When the City Council voted in September to allow the premium service known as Uber Black to operate luxury cars with professional drivers in New Orleans, many assumed it was only a matter of time before the cheaper, more widely used UberX service that involves individuals driving their own vehicles would follow.
More than four months have passed, and it’s not in New Orleans yet — but it may soon be right next door.
Jefferson Parish Council members Cynthia Lee-Sheng and Ben Zahn this week introduced legislation that would permit UberX and similar services to operate in the parish’s unincorporated areas. Their proposed ordinance would set guidelines to regulate a ride-hailing industry that’s already popular in other communities.
The council could vote on the ordinance Jan. 28.
Tom Hayes, the general manager of Uber New Orleans, made clear Thursday that he sees unincorporated Jefferson Parish as a key next step after Uber set up shop in Baton Rouge in July. “It’s our goal to fully serve this area,” he said.
Citing “huge demand” from both potential UberX riders and drivers in the New Orleans area, Hayes commended Lee-Sheng and Zahn for recognizing “the need ... for this in our communities.”
The arrival of Uber in a new area often has produced pushback from owners of taxicabs and limousines, whose fares tend to be higher and that often must deal with expensive regulations that don’t apply to Uber or similar services.
That was the case Thursday, when a spokesman for Whos DrivingYou.org — an initiative of the national Taxicab, Limousine & Paratransit Association — reviewed a copy of the ordinance offered by Lee-Sheng and Zahn and said it could leave Jefferson Parish customers at the mercy of inadequate background checks and incomplete insurance coverage of drivers brought on as independent contractors by companies such as Uber.
“It’s important for the public to understand this is serious business,” said Dave Sutton, the spokesman.
Hayes countered that Uber’s background checks are adequate and that its insurance coverage would be satisfactory whenever needed.
After being contacted by Uber in recent months, Lee-Sheng and Zahn said they were convinced it would be worth setting up a process through which firms that let customers purchase rides through the use of a downloaded, digital phone app could apply for a permit to do business in Jefferson Parish.
Their legislation would not empower Uber and similar operations like Lyft and SideCar to pick up passengers in Jefferson municipalities such as Kenner and Harahan, but only in unincorporated areas like Metairie and Marrero.
Assuming that the legislation is eventually approved, that would rule out Louis Armstrong International Airport, which is in Kenner and is the property of the city of New Orleans, which has not authorized UberX to operate there.
There would be no restriction on where passengers could be taken.
Users in an unauthorized location are not supposed to be able to see any available rides on their apps, and in case of repeated violations, Lee-Sheng said the parish could pull an operator’s permit.
The ordinance calls for drivers of any ride-hailing service to undergo criminal background checks dating back seven years. It would require that their cars be no more than 10 years old.
The ordinance also would address one of Uber’s most controversial aspects: “surge pricing.”
When the demand for rides is great and exceeds the number of drivers available, Uber boosts its prices to encourage more drivers to hit the roads. Depending on how great the demand is, prices at such times can be many times what they’d normally be.
Uber drew international backlash when its surge pricing — dictated by algorithms — was activated amid an uptick in ride demand when 13 people were taken hostage in December in a terrorist attack in Sydney, Australia.
The legislation Lee-Sheng and Zahn are proposing would prohibit surge pricing that violates Louisiana’s price-gouging laws, which go into effect during emergencies such as hurricane evacuations.
Lee-Sheng said the usefulness of ride-hailing services and technology is “not something you’re going to deny, but we’re going to ensure the safety of our citizens.”
She said she realizes the taxi industry stands to be greatly affected. Although she has not met with any local taxi or limousine companies, she said she and Zahn would work with them to ensure they have a fair chance to compete.
“Competition means higher quality” of services for citizens, she said.
However, WhosDrivingYou.org’s Sutton said the ordinance as written would let ride-hailing operators perform background checks on drivers with private, commercial databases. By comparison, Jefferson Parish taxicab applicants are instructed to go to the Sheriff’s Office to have fingerprints and photos taken.
Even with stricter requirements, though, cabbie background checks still don’t completely prevent taxi drivers from attacking passengers. “That further underscores the need for the safest possible criminal background checks,” said Sutton, alluding to numerous reports of Uber drivers in various cities attacking passengers, sometimes sexually.
Another area of the proposal that concerns Sutton involves insurance coverage in the event that a “cruising” driver — one available to pick up fares but not carrying a passenger — causes bodily injury in an accident. That section sets a minimum amount that the ride-hailing group’s insurance must cover in case the driver’s personal insurance does not pay.
Sutton said a cruising ride-hailing driver’s personal insurance will almost always deny claims filed in such a situation.
Louisiana Commissioner of Insurance Jim Donelon agrees. In July, he warned that “virtually all personal auto insurance policies exclude coverage when personal vehicles are used to give rides for fees.”
Hayes said a $1 million policy would automatically kick in whenever a cruising Uber driver is involved in an accident. He said that is many times the minimum Louisiana requires.
As for drivers’ background checks, Hayes disputed that they would be inferior to those done by law enforcement officials. He said Uber’s app provides safety features local cab companies don’t, including a driver-rating system and a way for passengers to communicate with drivers before they’re picked up.
“We have mechanisms in place that add a whole other level of accountability,” Hayes said. “They’re built into it ... to make it a safer, higher-quality experience.”