[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
EXAMINING THE FUTURE OF TRANSPORTATION NETWORK COMPANIES: CHALLENGES
AND OPPORTUNITIES
=======================================================================
(116-36)
HEARING
BEFORE THE
SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 16, 2019
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
___________
U.S. GOVERNMENT PUBLISHING OFFICE
41-285 PDF WASHINGTON : 2020
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri ELEANOR HOLMES NORTON,
DON YOUNG, Alaska District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio ELIJAH E. CUMMINGS, Maryland
DANIEL WEBSTER, Florida RICK LARSEN, Washington
THOMAS MASSIE, Kentucky GRACE F. NAPOLITANO, California
MARK MEADOWS, North Carolina DANIEL LIPINSKI, Illinois
SCOTT PERRY, Pennsylvania STEVE COHEN, Tennessee
RODNEY DAVIS, Illinois ALBIO SIRES, New Jersey
ROB WOODALL, Georgia JOHN GARAMENDI, California
JOHN KATKO, New York HENRY C. ``HANK'' JOHNSON, Jr.,
BRIAN BABIN, Texas Georgia
GARRET GRAVES, Louisiana ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina DINA TITUS, Nevada
MIKE BOST, Illinois SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas JARED HUFFMAN, California
DOUG LaMALFA, California JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania DONALD M. PAYNE, Jr., New Jersey
PAUL MITCHELL, Michigan ALAN S. LOWENTHAL, California
BRIAN J. MAST, Florida MARK DeSAULNIER, California
MIKE GALLAGHER, Wisconsin STACEY E. PLASKETT, Virgin Islands
GARY J. PALMER, Alabama STEPHEN F. LYNCH, Massachusetts
BRIAN K. FITZPATRICK, Pennsylvania SALUD O. CARBAJAL, California,
JENNIFFER GONZALEZ-COLON, Vice Chair
Puerto Rico ANTHONY G. BROWN, Maryland
TROY BALDERSON, Ohio ADRIANO ESPAILLAT, New York
ROSS SPANO, Florida TOM MALINOWSKI, New Jersey
PETE STAUBER, Minnesota GREG STANTON, Arizona
CAROL D. MILLER, West Virginia DEBBIE MUCARSEL-POWELL, Florida
GREG PENCE, Indiana LIZZIE FLETCHER, Texas
COLIN Z. ALLRED, Texas
SHARICE DAVIDS, Kansas
ABBY FINKENAUER, Iowa
JESUS G. ``CHUY'' GARCIA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California
Subcommittee on Highways and Transit
ELEANOR HOLMES NORTON, District of
Columbia, Chair
RODNEY DAVIS, Illinois EDDIE BERNICE JOHNSON, Texas
DON YOUNG, Alaska STEVE COHEN, Tennessee
ERIC A. ``RICK'' CRAWFORD, Arkansas JOHN GARAMENDI, California
BOB GIBBS, Ohio HENRY C. ``HANK'' JOHNSON, Jr.,
DANIEL WEBSTER, Florida Georgia
THOMAS MASSIE, Kentucky JARED HUFFMAN, California
MARK MEADOWS, North Carolina JULIA BROWNLEY, California
ROB WOODALL, Georgia FREDERICA S. WILSON, Florida
JOHN KATKO, New York ALAN S. LOWENTHAL, California
BRIAN BABIN, Texas MARK DeSAULNIER, California
DAVID ROUZER, North Carolina SALUD O. CARBAJAL, California
MIKE BOST, Illinois ANTHONY G. BROWN, Maryland
DOUG LaMALFA, California ADRIANO ESPAILLAT, New York
BRUCE WESTERMAN, Arkansas TOM MALINOWSKI, New Jersey
LLOYD SMUCKER, Pennsylvania GREG STANTON, Arizona
PAUL MITCHELL, Michigan COLIN Z. ALLRED, Texas
MIKE GALLAGHER, Wisconsin SHARICE DAVIDS, Kansas
GARY J. PALMER, Alabama ABBY FINKENAUER, Iowa, Vice Chair
BRIAN K. FITZPATRICK, Pennsylvania JESUS G. ``CHUY'' GARCIA, Illinois
TROY BALDERSON, Ohio ANTONIO DELGADO, New York
ROSS SPANO, Florida CHRIS PAPPAS, New Hampshire
PETE STAUBER, Minnesota ANGIE CRAIG, Minnesota
CAROL D. MILLER, West Virginia HARLEY ROUDA, California
GREG PENCE, Indiana GRACE F. NAPOLITANO, California
SAM GRAVES, Missouri (Ex Officio) ALBIO SIRES, New Jersey
SEAN PATRICK MALONEY, New York
DONALD M. PAYNE, Jr., New Jersey
DANIEL LIPINSKI, Illinois
DINA TITUS, Nevada
STACEY E. PLASKETT, Virgin Islands
PETER A. DeFAZIO, Oregon (Ex
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Eleanor Holmes Norton, a Delegate in Congress from the
District of Columbia, and Chairwoman, Subcommittee on Highways
and Transit:
Opening statement............................................ 1
Prepared statement........................................... 2
Hon. Rodney Davis, a Representative in Congress from the State of
Illinois, and Ranking Member, Subcommittee on Highways and
Transit:
Opening statement............................................ 2
Prepared statement........................................... 3
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, and Chairman, Committee on Transportation and
Infrastructure:
Opening statement............................................ 4
Prepared statement........................................... 6
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Ranking Member, Committee on Transportation and
Infrastructure, prepared statement............................. 67
Hon. Eddie Bernice Johnson, a Representative in Congress from the
State of Texas, prepared statement............................. 67
Hon. Steve Cohen, a Representative in Congress from the State of
Tennessee, prepared statement.................................. 68
WITNESSES
Member Panel
Hon. Christopher H. Smith, a Representative in Congress from the
State of New Jersey:
Oral statement............................................... 7
Prepared statement........................................... 9
Hon. Thomas R. Suozzi, a Representative in Congress from the
State of New York:
Oral statement............................................... 10
Prepared statement........................................... 11
Panel 1
Hon. Karen Freeman-Wilson, Mayor, City of Gary, Indiana, and
President, National League of Cities:
Oral statement............................................... 13
Prepared statement........................................... 15
Jon W. Martz, Director, Government and Public Affairs, COMMUTE
with Enterprise:
Oral statement............................................... 19
Prepared statement........................................... 21
Paul A. Miller, Legislative Counsel, The Transportation Alliance:
Oral statement............................................... 31
Prepared statement........................................... 33
Larry I. Willis, President, Transportation Trades Department,
AFL-CIO:
Oral statement............................................... 36
Prepared statement........................................... 38
SUBMISSIONS FOR THE RECORD
Report entitled ``The Costs of Doing Business: Why Lawmakers Must
Hold the Ride-Hailing Industry Accountable as They Undermine
Their Workers and Play by Their Own Rules,'' by the
Transportation Trades Department, AFL-CIO, October 2019,
Submitted for the Record by Hon. Peter A. DeFazio.............. 69
Letter of July 22, 2019, from the National Conference of State
Legislatures and the American Association of State Highway and
Transportation Officials, Submitted for the Record by Hon.
Eleanor Holmes Norton.......................................... 75
Statement of Gary Buffo, President, National Limousine
Association, Submitted for the Record by Hon. Peter A. DeFazio. 75
APPENDIX
Questions from Hon. Peter A. DeFazio to Hon. Karen Freeman-
Wilson, Mayor, City of Gary, Indiana, and President, National
League of Cities............................................... 79
Questions from Hon. Eleanor Holmes Norton to Hon. Karen Freeman-
Wilson, Mayor, City of Gary, Indiana, and President, National
League of Cities............................................... 80
Question from Hon. Steve Cohen to Hon. Karen Freeman-Wilson,
Mayor, City of Gary, Indiana, and President, National League of
Cities......................................................... 80
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Hon. Karen
Freeman-Wilson, Mayor, City of Gary, Indiana, and President,
National League of Cities...................................... 81
Questions from Hon. Mike Gallagher to Hon. Karen Freeman-Wilson,
Mayor, City of Gary, Indiana, and President, National League of
Cities......................................................... 82
Questions from Hon. Peter A. DeFazio to Paul A. Miller,
Legislative Counsel, The Transportation Alliance............... 83
Question from Hon. Eleanor Holmes Norton to Paul A. Miller,
Legislative Counsel, The Transportation Alliance............... 86
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Paul A.
