditional taxi companies are bound to the regulations of the law. Creating a level playing field has been one of the biggest goals of the proposed regulation, Anderson said.
“We welcome the competition, but it has to be on an even playing field,” he said.
