Federal Judge not so sure Uber and Lyft are any different from cab companies

–REUTERS

By Adam Vaccaro

April 2, 2016

What’s the difference between Uber and a taxi company?

A federal judge isn’t so sure there’s much of one.

U.S. District Court Judge Nathaniel Gorton on Thursday ordered the city of Boston to revise its taxi regulations within six months, and to give the court a good reason why the city shouldn’t be forced to regulate taxis and other ride-hailing services in the same way.

He did so while refusing to dismiss a claim from taxi companies that the city was violating their equal-protection rights because they are being held to a different standard than the new-age transportation services, which are unregulated by the city. (Other claims were dismissed.)

For years, the taxi industry has argued Uber and Lyft drivers should face the same regulatory hurdles cab companies and their drivers deal with because they perform the same function: offering the public rides for a fee. Uber and Lyft have fought local efforts to regulate their drivers like taxis and livery drivers.

Boston officials argued that the claim should be dismissed, saying taxis are distinct from services like Uber and Lyft, pointing to markings on taxi cabs as an example.

Gorton, however, was inclined to the cab companies’ argument that many of the “obvious differences” between cabs and Uber—like the markings or the types of vehicles used—only exist because the city has different requirements for cabs.

“The City may not treat the two groups unequally and then argue that the results of that unequal treatment render the two groups dissimilarly situated. … Such circular logic is unavailing,” Gorton wrote.

Gorton also wrote that some of the differences that made Uber and Lyft distinct from taxis in the past — hailing through a smartphone or credit card-only payments — are disappearing as taxis adopt technology. He pointed to the city’s cab regulations to say that, by the letter of the law, taxis and ride-hail services alike fall under the same Boston Police definition of a for-hire transportation service.

A spokeswoman for Boston Mayor Marty Walsh said the city was reviewing Gorton’s order and could not yet say how the city would proceed with a review of its taxi regulations. And Gorton acknowledged that the possibility that statewide legislation is passed before the end of the summer establishing new laws for Uber and Lyft—which could wind up preempting any local regulations—also complicates the regulating process for the city.

But Janice Griffith, a Suffolk University law professor who studies ride-hail companies, said that if the city is eventually forced to hold taxis and Uber to the same standard, it may result in taxi regulations being loosened. That would be both more feasible and more politically attractive than holding Uber and Lyft to existing taxi standards, she said.

“As a business model, it’s probably impractical to regulate [transportation network companies] or ride-share services in the same manner as taxis,” she said.

Jennifer Pinkham, an attorney for the taxi group behind the suit, said it would be “a victory if the [ride-hail companies] and taxis are on a level playing field — that they’re regulated in the same way.” For example, she said it’s unfair that taxis face vehicle, faring, and insurance requirements that Uber and Lyft do not. But she said the industry isn’t interested in undoing its licensing system, in which owners control a limited quantity of city-issued medallions. The medallions have plummeted in value during the rise of Uber and Lyft, a major factor driving the industry’s complaints.

Gorton is not the first federal judge to indicate sympathy for the cabbies’s belief that all ride-for-hire services should be regulated similarly. A federal judge in Chicago last year allowed an equal-protection claim to proceed in a cab industry suit against the city, saying that city’s different standards for the services “appear utterly arbitrary.”

Arun Sundararajan, a business professor at New York University, said the rulings indicate that taxi regulations across the country are in need of updating.

 “I see them as part of a process of remaking the way that we regulate paid, chauffeured transportation,” he said. “I sort of see things like this as an opportunity for a city to say, ‘OK, now we have to sit down and rewrite this.'”

https://www.boston.com/news/business/2016/04/02/judge-not-so-sure-uber-and-lyft-are-any-different-from-cab-companies