Miller, Legislative Counsel, The Transportation Alliance....... 86
Questions from Hon. Lloyd Smucker to Paul A. Miller, Legislative
Counsel, The Transportation Alliance........................... 87
Question from Hon. Mike Gallagher to Paul A. Miller, Legislative
Counsel, The Transportation Alliance........................... 88
Questions from Hon. Peter A. DeFazio to Larry I. Willis,
President, Transportation Trades Department, AFL-CIO........... 88
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Larry I.
Willis, President, Transportation Trades Department, AFL-CIO... 89
Questions from the Majority-Side Subcommittee to Lyft............ 90
Questions from the Majority-Side Subcommittee to Uber............ 97
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
October 11, 2019
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Highways and Transit
FROM: LStaff, Subcommittee on Highways and Transit
RE: LSubcommittee Hearing on ``Examining the Future of
Transportation Network Companies: Challenges and
Opportunities''
_______________________________________________________________________
PURPOSE
The Subcommittee on Highways and Transit will meet on
Wednesday, October 16, 2019, at 10:00 a.m. in 2167 Rayburn
House Office Building to receive testimony related to
``Examining the Future of Transportation Network Companies:
Challenges and Opportunities.'' The purpose of this hearing is
to learn from stakeholders about transportation network
companies (TNCs); the role of cities and States in regulating
TNC operations; and the impacts of this transportation model on
mobility, other transportation options, drivers, and
passengers. The Subcommittee will hear from representatives
from the National League of Cities, the Transportation
Alliance, the Transportation Trades Department, AFL-CIO, and
Commute with Enterprise.
BACKGROUND
TNCs use digital technologies such as a software
application to connect passengers with drivers operating
personal vehicles to provide one or more riders prearranged,
for-hire transportation services. Over the past decade TNCs
have rapidly expanded into cities across the U.S.,
significantly impacting the transportation landscape. According
to 2016 data from Harvard Business Review, spending for on-
demand transportation services is estimated to capture 7.3
million monthly consumers and $5.6 billion in annual
spending.\1\ Additionally, Pew Research Center reported that 36
percent of U.S. adults have utilized TNCs--representing a 240-
percent increase since 2015.\2\ According to recent estimates,
Uber and Lyft hold 98.3 percent of the market share at 71.1
percent \3\ and 27.2 percent \4\, respectively. Smaller
competitors, such as Via and Juno, comprise the remainder of
the market. In recent years, TNCs including Uber and Lyft have
expanded their service options to include carpooling, bike, and
scooter rentals.
---------------------------------------------------------------------------
\1\ https://hbr.org/2016/04/the-on-demand-economy-is-growing-and-
not-just-for-the-young-and-wealthy
\2\ https://www.pewresearch.org/fact-tank/2019/01/04/more-
americans-are-using-ride-hailing-apps/
\3\ https://secondmeasure.com/datapoints/rideshare-industry-
overview/
\4\ Id.
---------------------------------------------------------------------------
Transportation options facilitated by TNCs can provide
opportunities to develop a network of mobility choices,
integrated with traditional transportation options, that meet
the needs of diverse users and create benefits for consumers.
This new model for transportation services has also raised
numerous public policy questions, including how to integrate
TNCs with existing transit service, impacts on mobility and
congestion in cities and States, how cities and States regulate
this new model, implications for the transportation labor
market, and safety impacts.
MOBILITY INNOVATION
MOBILITY ON DEMAND (MOD)
As defined by the Department of Transportation, MOD is an
innovative, user-focused approach that leverages emerging
mobility services, integrated transit networks and operations,
real-time data, connected travelers, and cooperative
Intelligent Transportation Systems to allow for a more
traveler-centric, transportation system-of-systems approach
that provides improved mobility options to all travelers and
users in an efficient and safe manner.\5\ MOD offers more
flexibility and personal choice in mobility, and provides
solutions to long-standing transportation challenges such as:
---------------------------------------------------------------------------
\5\ https://www.its.dot.gov/factsheets/pdf/MobilityonDemand.pdf
LConvenience: streamlined access to on-demand
transportation services makes it easier for riders to travel
quickly while eliminating the nuisance of multiple payment
systems;
LCongestion: new carpool, scooter, bike share and
transit options allow users opportunities to bypass congestion.
For example, according to Lyft twenty percent of the company's
riders have used a bike or scooter rental.\6\
---------------------------------------------------------------------------
\6\ https://www.lyftimpact.com/impact/transportation/expanded
---------------------------------------------------------------------------
LAccessibility: new mobility options for
underserved populations, paratransit, and non-emergency medical
transportation.
TRANSIT INTEGRATION
While TNCs offer an alternative to traditional transit
options, they can also increase access to existing public
transit systems by providing first and last mile connections.
Some transit agencies have been experimenting with TNC
partnerships to close the gap in first and last mile
connectivity. These agencies are subsidizing rides to and from
transit stations to improve the speed and convenience of trips
while still taking advantage of the inherent efficiencies of
transit in busy corridors.
TAXIS
TNCs are generally competitors with the taxi industry.\7\
Many of the challenges in accessibility, safety, and modal
integration are similar to those that have historically
confronted the taxi industry. However, these challenges have
been brought to the forefront given the rapid growth of TNCs
and their reach into new markets and segments.
---------------------------------------------------------------------------
\7\ The Economic Impact of Transportation Network Companies on the
Taxi Industry, Alice Wang, 2015. https://scholarship.claremont.edu/cgi/
viewcontent.cgi?referer=&httpsredir=1
&article=1648&context=scripps_theses
---------------------------------------------------------------------------
CONGESTION
Americans lose 8.8 billion hours per year to congestion.\8\
TNCs first began operations in San Francisco almost a decade
ago, providing a window into the long-term effects of TNCs and
congestion. The San Francisco County Transportation Authority
(SFCTA) found that since TNCs first emerged in 2010 they have
increased congestion in San Francisco by approximately 50
percent according to several metrics.\9\
---------------------------------------------------------------------------
\8\ ``2019 Urban Mobility Report.'' Texas A&M Transportation
Institute, Aug. 2019.
\9\ https://www.sfcta.org/sites/default/files/2019-05/
TNCs_Congestion_Report_181015_
Finals.pdf
LFrom 2010 to 2016, total vehicle hours of delay
in San Francisco increased by about 40,000 hours, 51 percent of
which was estimated to be due to TNCs.
LDuring the same time period, total vehicle miles
traveled (VMT) increased by over 630,000 miles, 47 percent of
which were caused by TNCs.
LAverage vehicle speeds decreased by 3.1 miles per
hour, 55 percent of which was because of TNCs.
Another study found that TNCs have added 5.7 billion miles
of driving annually in the metro areas of Boston, Chicago, Los
Angeles, Miami, New York, Philadelphia, San Francisco, Seattle
and Washington DC alone.\10\ In regards to the impact on
traffic, the study found that private rides with a TNC add 2.8
new vehicle miles on the road for every one mile of personal
driving removed, a 180 percent increase. Additionally, the
study found that shared TNC rides have only a marginally lower
impact with each shared ride adding 2.6 vehicle miles on the
road for each one mile of personal driving removed. This is
because most passengers who choose shared TNC rides are
switching from non-auto modes (e.g. public transit, biking, and
walking).\11\
---------------------------------------------------------------------------
\10\ http://www.schallerconsult.com/rideservices/automobility.pdf
\11\ Id.
---------------------------------------------------------------------------
REGULATIONS
STATE AND LOCAL LAWS
The emergence of TNCs has prompted cities and States across
the country to respond with laws that govern their operations.
These companies do not fit neatly into existing regulatory
frameworks, sometimes leading to conflicts between state and
local priorities. Proponents of state-level TNC regulations
assert that statewide frameworks create uniform standards,
allowing TNCs to seamlessly operate anywhere in the state.
Others believe that local regulations are necessary to account
for localized needs, which may differ between cities. For
example, a large, densely populated city may need to establish
protections for limited curb space in urban centers, while
rural, sparsely populated cities may need flexibility to
encourage a TNC to cover underserved areas. As of October 2018,
42 States had passed legislation preempting local TNC
regulations.\12\ TNC regulations vary across cities and States,
but often address safety standards as well as fees, permits,
and insurance requirements.
---------------------------------------------------------------------------
\12\ https://onlabor.org/state-tnc-and-mc-legislation-preemption-
and-employment-status-of-drivers/
---------------------------------------------------------------------------
BACKGROUND CHECKS
To begin driving with a TNC, prospective drivers apply
directly with the company either through their website or app.
The application processes vary, but typically include both a
criminal background check and a driving record check conducted
by the TNC through a third-party provider, as well as a vehicle
safety inspection administered by the relevant local agency.
TNCs must also follow applicable state and local laws regarding
background checks, which vary significantly by State and city,
and may capture criteria not covered by the company check.
