Friday, June 20, 2014

#NOLANeedsUber — or does it? Council to take up issue Tuesday

Posted By on Fri, Jun 20, 2014 at 3:44 PM

click to enlarge An image from an Uber launch party earlier this year in Cincinnati, where the service debuted in March. - CREATIVE COMMONS/5CHW4R7Z
  • An image from an Uber launch party earlier this year in Cincinnati, where the service debuted in March.

The kind of language used on social media by devotees of Uber, the smartphone app that connects riders to existing drivers, might make you think they were discussing something much more dire than the potential expansion of a luxury car service into the New Orleans transportation market.

“NOLA deserves Uber,” says Twitter user Joel Galatas, using the now-popular hashtag #NOLAneedsUber, introduced in an email blast by the company two weeks ago. In four minutes, eight more #NOLAneedsUber Tweets come in, all with similar urgent-sounding rhetoric.

“NOLA needs Uber as soon as possible, without price-fixing,” another reads, which is the tweet pre-composed and suggested in the email blast. All these Tweets are directed at members of the New Orleans City Council. It’s a social-media public relations maneuver Uber has used in many other cities, with success.

“That’s one of the really special things about the Uber technology,” says Tom Hayes, Uber’s general manager for New Orleans, referring to the fervor with which supporters of Uber have taken to social media.

Even before Uber had public plans to enter the New Orleans market, it was met with resistance from city officials. There was a now-infamous cease-and-desist letter from Taxi Bureau Chief Malachi Hull (sent to Uber before it even entered the market), and Mayor Mitch Landrieu was tight-lipped in expressing outright support for the service.

Eight months later, it’s a different story. The city is reassessing its existing transportation codes to accommodate the service. But the San Francisco-based company, which operates in more than 70 cities in the U.S. and 37 other countries around the world, including Saudi Arabia, and was recently valued at $18 billion, says it won’t be satisfied until it can operate by setting its own prices, and it’s encouraging its fans to demand the same.

There’s no question that city officials want Uber. Unlike before, however, no one is afraid to admit that.

“One of the reasons we went through this (legislative) process was to allow for this technology to be used,” says Ryan Berni, a Landrieu advisor, speaking to the newly introduced ordinance that would loosen restrictions on limo and for-hire car companies. “Uber is certainly one company; there are local companies that are trying to adapt and innovate and use the latest technology. Yes, we would like for the Uber Black model to be able to be used in New Orleans.”

Uber Black allows riders to hail a luxury sedan or limo from a smartphone. The service is praised in other cities for its reliability, safety and convenience, since a rider can learn about his or her driver, track the car’s progress via GPS and transact payments and tips via a pre-stored credit card without any physical money changing hands. Uber takes 20 percent of the cost of the ride; the driver keeps the rest. Uber SUV offers the same thing, only with bigger cars intended to fit more people and luggage for destinations like Louis Armstrong/New Orleans International Airport.

The City Council’s transportation committee is scheduled to take up an ordinance June 24 addressing Uber and similar services. The ordinance, introduced at a council meeting earlier this month, would create significant changes to the city’s transportation code.

The ordinance, drafted in part by Berni and introduced by Councilmembers Jason Williams and Jared Brossett (Brossett heads the council’s transportation committee) would remove an existing three-hour time minimum for hired cars and would add language specifically addressing the rise of cellphone apps that connect drivers to riders (though not Uber, specifically) to allow them to operate.

Though Hayes says he’s encouraged by the changes, he isn’t convinced that his company, which wants to bring in two forms of its hail-a-car app to New Orleans, would be able to operate under the remaining regulations.

The biggest barrier, according to Hayes, is the fare structure the city wants to continue to impose on limo and for-hire car services. The proposed ordinance would set a minimum floor for any ride at $25 for sedans and $35 for limos. (By comparison, in Atlanta, Uber Black charges riders a $7 base fare, plus $.30 a minute and $3.05 a mile.)

The ordinance would also impose a $75 minimum for sedans taking airport trips and a $90 minimum for SUVs taking the same route. Traditional taxi rates, which start at $3.50 and then an additional $2 per mile, would remain the same. Taxi fare to the airport is $33 for up to two passengers and $14 per additional passenger.

Berni points out, though, that a $35 for limo service is a drastic change from the previous minimum, which was $105.

Hayes says it’s not just the prices which are “out of whack” with Uber’s business model, but that the company takes issue with the government’s imposing a minimum fare at all. He says that what he calls “price fixing” is unique to New Orleans, and in its email blast, Uber lambasted the city for protecting the interest of the taxicab industry by imposing such regulations.

Berni says that Uber hasn’t yet addressed any issues it has with minimum fares with the city, despite its social media efforts. “They certainly haven’t said that specifically to us,” he says. “I think they would like to see the minimum lower.

