Criminal Attorney Oklahoma Defense Lawyer Adam R. Banner OKLAHOMA CRIMINAL DEFENSE ATTORNEY AT LAW

The Oklahoma Legal Group Blog

Uber: Innovators or Outlaws?

Adam Banner - Tuesday, December 29, 2015

Ride-sharing apps such as Uber and Lyft filled a niche in a big way. Instead of the traditional method of calling a cab or hailing a taxi on the street, riders get virtually instant gratification by using their smartphones to be connected with a driver nearby. Because the process is cash-free, it is convenient and safe for both riders and drivers. And it allows independent drivers to pick up a few extra bucks just by giving people rides in their own cars.

With Uber recently being valued at $50 billion, it is clear that there is significant demand for these ride-sharing apps and the services they provide.

But any time something new and big comes along, there are unforeseen complications, and in some cases, these issues threaten the existence of the very thing that is enjoying explosive growth.

While there are a number of concerns with Uber—safety and accident liability for example—some of these issues are inflated to fuel criticisms from the industry threatened by the existing of ride-sharing apps.

Critics of Uber, Lyft, and similar ride-sharing apps cite unfair competition with the taxi industry. After all, the taxi industry is heavily regulated. Employee drivers must be screened and vetted before getting hired. State law ascribes insurance regulations and other regulatory fees. Uber, thus far, has been virtually free of these regulations and their costs.

Uber’s lower rates, convenient access, and cash-free credit card model have made it more convenient for riders than traditional taxis—pulling profits from transportation companies who find insult added to injury that Uber isn’t also saddled with the same costs of operation.

So far, ride-sharing apps have been able to avoid regulation by calling themselves technology companies rather than transportation companies. But these semantics are running thin for critics.

Many taxi companies are trying to compete with Uber and Lyft by adjusting their model—creating apps to link riders to taxis and accepting credit cards. But with similar operation, taxi companies still face the regulatory costs that Uber has been able to escape.

So aside from fair competition, why would regulation even be necessary? Safety is one concern, although so far statistics do not bear out that Uber or Lyft are associated with more accidents or assaults than taxi companies.

But another notable reason for regulation would be ensuring fair employment practices. Taxi drivers, unless they own and operate their own cab, are considered to be employees of the taxi companies. Uber drivers, on the other hand, are considered independent contractors.

But these “independent contractors” often function much more like employees in certain aspects, and truthfully, they skirt the line between the “independent contractor” and “employee.” As a judge in one Uber case told the jury, they would be given a square peg and asked to choose between two round holes.

Proposed legislation for the regulation of ride-sharing app companies has met with strong support from transportation companies and even stronger opposition from the citizens who used these apps.

All of this discussion must be tempered by a close evaluation of the laws and how they apply to companies like Uber and Lyft. After all, existing laws did not anticipate the evolution of technology and its melding with transportation demand—nor could it have.

So with laws created prior to ride sharing apps, existing laws do not apply. Are Uber and Lyft circumventing the law? Or are they simply operating according to a new protocol, and legislation is the response to the lobby of an industry that didn’t have the foresight to evolve from its traditional model and adapt to changing technology?

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