Further, the Fair Credit Reporting Act (FCRA) prohibits
consumer reporting agencies from disclosing arrests or adverse
information that occurred prior to the 7 year period preceding
the initiation of the background report.\13\ Recently in
Eugene, Oregon, approximately two dozen drivers for Uber and
Lyft were allowed to drive passengers after clearing the
companies' background check but were then subsequently
disqualified after failing background checks conducted by local
law enforcement.\14\ One of those disqualified drivers was
found to have been convicted of murder, while another was a
registered sex offender.\15\
---------------------------------------------------------------------------
\13\ 15 U.S.C. Sec. 1681
\14\ http://eugeneregisterguard.or.newsmemory.com/
?publink=02a06bafe
\15\ Id.
---------------------------------------------------------------------------
WORKFORCE
WAGES
Estimates of how much TNC drivers earn vary significantly.
According to Uber's Chief Economist Jonathan Hall, Uber
estimates drivers in 20 of its largest U.S. markets earned an
average of between $19.04 and $21.07 an hour between 2015 and
2017.\16\ The Economic Policy Institute, however, calculated an
Uber driver's take home pay (once fees, taxes, and related
expenses were deducted) to be an average of $9.21 an hour.\17\
Further, the report found that Uber drivers have high turnover
and, on average, work only part of the year (an average of
three months) and part time (an average of 17 hours per
week).\18\
---------------------------------------------------------------------------
\16\ https://medium.com/uber-under-the-hood/an-analysis-of-ceeprs-
paper-on-the-economics-of-ride-hailing-1c8bfbf1081d
\17\ https://www.epi.org/publication/uber-and-the-labor-market-
uber-drivers-compensation-wages-and-the-scale-of-uber-and-the-gig-
economy/
\18\ Id.
---------------------------------------------------------------------------
EMPLOYEE CLASSIFICATION
TNCs consider themselves technology platforms, not
transportation companies, and consider their drivers to be
independent contractors, not employees. TNC drivers are not
eligible for benefits and must pay self-employment tax to cover
Social Security and Medicare. Additionally, TNCs deduct fees
and commissions from driver fares, and drivers are responsible
for covering the costs of operating and maintaining their
vehicles. This business model has faced backlash in some areas,
most notably in California. Last month, California passed a new
state law (AB 5) \19\ allowing TNCs and other gig economy
companies to classify workers as independent contractors only
if the employer demonstrates they meet specific criteria.
---------------------------------------------------------------------------
\19\ https://leginfo.legislature.ca.gov/faces/
billNavClient.xhtml?bill_id=201920200AB5
---------------------------------------------------------------------------
AUTOMATION
TNCs have seen a significant increase in the number of
drivers over recent years. According to a report from Uber in
partnership with economist Alan Krueger, there were 464,681
drivers actively partnered with Uber in December 2015,\20\
compared to only 162,037 active Uber drivers in December
2014.\21\ In early 2018, Uber reported there were more than
750,000 Uber drivers in the U.S.\22\ At the same time, both
Uber and Lyft are working to develop self-driving technologies,
which would eliminate most if not all of these jobs. For
example, Lyft has partnered with automotive tech supplier Aptiv
to offer self-driving ride-hailing services in Las Vegas and
has completed over 50,000 driverless rides over the course of
the partnership.\23\ Uber has been testing its own self-driving
cars in Pittsburgh, PA with plans to begin testing in Dallas,
TX in November 2019.\24\
---------------------------------------------------------------------------
\20\ https://www.nber.org/papers/w22843.pdf
\21\ https://s3.amazonaws.com/uber-static/comms/PDF/Uber_Driver-
Partners_Hall_Kreuger_
2015.pdf
\22\ https://medium.com/uber-under-the-hood/an-analysis-of-ceeprs-
paper-on-the-economics-of-ride-hailing-1c8bfbf1081d
\23\ https://www.cnet.com/roadshow/news/lyft-aptiv-self-driving-
car-50k-rides/
\24\ https://www.theverge.com/2019/9/17/20870969/uber-self-driving-
car-testing-dallas
---------------------------------------------------------------------------
SAFETY
TNC operations have faced increased scrutiny in recent
years over the safety of drivers and riders. According to a
lawsuit filed by fourteen women who state they were raped or
sexually assaulted by Lyft drivers, Lyft received as many as
100 complaints of sexual assault in California alone between
2014 and 2016.\25\ Legislative proposals at the local, State,
and Federal level have been introduced to impose greater safety
regulation of ride-hailing services. Further, safety concerns
regarding mistaken vehicle identification by riders have been
raised.\26\ Both Uber and Lyft have instituted changes to
increase rider awareness and safety in recent years. Uber also
announced in November 2018 they plan to release a safety report
on data of sexual violence reported by riders and drivers
sometime this year. However, data on sexual assaults and other
crimes reported to Uber and Lyft is not publicly available, and
there is no comprehensive source detailing the number of
incidents reported to police.
---------------------------------------------------------------------------
\25\ https://www.cbsnews.com/news/lyft-lawsuit-14-women-file-
lawsuit-after-drivers-allegedly-sexually-assaulted-them/
\26\ https://www.washingtonpost.com/crime-law/2019/03/31/she-
thought-she-had-gotten-into-her-uber-police-say-hours-later-hunters-
found-her-body/
---------------------------------------------------------------------------
WITNESS LIST
MEMBER PANEL
LThe Honorable Christopher H. Smith, Member of
Congress
LThe Honorable Thomas R. Suozzi, Member of
Congress
PANEL I
LThe Honorable Karen Freeman-Wilson, Mayor, City
of Gary, Indiana, President, National League of Cities
LMr. Jon W. Martz, Director, Government and Public
Affairs, Commute with Enterprise
LMr. Paul Miller, Legislative Counsel, The
Transportation Alliance
LMr. Larry Willis, President, Transportation
Trades Department, AFL-CIO
Uber, Lyft, and Via were invited and declined the invitation.
EXAMINING THE FUTURE OF TRANSPORTATION NETWORK COMPANIES: CHALLENGES
AND OPPORTUNITIES
----------
WEDNESDAY, OCTOBER 16, 2019
House of Representatives,
Subcommittee on Highways and Transit,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:06 a.m. in
room 2167, Rayburn House Office Building, Hon. Eleanor Holmes
Norton (Chairwoman of the subcommittee) presiding.
Ms. Norton. The subcommittee will come to order. I ask
unanimous consent that the chair be authorized to declare
recesses during today's hearing.
Without objection, so ordered.
I will proceed with my opening statement at this time. I
want to thank our witnesses, including the two Members of
Congress, who have joined us today for this important hearing
on the burgeoning growth of alternative transportation
companies. I will be calling them TNCs. These are companies
that use technology to provide rides on demand.
The two largest TNCs that make up 98 percent of the market,
Uber and Lyft, were, of course, invited to join us. But they
declined. However, Congress cannot avoid its responsibility to
engage, to investigate its role in overseeing this industry.
Uber and Lyft have missed an important opportunity for them,
but that will not stop this committee or this subcommittee from
doing its duty.
Today we will hear from Members of Congress and the other
witnesses reflect on the tough, outstanding questions to ensure
that the TNC mobility option actually delivers a public service
safely and equitably, and operates in the interest of the
public and for its workers.
We will hear today about important public safety concerns
that arise when companies develop an app that connects
passengers and drivers through technology and hope for the best
without appropriate scrutiny and rigorous background checks.
We also will hear of the effects on hundreds of thousands
of workers who are left with little choice in today's market
but to drive for Uber and Lyft to supplement their low wages
that affect so many Americans today.
We will hear about the efforts of workers to organize to
achieve improvements in income and working conditions.
We will hear about impacts to mobility in cities when more
TNC vehicles are permitted to flood roadways and block curb
cuts without thoughtful rules in place to mitigate congestion.
We will hear about the impact of TNCs on existing
transportation networks such as transit systems.
Today's hearing marks the first serious discussion about
how to harness the power of technology and innovation to
deliver benefits to riders, while providing appropriate
guardrails to ensure safety and accountability.
[Ms. Norton's prepared statement follows:]
Prepared Statement of Hon. Eleanor Holmes Norton, a Delegate in
Congress from the District of Columbia, and Chairwoman, Subcommittee on
Highways and Transit
I thank our witnesses for joining us today for this important
hearing.
I would like to start out by noting a glaring omission on a panel
assembled to discuss the challenges and opportunities presented by
Transportation Network Companies, or TNCs.
