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Updated Apr 11, 2014 - 4:39 pm

Arizona bill sets off debate between taxis, Uber

In this photo taken Friday, March 14, 2014, Jerad Bernard hands out cards to passersby offering one free ride through the Lyft ridesharing service in Seattle. In a fight pitting upstart technology and traditional business, app-based car share companies and traditional taxis are fighting for supremacy in Seattle. The taxi industry say companies like Uber and Lyft undercut their businesses because they are not regulated. Uber and Lyft say they provide services and convenience that taxis sorely lack. (AP Photo/Elaine Thompson)

PHOENIX -- Taxi and rideshare companies are squaring off as the Arizona Legislature mulls a bill that would give rideshares an exception from certain regulations.

"Arizona really is the most free and open for-hire transportation market anywhere in the country today," said Mike Pinckard, president of Gilbert, Ariz.-based Discount Cab. "Anybody can come into this market with as many vehicles, as many drivers (as they want). There's no limits on rates, there's very few consumer protections and safety protections required to operate in this market. Anybody can be here."

The issue at hand, according to Pinckard, comes down to a regulation that requires cab companies such as Discount to carry certain insurance at all times. If House Bill 2262 is approved, rideshare services, such as Uber and Lyft, would be exempt from that requirement.

"They're simply not buying insurance on the vehicles as required by the law," he said. "That's all this is about."

However, HB 2262 would require services such as Uber to carry a $1 million policy and conduct background checks, something the rideshare company said it already does.

"From the moment that a rider enters the vehicle through the end of that trip, there is $1 million in insurance coverage per incident," said Uber spokesperson Nairi Hourdajian. "In addition, that $1 million extends to uninsured and underinsured drivers as well, meaning that no matter who is at fault, there is coverage in place."

Hourdajian also said Uber requires drivers to pass a comprehensive background check that includes both a criminal and driving history along with a sex offender screening.

So what is the argument really about? According to Hourdajian, it's about fear of competition.

"This is really about that the taxi industry has been underserving Arizonans for decades and Uber is different," she said. "Uber is different because Arizonans can get a ride when they want one. It's different because drivers who are utilizing the Uber platform...are making better money."

But Pinckard said it's simply about keeping two multibillion companies honest and the public safe.

"It just doesn't make sense to me that we would compromise the safety of the public or the passengers to give two multibillion dollar companies an advantage," he said, adding that it's "debatable"

whether or not it would benefit cab companies to seek legislative change to drop their own insurance requirements.

Pinckard said the exemptions could cause insurance rates to rise should an accident occur between a private vehicle and one driven by an Uber driver, who may carry a different kind of insurance.

"If you don't know that there's another policy out there, all that's going to do is create confusion, it's going to create litigation and it's actually going to shift the cost of insurance on to the general public and drive everyone's insurance premiums up."

One of the issues with Uber is its varying services. The rideshare offers Uber, which operates like a typical taxi, uberX, which is a partnership between the company and private drivers and Uber Black, when the company partners with limousine businesses.

The type of transportation doesn't matter, according to Hourdajian. The coverage is the same.

"Uber was the first company to roll out contingent insurance coverage for that time a driver is online and waiting to accept a trip," she said.

The Arizona Legislature is expected to consider HB 2262 next week.

About the Author

Rob & Karie is a fast-paced show built around conversations on current events and the biggest news stories of the day. It features local and national news stories, political issues, pop culture and entertainment along with regular interviews with newsmakers.


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