“It’s disingenuous to say that they can’t operate with a minimum price,” Berni adds, “because they operate with a minimum price in every market that they operate in.”

click to enlarge An Uber driver in Bogota, Colombia. The company operates in 37 countries around the world and 70 U.S. cities, and is looking to expand into New Orleans. - CREATIVE COMMONS/ALEXANDER TORRENEGRA
  • An Uber driver in Bogota, Colombia. The company operates in 37 countries around the world and 70 U.S. cities, and is looking to expand into New Orleans.

The city doesn’t dispute the accusation that the ordinance was crafted with an eye toward the local cab industry. Berni says that because of new regulations the city enforced on taxi companies between 2010 and 2012, which included the mandatory installation of GPS devices and credit card machines, a new maximum age for vehicles and a depreciation in the value of CPNC’s, or permits, for taxicabs, the city did feel like it’s necessary to separate taxis from Uber cars.

“Because (Uber is) a luxury service, and because the taxicab industry has gone through somewhat expensive reforms in the last several years, that there needed to be some sort of separation between the two,” Berni says. “ … Our approach the whole way was, Uber has an interest, the limos have an interest, the existing limo companies have an interest as well, and then obviously consumers have an interest, and then the city has an interest as well. So how do we balance all of those needs?”

Monroe Coleman, the owner of Coleman Cabs, is as resolute about keeping Uber out as Uber’s fans are about bringing it in. Coleman says the city has forced cab companies to spend too much to get in compliance with new regulations, and that it hasn’t helped the industry the way it helps other businesses by providing incentives and grants for improvement.

“They haven’t given us anything but hell,” Coleman says. “And you quote me on that.”

Coleman believes it’s the city’s responsibility to keep out Uber. “You can’t have two McDonald’s on the same corner, two Burger Kings. The franchise itself protects its investors,” says Coleman. “And that’s what I want the city to do. The city should protect their investors. They made us buy into the new concept. Now they come in with another concept to take away from us. That’s the word you need to get out. We invested in the cab business.”

When I talked to Coleman about Uber in February, he said his company was working on an app similar to Uber that would allow customers to hail Coleman cabs with their phones. But he says the company hasn’t made any progress on its own smartphone app thus far.

“We’re still talking about it,” he says. “The thing we’re working on right now is a rate increase for our drivers to offset the high expense that we have.”

United Cabs President Syed Kazmi also said in February that his company had a smartphone app in the works. Kazmi couldn’t be reached for a status on the app, and there’s no word of any further development on United’s website.

Nawlins Cab, a fairly new taxi service, already has an app. Nawlins Cab president Sheree Kerner says that her company’s app doesn’t currently let you keep your credit card information on file, offer pictures of your driver or allow you to call your driver directly — though after an upgrade planned to be finished in the next three or four months, it will. To Kerner, the problem isn’t about how you hail a cab: “It’s taxi supply,” she says. To that end, Nawlins Cab is exploring other options. The company currently offers “preferred” status for customers who register, pay a $25 fee and guarantee a 50 percent tip for drivers.

Competing apps? Hayes says that’s fine with Uber and even reinforces the company’s belief that competition increases consumer satisfaction. That’s another reason the city’s existing limo and for-hire car regulations bothers him, he says: to be an operational limo or car service in New Orleans, an individual or company must own two or more vehicles.

“It’s a great economic opportunity for individuals,” Hayes says. “The only possible reason I can think of that that would be in place would be to prevent people from getting into the market, and obviously we want to encourage business growth and people getting involved, not discourage that.”

click to enlarge London cabbies staged a protest against Uber earlier this month, citing what they perceived as the company's unfair business practices. It snarled traffic in the city's center. - CREATIVE COMMONS/DAVID HOLT
  • London cabbies staged a protest against Uber earlier this month, citing what they perceived as the company's unfair business practices. It snarled traffic in the city's center.

As for Tuesday’s meeting, both Brossett and Berni say that the ordinance is flexible and will be open to public input.

“I’m currently in the process of making my rounds to councilmembers to get their thoughts and input,” Brossett says. “It’s possible (that it will change). It depends on the input that comes in and it also depends on public input at the committee hearing.”

Brossett isn’t ready yet to disclose his feelings on any proposed changes to the ordinance, but he says he has heard from residents and businesses that Uber is something they want to see in New Orleans. “ We are looking at the ways other municipalities have addressed the minimum requirements,” he says. “… I want the city to be known for advancing and embracing technology.”

But Jeff Schiffman, senior associate director of admissions for Tulane University, says Uber isn’t a novelty anymore to prospective students arriving from other parts of the country.

“It’s not something that only the cool cities have,” he says. “It’s a service that’s expected, and if you don’t have it, you really truly look like you are behind the times.”

In the spring, Schiffman says, more than 600 people visit the Tulane campus each day. “And when the program’s over at the end of the day and you have 15 people waiting for a cab and one cab is coming every 15 minutes, and you have all these families that are waiting and waiting and missing flights … every single person in my office has driven people to the airport,” he says. “It’s a huge issue and we really do everything we can to combat that. Uber would change everything.”

No one doubts that.

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