The two largest TNCs that make up over 98 percent of the market--
Uber and Lyft--were invited to join us but respectfully declined. That
leaves me with a big question of what they don't want to talk about on
record before Congress.
Since the TNCs choose not to participate and present their business
model and story, we will have to take a different approach.
Today, we will hear Members of Congress and other esteemed
witnesses reflect on the tough questions we all must ask to ensure that
this new mobility option that TNCs have developed and discharged across
the country actually delivers a public service safely and equitably,
and will not escalate a race to the bottom for transportation workers.
We will hear today about important public safety concerns that
arise when companies develop an app that connects passengers and
drivers through technology and hope for the best--without appropriate
scrutiny and rigorous background checks of whether drivers could pose a
safety threat.
We will hear about the effects on hundreds of thousands of workers
who--left with little other choice than to drive for Uber and Lyft to
supplement low wages in other jobs--sign up hoping to earn money but
quickly find that as independent contractors, they are left to maintain
their vehicles and fund operational costs such as fuel, as well as pay
required taxes, out of their own pockets.
We will hear about impacts to mobility in cities when more TNC
vehicles are permitted to flood roadways and block curb cuts, without
thoughtful rules in place to mitigate congestion.
And we will hear about the impacts to existing transportation
networks, such as transit systems, that the TNC model is having.
I hope that today's hearing will spark a serious discussion about
how to harness the power of technology and innovation to deliver
benefits to travelers and riders, but with appropriate regulatory
guardrails to ensure safety and accountability so that this new model--
and all who travel on it--can thrive.
Ms. Norton. I ask unanimous consent that Members not on the
subcommittee be permitted to sit with the subcommittee at
today's hearing, and to ask questions.
I now ask our ranking member if he has an opening
statement.
Mr. Davis. Thank you, Madam Chair, and thank you, Chairman
DeFazio. I also want to thank our two colleagues who have
joined us today, Mr. Smith from New Jersey; Mr. Suozzi from New
York.
I look forward to hearing your remarks. And it has been
great to sit down and work with each of you on issues that are
important to the hearing that is going to be conducted today.
Our public roads are a shared resource, and our job is to
figure out how to best manage this shared and ultimately scarce
resource.
Over the past decade we have seen an unprecedented
explosion of a new player on public roads: TNCs. The mobility
landscape has been completely reshaped, and the growth for on-
demand shared mobility has required States and localities to
think how to plan for and organize their road and transit
systems.
The number of monthly active Uber users rose to over 100
million globally this year. And with over 15 million trips
happening each day, this represents a huge shift in how
Americans are getting around on a day-to-day basis.
TNCs aren't just focused in big cities, either. In my
district alone, which is a mix of rural and many urban areas,
Lyft conducted over 62,000 rides last year. And today Uber
serves more than 82 percent of the U.S. population, upwards of
268 million people.
And while Uber and Lyft may not be able to serve every
small town and city across the country, their presence and
innovation has spurred other ride-hailing alternatives. And
today we are going to hear about one of them from Mr. Martz,
from COMMUTE with Enterprise, who is working to make carpooling
easy for companies and commuters.
But while we are all excited about the prospects for new
integrated mobility options, we must be cognizant of its risks
and impacts both for riders and drivers. The safety of our
traveling public is of paramount importance. And regardless, if
you are traveling in a taxi, taking public transit, or riding
through a TNC, you need to feel and be safe.
For example, in my district it is home to four public
universities, including Illinois State University. And that
university alone has over 20,000 students. And we must be sure
to protect the safety of every one of our campuses across our
country.
[Mr. Davis' prepared statement follows:]
Prepared Statement of Hon. Rodney Davis, a Representative in Congress
from the State of Illinois, and Ranking Member, Subcommittee on
Highways and Transit
Our public roads are a shared resource and our job is to figure out
how to best manage this shared, and ultimately scarce, resource.
Over the past decade, we've seen an unprecedented explosion of a
new player on our public roads: TNCs. The mobility landscape has been
completely reshaped and the growth for on-demand shared mobility has
required states and localities to rethink how to plan for and organize
their road and transit systems.
The number of monthly active Uber users rose to over 100 million
globally this year; and with over 15 million trips happening each day,
this represents a huge shift in how Americans are getting around on a
day-to-day basis.
TNCs aren't just focused in big cities either. In my district
alone, Lyft conducted over 62,000 rides over the past year. And today,
Uber serves more than 82 percent of the U.S. population--upwards of 268
million people. And while Uber and Lyft may not be able to serve every
small town and city across the country, their presence and innovation
has spurred other ride-hailing alternatives.
Today, we're going to hear from Mr. Martz, from Commute with
Enterprise, who is making carpooling easy for companies and commuters.
But while we are all excited about the prospects for new,
integrated mobility options, we must be cognizant of its risks and
impacts, both for riders and drivers. The safety of our traveling
public is of paramount importance, and regardless if you're traveling
in a taxi, taking public transit, or riding through a TNC, you need to
feel safe. For example, my district is home to four public
universities, including the Illinois State University with over 20,000
students. We must be sure to protect the safety of all our campuses
across the country.
With that, I want to thank our witnesses for being with us this
morning, and I look forward to hearing their testimony.
Mr. Davis. With that I again want to thank our witnesses
for being with us this morning. And I look forward to hearing
their testimony.
And, Madam Chair, I yield back.
Ms. Norton. Thank you very much, Mr. Davis. I would like to
ask the chairman of the full committee, Mr. DeFazio, if he has
an opening statement.
Mr. DeFazio. I certainly do, Madam Chair. Am I recognized?
Ms. Norton. You are recognized for your opening statement.
Mr. DeFazio. Thank you. Thanks, Madam Chair.
Today the hearing is on a topic that is having already far-
reaching implications on transportation mobility in our
country. And this hearing should also serve as a wake-up call
to companies that have flooded our roadways with disruptive
technologies and investor capital that their days of operating
with little public policy and regulatory oversight in the
transportation space are coming to an end.
The transportation landscape in many cities has been
upended by these TNCs, transportation network companies, led by
Uber and Lyft, who refused to testify today, having led us on
for weeks saying they would try to testify. They just told us
on the holiday weekend they wouldn't come.
They have their transformative technology platforms
connecting riders, revolutionizing travel, the way we travel.
But there are a lot of problems with this model.
First off, TNCs are contributing in a major way to traffic
congestion. In San Francisco, where the very first Uber ride
was taken in 2010, in 6 years traffic delays increased by a
total of 40,000 hours; vehicle miles traveled increased by
630,000 miles. And half of them are attributable to TNCs.
Private and even shared TNC rides add more congestion and more
emissions, not less.
How these new technologies are integrated into our existing
systems, what rules TNCs must follow, must be carefully crafted
to ensure that these services are truly a good option.
Lawmakers at the Federal, State, and local level need to think
far beyond just whether this new service gets people from point
A to point B.
What this new business model means for public safety, jobs,
emissions, transit service, and other factors must be at the
center of any policy decisions to allow these companies to
access our infrastructure.
The failure today of Uber and Lyft to appear is a telling
sign that they don't want to answer questions on the record
about their operations. I read a news account today that they
have met with all the members, or almost all the members of the
subcommittee, and had great conversations. Well, they didn't
come to see me.
Now, perhaps they don't want to talk about their public
safety problems. And I am grateful to Representatives Smith and
Suozzi for being here today, and starting off this hearing with
statements on their ideas on how to improve the safety of ride-
hailing services. I have been focused on the potential dangers
of pairing passengers with poorly vetted drivers for years.
In June 2015 I wrote to Uber's then-CEO, Travis Kalanick,
urging the company to conduct fingerprint-based background
checks. Four years later, the process that Uber and Lyft use to
vet drivers is not fingerprint-based. It is woefully
inadequate, leaving passengers vulnerable and at risk of
harassment or assault.
In my district, in the small city of Eugene, Oregon, they
vetted 13 drivers as being right up to the standards of Uber
and Lyft. Unfortunately for them, my city requires taxi
drivers--and they were deemed to be taxi drivers--to take a
fingerprint background check. Oh, guess what? Thirteen of them
were convicted felons. One was a sexual predator. One was a
murderer. And they were all just good to go, so far as Uber and
Lyft were concerned.
And then Uber and Lyft show up at my State legislature and
try and preempt communities from having higher standards. They
spent millions of dollars in Texas on that same issue. They
don't want people to be fully vetted, because they want anybody
and everybody who can get behind the wheel who might or might
not have a valid driver's license to be driving for them.
This has got to end.
They are also, as we have seen, making a lot of their
employees yet another victim of the gig economy. California has
deemed that these people are employees. Uber and Lyft say,
``No, no employees, not employees. Contractors. We have no
liability, no nothing. They just use our platform.'' Except
they extract massive payments from these drivers, and the
drivers are totally dependent upon the system.
And now they are sponsoring an initiative, or trying to
sponsor an initiative in California, to repeal that law.
So it could be public safety, it could be abuse of their
workers and what they are doing to them. Many of these people
are working, according to calculations, at less than the
minimum wage in these States. Of course, they are contractors,
they don't have to get a minimum wage--$9.81 an hour. That is
less than the minimum wage in my State.
Now, they don't reveal the data on the prevalence of
assaults. They don't reveal any data on how people are paid.
Uber has posted more than $5 billion in losses in the second
quarter of this year, Lyft, $650 million in loss. That is
despite employing felons, sexual predators, paying abysmal
wages. They are still losing money. This is not a sustainable
business model.
At the same time they are asking us, the United States
Congress, this committee, to consider subsidizing their
operations if they partner with transit agencies and local
governments to provide connecting service to existing public
transportation.
In surface transportation reauthorization this committee
will certainly evaluate how to incentivize greater
transportation options. Overcoming our congestion and mobility
challenges, particularly in urban areas, will require some
innovative solutions.
However, this hearing should put those not here, Uber and
Lyft, on notice that, for their long-term survival, for any
hope of ever partnering with agencies who utilize Federal
funds, they are going to have to clean up their acts, and they
have got to come forward. And if they don't come forward, we
will legislate without hearing from them.
[Mr. DeFazio's prepared statement follows:]
Prepared Statement of Hon. Peter A. DeFazio, a Representative in
Congress from the State of Oregon, and Chairman, Committee on
Transportation and Infrastructure
Madam Chair, this hearing takes on a topic that is already having
far-reaching implications on transportation and mobility in our
country. It should also serve also a wake-up call to the companies that
have flooded our roadways with disruptive technologies and investor
capital that their days of operating with little public policy and
regulatory oversight in the transportation space are coming to an end.
The transportation landscape in many cities has been upended by
transportation network companies (TNCs). Companies--led by Uber and
Lyft--that have developed transformative technology platforms
connecting riders and drivers that have revolutionized how we travel.
In a very short time, many people have come to rely on these services
as a regular transportation option.
The impacts of TNCs on traffic congestion are significant. Consider
San Francisco where the very first Uber ride was taken in 2010: in just
six years, traffic delays increased by a total of 40,000 hours while
vehicle miles traveled increased by 630,000 miles. Half of these
increases have been attributed to the rise of TNCs. Despite common
misconceptions that ride hailing ameliorates traffic, studies show
private and even shared TNC rides add more congestion and more
emissions, not less.
How these new technologies are integrated into our existing
systems, and what rules TNCs must follow, must be carefully crafted to
ensure that these services are a truly good option. Lawmakers at the
Federal, State, and local level need to think far beyond just whether
this new service gets people from point A to point B. What this new
business model means for public safety, jobs, emissions, transit
service, and other factors must also be at the center of any policy
decisions to allow these companies access to our infrastructure.
For that reason, I invited representatives from Uber and Lyft to
testify today so that we can start this discussion. Their failure to
appear at this hearing is a telling sign that they would rather suffer
a public lashing than answer questions on the record about their
operations.
Perhaps they don't want to talk about their public safety problems.
I am grateful to Representatives Smith and Suozzi for starting off this
hearing with statements on their ideas to improve the safety of ride
hailing services. I have been focused on the potential dangers of
pairing passengers with poorly vetted drivers for years. In June 2015,
I wrote to then-Uber CEO Travis Kalanick urging the company to conduct
fingerprint-based background checks. Four years later, the process Uber
and Lyft use to vet drivers is woefully inadequate leaving passengers
vulnerable and at risk for harassment or assault.
In my district, a dozen applicants with serious criminal
convictions, including a convicted murderer and a registered sex
offender, were cleared through Uber and Lyft's screening process and
allowed to drive passengers. It wasn't until the local police
department performed their own, more comprehensive background checks
that the drivers' criminal records were discovered, and they were
removed from service.
Or, perhaps they don't want to talk about what their model is doing
to drive down wages and turn our transportation workforce from a
skilled, trained pool of workers earning living wages to another
casualty of the gig economy. The tenuous existence of Uber and Lyft is
literally fueled by millions of independent contractors who see their
take home pay reduced drastically--below minimum wage in some States--
as they are made to pay fees collected by the company, self-employment
taxes, and costs associated with operating and maintaining their
vehicles.
Or it may just be a general hostility toward transparency. Uber and
Lyft don't make information about their process for deactivating
dangerous drivers public. They don't share data on the prevalence of
assaults on their platforms. They don't reveal details on how drivers
are paid. What we do know is that both these companies are struggling
since going public.
Uber posted more than $5 billion in losses in the second quarter of
2019, while Lyft reported $650 million in losses--despite paying low
wages and pushing all vehicle costs off on drivers and hiring just
about anyone they can find. Clearly, this business model is not
sustainable.
At the same time, these companies have asked the Committee on
Transportation and Infrastructure to consider subsidizing their
operations if they partner with transit agencies and local governments
to provide connecting service to existing public transportation. In
surface transportation reauthorization, the Committee will certainly
evaluate how to incentivize greater transportation options. Overcoming
our congestion and mobility challenges, particularly in urban areas,
will require some innovative solutions. However, this hearing should
put TNCs on notice that for their long-term survival, and for any hope
of ever partnering with agencies who utilize Federal funds, they are
going to have to clean up their acts.
I appreciate each of our witnesses for being here today to share
their perspective on what Congress can do to shape future policy
related to TNCs. Today's hearing is just the beginning.
Mr. DeFazio. With that, Madam Chair, I thank the other
witnesses who will be here today, and yield back my time.
Ms. Norton. I thank you, Mr. Chairman, because it is
important that this Congress do its work. That is why we are
going to act based on the testimony we hear today.
Now I would like, before proceeding with panel 1, to invite
my colleagues, Congressman Thomas Suozzi and Congressman
Christopher Smith, for opening statements for 5 minutes.
Mr. Smith or Mr. Suozzi, whichever you----
Mr. Smith. Thank you very much, Madam Chair.
TESTIMONY OF HON. CHRISTOPHER H. SMITH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY; AND HON. THOMAS R.
SUOZZI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK
Mr. Smith. Thank you very much, Madam Chair Eleanor Holmes
Norton, thank you and Ranking Member Davis for calling this
hearing--and Chairman DeFazio for that very, very passionate
set of comments, very well spoken--for the invitation to speak
on Sami's Law, a comprehensive bipartisan legislative
initiative designed to more seriously protect passengers,
especially women who utilize rideshare services including Uber
and Lyft, from sexual assault and other forms of violence.
The idea for this legislation came directly from the
grieving parents of a young woman from my district brutally
murdered by a fake Uber driver. Now, however, we know that
there are significant personal safety concerns associated with
actual Uber and Lyft drivers, as well, not just the fakes, that
are not well appreciated or publicized. And I will speak to
that more in a minute.
Last March, University of South Carolina senior Sami
Josephson left a late-night outing with her friends alone
because she had to work early Saturday morning. The
extraordinarily talented student who had recently earned a full
scholarship to Drexel University Law ordered an Uber in a
congested part of the town. A predator, pretending to be an
Uber driver, took her into the car and brutally murdered her.
Less than 24 hours later her dead body was found in a
field. The murderer was caught, jailed, and now awaits trial.
Almost immediately, Madam Chair, and notwithstanding their
excruciating agony--and you met with the parents, as did Mr.
Davis, as did Mr. DeFazio--despite that agony and the loss of
their precious daughter, Sami's parents, Seymour and Marci
Josephson, began pushing for Federal and State legislation to
better ensure that no one else loses their life or gets
assaulted by a rideshare driver or a predator who pretends to
be.
Working with the Josephsons, my good friend Tom and I
crafted a bipartisan bill that would push States to require
front license plates and, above all, scannable codes such as QR
codes, on both back passenger side windows that riders could
scan on a smartphone device to verify their ride before--and I
say again, before--entering that vehicle.
The bill provides a rider with the ability to opt out of
using a QR code by instead using a four-digit personal
authentication number to be verified--again, before entering
the vehicle.
I want to point out that the personal number was an
excellent idea suggested by the National Federation of the
Blind, who have endorsed the bill. And I would ask that their
letter endorsing the bill be made a part of the record.
These measures would not only ensure vehicle and driver
identification for riders, assist law enforcement in tracking
harmful offenders, but protects drivers, as well, by confirming
the passenger.
The legislation also makes it unlawful for anyone other
than a transportation network company like Uber or Lyft to sell
a ride-hailing sign. Today anybody can buy an Uber or Lyft sign
on Amazon or elsewhere for as little as 10 bucks, enabling the
fakes and the predators with the appearance of signage
legitimacy.
Additionally, Sami's Law requires the GAO to study the
incidents of sexual assault and abuse of riders and drivers,
and the nature and specifics of any background checks--how
credible are they--of drivers and State laws that require such
checks.
Madam Chair, in April of 2018 an investigation by CNN
pointed out that, after searching--this is their quote--
``police reports, Federal court records and county court
databases for 20 major U.S. cities found 103 Uber drivers had
been accused of sexual assault or abuse.'' However, the story
notes that the number suggests that there may be many more
overall incidents of abuse than the 103 cases.
They told the story of a woman who had passed out in the
back seat of an Uber. When she regained consciousness, the
driver was on top of her, raping her one block from her home.
The police picked up the man, John David Sanchez. They found
videos of Sanchez raping other women and abusing teenagers
dating back 5 years. In November he was sentenced to 80 years
of prison for those horrible crimes. What kind of background
check did Uber do on this particular individual who did such
heinous things?
The report notes that Uber was made aware of CNN's
reporting for the story, but the company failed to make any
executives available, and it canceled an on-camera interview
with an Uber executive. They didn't show up today, either.
Last month 14 women sued Lyft for mishandling their sexual
assault complaints against drivers. It was carried by The Hill.
Some of you may have seen it. I read each of their stories, and
that number is growing.
Again, we are talking about predators, and these are Uber
and Lyft drivers. In this case, it is a Lyft driver.
The GAO study, I think, will provide us very, very
important information about what they are doing. And it is the
final part of the bill.
Finally, due to the incomparable courage, compassion, and
advocacy of Sami's parents, Seymour and Marci, the State
version of Sami's Law, which is almost identical to our bill--
it was the template for that bill, and I want to thank the
Senate President Sweeney for his insisting that they follow
that pathway--it was signed into law by Governor Murphy of New
Jersey on June 20th. They did act very quickly. New Jersey, at
least--New Jersey citizens are more likely to be protected than
other States. And again, we are hoping that this bill will
prompt those other States to do all that is humanly possible.
We are not looking to eliminate this. We are looking to
make sure, when you get into that back seat, it is safe.
[Mr. Smith's prepared statement follows:]
Prepared Statement of Hon. Christopher H. Smith, a Representative in
Congress from the State of New Jersey
Chairwoman Eleanor Holmes Norton and Ranking Member Rodney Davis,
thank you for the invitation to speak on Sami's Law, a comprehensive
bipartisan legislative initiative designed to more seriously protect
passengers--especially women--who utilize rideshare services including
Uber and Lyft from sexual assault and other forms of violence.
The idea for the legislation came directly from the grieving
parents of a young woman brutally murdered by a fake Uber driver.
Now we know there are significant personal safety concerns
associated with actual Uber and Lyft drivers as well--not just the
fakes--that are not well appreciated or publicized. More on that in a
minute.
Last March, University of South Carolina senior Sami Josephson left
a late-night outing with her friends alone because she had to work in
the morning.
The extraordinarily talented student who had recently earned a full
scholarship to Drexel University Law ordered an Uber.
In a congested part of town, a predator pretending to be her Uber
driver brutally murdered her. Less than 24 hours later her dead body
was found in a field. The murderer was caught, jailed and awaits trial.
Almost immediately and notwithstanding their excruciating agony
over the loss of their precious daughter, Sami's parents--Seymour and
Marci Josephson--began pushing for federal and state legislation to
better ensure that no one else loses their life or gets assaulted by a
rideshare driver or a predator who pretends to be.
Working with the Josephsons, we've crafted a bipartisan bill that
would push states to require front license plates and scannable codes--
such as QR codes--on both back-passenger side windows that riders could
scan on a smart device to verify their ride before--I say again
before--entering a vehicle.
The bill provides a rider with the ability to opt-out of using a QR
code by using instead a four-digit personal authentication number to be
verified before entering the vehicle. The personal number was an
excellent idea suggested by the National Federation of the Blind--who
have endorsed the bill [https://chrissmith.house.gov/UploadedFiles/
NFB_-_HR_4686_-_Support_Letter.pdf].
These measures would not only ensure vehicle and driver
identification for riders, assist law enforcement in tracking harmful
offenders but protects drivers as well by confirming the passenger.
The legislation also makes it unlawful for anyone other than a
transportation network company like Uber or Lyft to sell a ride-hailing
sign.
Today, anybody can buy an Uber or Lyft sign on Amazon or elsewhere
for as little as ten bucks--enabling the fakes and predators with the
appearance of signage legitimacy.
Additionally, Sami's Law requires the GAO to study the incidence of
assault and abuse of riders and drivers and the nature and specifics of
any background checks of drivers and state laws that may require such
background checks.
In April of 2018, an investigation by CNN [https://money.cnn.com/
2018/04/30/technology/uber-driver-sexual-assault/index.html] pointed
out that after searching ``police reports, federal court records and
county court databases for 20 major U.S. cities found 103 Uber drivers
had been accused of sexual assault or abuse.''
However, the story notes that the numbers suggest that there may be
many more overall incidents of sexual assault than the 103 cases found
in the CNN investigation.
The CNN investigative story began with this:
``After an evening of cocktails in San Diego, a woman got into
the back of an Uber for a ride home. She was so intoxicated she
had to ask the driver to stop so she could vomit. She says she
then passed out in the backseat. When she regained
consciousness, the Uber driver was on top of her, raping her, a
block from her home, according to the police report and two
sources familiar with the investigation . . .
``Police later arrested the Uber driver, John David Sanchez,
54. When they searched his computer, they found videos of
Sanchez raping women and abusing young teenagers, dating back
at least five years.
``In November, Sanchez was sentenced to 80 years in prison for
the rape of the Uber passenger and 33 other counts against him,
including sexual assaults of at least nine other women and
children. Sanchez drugged many of his victims.''
What kind of background check and vetting did Uber driver Sanchez
get?
The report notes that ``Uber was made aware of CNN's reporting for
this story months ago, but the company failed to make any executives
available to speak on the record. It canceled an on-camera interview
with an Uber executive earlier this month.''
Last month, fourteen women sued Lyft [https://thehill.com/homenews/
news/459976-14-women-sue-lyft-for-alleged-sexual-predator-crisis-among-
drivers] for mishandling their sexual assault complaints against
drivers, failing to cooperate with law enforcement officials, and
refusing to inform victims about the status of the predators who
committed these egregious crimes.
Sami's law requires the GAO to study the incidence of assault and
abuse inflicted on both riders and drivers and report back to Congress
on the nature and specifics of any background checks by the companies
including state laws requiring such checks.
Finally, due to the incomparable courage, compassion and advocacy
of Sami's parents Seymour and Marci, the state version of Sami's Law--
nearly identical to our federal bill--was signed into law by Governor
Murphy of New Jersey on June 20th. Out of an abundance of concern for
the safety, welfare and well-being of all rideshare customers, every
state needs to do the same.
Ms. Norton. Thank you very much, Congressman Smith.
Congressman Suozzi?
Mr. Suozzi. Thank you, Madam Chairwoman. And thank you,
Chairman DeFazio and Ranking Member Davis, and all the Members
for allowing us to testify here today. We appreciate it very
much, giving us the courtesy of going first like this.
We know you have a tremendous challenge, trying to
determine the policies that are necessary to try and ensure
that the new industry of transportation network companies
provide safe, efficient, and cost-effective solutions to both
consumers and employees. It is hard to imagine that Uber and
Lyft didn't actually show up here today. It is really very
disrespectful to the committee, and it is a bad play on their
part, I think.
I am here today with my colleague to talk about Sami's Law,
which Congressman Smith and I have sponsored. I would like to
thank Congressman Smith for his leadership on this issue. He
has done a lot of hard work here.
Earlier this year, when news reports about the murder of
Sami Josephson first came to light, a New Jersey friend of
mine, and a neighbor of the Josephsons contacted me to work on
legislation to ensure that no other parent would experience
this devastating loss in the way that the Josephsons did. I
later discovered that Congressman Smith, who represents the
Josephsons, was also working on this issue.
Sami Josephson called for an Uber, entered the wrong car,
and she was murdered. This Smith-Suozzi bill works to provide
consumers with a level of safety before entering the vehicle.
Our bill's safety provisions are common sense and easy to
implement, including the following requirements for States.
One, require a scannable QR quick response code on the
vehicle window that matches the QR code on your phone and, as
proposed by the National Federation of the Blind, an audio
personal authentication number in lieu of the QR code, to make
sure that this is the correct car before a passenger enters the
vehicle.
Require transportation network companies to have
illuminated signs that are visible in both day and night, and
that are readable from 50 feet.
Three, require TNC drivers to have both front and back
license plates. Currently, 19 States require only 1 plate.
And fourth, prohibit the sale of illuminated TNC signs and
the display of such signs by individuals who are not drivers
for a TNC company. Straightforward common sense.
As we began researching this issue, I was surprised to
learn that the transportation network companies, a relatively
new business model, are regulated very differently across
States and local borders. While some States and cities, such as
New York City, have implemented rules such as creating a new
license category for high-volume for-hire services, TNCs have
been mostly left to create their own policies for preventing
and tracking violence or abuse to their passengers.
We have all heard about the horrific reports of assault and
abuse incidents involving TNC passengers and drivers. That is
why our bill also requires a GAO study on the prevalence of
assault and abuse perpetrated on riders by TNC drivers of ride-
hailing vehicles, and on TNC drivers by passengers. This data
will be instrumental in determining any other safety procedures
that may be necessary to ensure the safety of everyone who uses
a ridesharing app.
There is no way to describe the sadness and horror and pain
that Sami's death caused her family or to her community. She
lived a vibrant and loving life. She had her whole life ahead
of her. She planned to study law and had hopes and dreams. We
must do everything we can to prevent what happened to Sami and
so many others from happening to anyone else.
Congress now has a chance to come together and enact a
change which will protect people. I believe it is our duty to
do all we can to protect our constituents. I urge the entire
committee, Democrats and Republicans, to work together to try
and pass a bill such as this as soon as possible.
Thank you again for this opportunity to speak before you,
and thank you for working with us on this issue.
[Mr. Suozzi's prepared statement follows:]
Prepared Statement of Hon. Thomas R. Suozzi, a Representative in
Congress from the State of New York
Good morning. Thank you to Chairwoman Holmes Norton, Ranking Member
Davis, and Members of the Committee for allowing us to testify here
today.
I know you have a big challenge trying to determine what policies
are necessary to try and ensure that the new industry of Transportation
Network Companies (TNCs) provides safe, efficient, and cost-effective
solutions to consumers and employees.
I am here today, to speak about HR 3262, Sami's Law, which has been
sponsored by Congressman Smith and I. I would like to thank Congressman
Smith for his leadership on this issue.
Earlier this year when news reports surfaced about the tragic and
horrific death of Sami Josephson, a New Jersey friend of mine and a
friend and neighbor of the Josephson family contacted me to work on
legislation to ensure that no other parent experienced the devastating
loss of a child in the way that the Josephsons did.
I later discovered Congressman Smith, who represents the
Josephsons, was also working on the issue.
Sami Josephson called for an Uber and entered the wrong car. That
night, she was murdered. This Smith/Suozzi bill works to provide
consumers with a level of safety BEFORE entering a vehicle.
Our bill's safety provisions are common-sense and easy to
implement, including requiring states to:
Require a scannable QR (Quick Response) code on the vehicle
window that matches the QR code on your phone and, as proposed by a
disability group, an audio personal authentication number in lieu of
the QR code to make sure this is the correct car before the disabled
passenger enters;
Require TNC's to have illuminated signs that are visible in
both day and night and are readable from fifty feet.
Require TNC drivers to have both front and back license plates.
Currently, 19 states require only one plate; and
Prohibit the sale of illuminated TNC signs and the display of
such signs by individuals who are NOT drivers for a TNC company.
As we began researching this issue, I was surprised to learn that
transportation network companies (TNCs), a relatively new business
model, are regulated very differently across state and local borders.
While some states and cities, such as New York City, have
implemented new rules such as creating a new license category for
``High-Volume For-Hire Services'', TNCs have been mostly left to create
their own policies for preventing and tracking violence or abuse to
their passengers.
We have all heard about the horrific reports of assault and abuse
incidents involving both TNC passengers and drivers. That is why our
bill also requires a GAO study on the prevalence of assault and abuse
perpetrated on riders by TNC drivers of ride-hailing vehicles, and on
TNC drivers by passengers.
This data will be instrumental in determining any other safety
procedures may be necessary to ensure the safety of everyone who uses a
ridesharing application.
There is no way to describe the sadness, horror, and pain that
Sami's death caused to her family and to her community. She lived a
vibrant and loving life. She had her whole life ahead of her. She
planned to study law, had hopes and dreams. We must do everything we
can to prevent what happened to Sami from happening to anyone else.
Congress now has a chance to come together and enact change which
will protect people. It is our duty to do all we can do protect our
constituents. I urge the entire committee, Democrats and Republicans,
to pass this bill as soon as possible.
Thank you once again for allowing me this opportunity and I look
forward to working with you all to get this done.
Ms. Norton. Thank you, Congressman Suozzi. The presence of
two Members of Congress to begin this hearing only strengthens
the committee's notion that something must be done. We thank
you for your work, and we obviously will consider the
legislation.
Mr. DeFazio. Madam Chair?
Ms. Norton. The chairman would like to ask you a question.
Mr. DeFazio. I would just like to thank the gentleman.
I had no idea about the signs. I just went on Amazon and I
see a very wide selection of Uber and Lyft signs, some as low
as $8.99, illuminated. I figured these were trademarked,
distributed by the companies. But I guess, since these people
are contractors, they couldn't do that. So anybody can buy one.
That is--I had no idea. Thank you. That is mind-blowing.
Mr. Suozzi. Thank you for having this hearing, Madam
Chairwoman, for bringing these types of issues to light.
Mr. DeFazio. Right.
Ms. Norton. Certainly. Thank you for that discovery during
this hearing, Mr. Chairman.
Thank you both. And I would like to call the witnesses in
panel 1, now.
[Pause.]
Ms. Norton. I would like to welcome our witnesses: the
mayor of the city of Gary, Indiana, and president of the
National League of Cities, Karen Freeman-Wilson; director of
public affairs for COMMUTE with Enterprise, Jon Martz;
legislative counsel at The Transportation Alliance, Paul
Miller; president of the Transportation Trades Department, AFL-
CIO, Larry Willis.
I want to thank all of you for being here today. We look
forward to your testimony.
Without objection, our witnesses' full statements will be
included in the record.
Since your written testimony will be made part of the
record, the subcommittee requests that you limit your oral
testimony to 5 minutes.
Mayor Freeman, you may now proceed.
TESTIMONY OF HON. KAREN FREEMAN-WILSON, MAYOR, CITY OF GARY,
INDIANA, AND PRESIDENT, NATIONAL LEAGUE OF CITIES; JON W.
MARTZ, DIRECTOR, GOVERNMENT AND PUBLIC AFFAIRS, COMMUTE WITH
ENTERPRISE; PAUL A. MILLER, LEGISLATIVE COUNSEL, THE
TRANSPORTATION ALLIANCE; AND LARRY I. WILLIS, PRESIDENT,
TRANSPORTATION TRADES DEPARTMENT, AFL-CIO
Ms. Freeman-Wilson. Thank you, Chair Norton. Good morning.
Chair Norton, Ranking Member Davis, and members of the
subcommittee, I am Karen Freeman-Wilson, as you know, the mayor
of Gary, Indiana. And I am pleased to greet you on behalf of
the citizens of Gary and the members of the National League of
Cities, the Nation's largest organization that represents
cities, towns, and villages throughout the country.
America's cities are not one size or type, but we share
important commonalities. As city leaders we love our cities and
care deeply about how our policies impact residents and local
businesses. And, from our view, America is not doing nearly
enough in our transportation networks.
As a country, we have not invested in ourselves, our
neighborhoods, or in the next generation of transportation
solutions. Today, even the status quo is in jeopardy because of
the inadequacy of revenue in the Highway Trust Fund and mass
transit account, and the looming $7.6 billion rescission of
contract authority.
Communities are ready to work with this subcommittee to
increase the infrastructure investments that matter. We
appreciate that you recognize that transportation is changing,
and your investment strategy should change with it.
From transportation network companies, to bus rapid
transit, to micro mobility, to shared cars and autonomous
vehicles, the model of the future is shared, connected, and
fleet-driven.
Cities are the Nation's test bed for transportation
innovation, and we are looking to see what works and what needs
to work better. TNCs are a new transit option operating in only
730 of our 19,000 cities. Fueled by investor capital, TNCs rose
quickly by serving the first- and last-mile gap and point-to-
point service. Cities had to rework our ordinances and start
pilots to quickly make room for these new entrants.
TNCs show how technological advances can lead to new models
with the potential to combat some of society's most pressing
challenges: climate issues, congestion, and connecting people
of all abilities and areas. However, these ambitious businesses
are not built or operated to act in the public good on their
own.
To achieve larger goals of equitable service, better
regional service, safety outcomes, and fair wage practices, we
need guiding and nimble community policy. City regulations for
all new mobility entrants, including autonomous vehicles, are
built to embrace the best, manage the worst, and make sure it
serves residents.
There are several ways Congress can support the mobility
revolution and increase our connectivity. It starts with a
Federal focus on closing the gaps. Right now there are enough
holes in our transportation system for it to be swiss cheese.
Forty-five percent of Americans, including rural and urban
underserved communities, still have no access to public
transportation. The first- and last-mile gaps persist. TNCs are
only operating in 3 percent of all cities. More solutions are
needed.
Seniors and residents with disabilities are underserved in
small towns and large cities. These residents deserve better
mobility options.
Regional connectivity is lacking between our growing
metropolitan regions.
Finally, there are severe gaps in transportation for both
the unbanked and those without smartphone technology.
There are five actions that Congress can take to improve
our Federal local partnership in transportation mobility: one,
increase innovation investment, and capitalize on what is
happening with transportation technology; two, ramp up research
and pilots by accelerating testing, deployment, and integration
of advanced transportation technologies with cities, and grow
programs like the Mobility on Demand Sandbox grants, and bring
back challenge grants; three, allow for tailoring and
collaboration by strengthening provisions for local and
regional transportation decisionmaking as a central component
of any Federal program; four, encourage data sharing, as well
as integrated transportation planning to manage the flow
through our networks; five, we need to prepare for automation
with workforce training.
Within 20 years almost half of U.S. jobs may be at risk
from automation, and there will be a disproportionate impact on
African Americans and Latinos.
In conclusion, we may remain excited about the innovation
at our doorsteps and growing in our regions. We ask that this
committee work with us to forge a bipartisan path forward and
embrace emergent technology in new ways. Thank you.
[Ms. Freeman-Wilson's prepared statement follows:]
Prepared Statement of Hon. Karen Freeman-Wilson, Mayor, City of Gary,
Indiana, and President, National League of Cities
Good morning, Chair Norton, Ranking Member Davis and Members of the
Subcommittee:
I am Karen Freeman Wilson, Mayor of Gary, Indiana. Gary is a legacy
city, established by United States Steel as a company town in 1906. We
experienced exponential growth through the mid 1960s. Because of
deindustrialization, our population has now declined from 178,000 at
its height to 75,000 today, resulting in one of the largest percentages
of vacant and abandoned buildings in the U.S. Today, we are rebuilding
our community by diversifying our economy, by building on assets such
as transportation, our proximity to Chicago, our ovation on Lake
Michigan, and our partnership with Indiana University.
I am honored to be here today on behalf of Gary and as the
President of the National League of Cities (NLC), the nation's oldest
and largest network of cities, towns and villages across America. We
are the voice of America's communities representing more than 200
million people across our country.
America's cities are not one size or type, but we share important
commonalities. We are organized to work for our residents and invest in
our communities. We love our cities and care deeply about how our
policy choices impact residents and local businesses, and we can all
tell you that no matter how you slice or dice the numbers--America is
not doing nearly enough to invest in our transportation networks. As a
country, we are not investing in ourselves and in our neighborhoods or
in the next generation of transportation solutions that will improve
every family's livelihood. Today, even the status quo is at stake with
the inadequacy of revenue in the Highway Trust Fund and Mass Transit
Account and the looming $7.6B rescission of contract authority.
We are here today to share the innovations in transportation
happening at the local level, and we hope that Congress is not only
encouraged but emboldened to act here in these chambers:
To fix our federal transportation funding
To invest in mobility, innovation and safety that is more
than the status quo and
To partner with local communities in new ways in the next
reauthorization.
Cities, towns and villages from every state are ready to work with
this Committee to increase the infrastructure investment that matters
to rural towns and villages, legacy cities like my own, as well as our
thriving urban regions that drive our economic competitiveness. As
Congress looks to reauthorize our essential transportation programs, we
appreciate that you are looking at the infrastructure landscape and
acknowledging that transportation is changing, and your investment
strategy should change with it.
Cities' Mobility Revolution Goes Far Beyond Transportation Network
Companies (TNCs)
Cities are leaders in transportation and innovation, and we are the
transportation laboratories where new mobility models are piloted
today. From our transportation network companies, to bus rapid transit,
to micromobility, to shared cars and autonomous shuttles and buses, the
model of the future is shared, connected and fleet-driven. We are
testing them all, finding what works, and what needs to work better to
move great concepts forward. We are pleased to be here with you to
share our experience as smart cities of all sizes, types and places who
are the testing grounds for some of the most interesting, essential,
and frustrating live experiments in transportation today. I hope to
share a few of our lessons learned and ways that federal support can
help as you consider the next transportation bill.
Cities are Actively Analyzing, Reacting and Collaborating as Mobility
Technologies Evolve Quickly
TNCs use mobile technology to connect potential passengers with
drivers who use their personal vehicles to provide transportation for a
fee. Uber, Lyft, and Via now operate in about 730 of our 19,000 cities
across the U.S. and have gained popularity in many places as a new
option in the transit market. While TNCs are not so different from
their predecessors of taxis, vans, or limousine services, they
demonstrate clearly how technological advances can lead to new business
models that hold the potential to combat some of society's most
pressing challenges--transportation's contribution to climate issues,
congestion that is gridlocking our regions, and the connectivity of all
people, of all abilities and areas, to be able to engage in their
communities.
The evolution of TNCs began with one service type and quickly
became several types, including most notably pooled rides. However, the
quick evolution cycle is best seen through the recent rise of
micromobility--such as e-scooters and bikeshare--and then the resulting
absorption of the competitive providers into the dominant TNCs. The use
of micromobility platforms doubled from 2017 to 2018 to 84 million
trips. At the end of 2018, e-scooters were available in 100 U.S. cities
with a steady increase in 2019. Here is a snapshot of some of the most
popular operators:
Lime offers e-scooters in 92 cities
Bird operates in 54 U.S. cities
Lyft deploys e-scooters in 22 cities
Uber deploys JUMP e-scooters in 13 cities
Spin currently operates e-scooters in 8 cities with plans
to expand to over 100 by the end of 2019
Yet, despite this growth, only 39% of urban residents have utilized
a ride-hailing service, 16% a carsharing platform, 13% bikeshare, and
3.9% e-scooters, and these numbers would be far lower in suburban and
rural environments. Additionally, when comparing the 730 cities served
by TNCs to the more than 19,000 cities in the U.S., the reach is
incredibly low at about 3%.
Additionally, even where TNCs operate, there may be offering
adequate but not extensive service. For example, the city of Gary has
two TNCs that are readily available, and local bikeshare is available
in our Miller Beach neighborhood for the recreation on the lakefront.
Yet scooters have not been deployed in our community even after a
number of promising conversations with providers. The full capability
of new mobility is on the rise, but it is far from reaching all the
cities, towns and villages that want to see new services like
micromobility and TNCs operating.
Transit Is Where Innovation Is Happening
Some of most exciting developments in transportation today are
happening in what we have traditionally referred to as ``transit.''
Transit is a space that has been largely marginalized when it comes to
federal transportation investment, yet it is coming back to the
forefront as new partnerships form, expand and develop between cities,
technology partners and our traditional transit providers. Reimagining
transit, new mobility models and their potential within the national
transportation network is needed, and the support of our technology
partners, including TNCs, is essential.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Figure 1: Transportation funding allocations by city size grouping
Reimaging transit also extends to the traditional fixed rail and
buses that have received federal investment, and transit providers are
fully invested in this. Through the traditional transit sector's
leadership in open-data sharing and integrated full trip travel
planning, they have opened the door to new mobile app-based services
like bikeshare, TNCs and now scooters. Even small services providers
like Tupelo Transit in Mississippi are using mobile apps to improve
service and reliability. Additionally, more than a dozen transit
providers have explored shared service with TNCs to mixed success, but
through testing and tinkering, new models are being vetted.
TNCs Can Fill Gaps in Transit Service in a Complementary Way
Cities are finding that the adoption curves for new technology-
driven transportation options are especially high when they are solving
a known transit gap. Traditional buses and rail systems are structured
for throughput and service that reaches into as many areas of a
community as possible, but this leaves gaps such as short distance
trips of less than three miles, the first and last mile between public
transportation hubs and final destination trips. Transit providers have
lamented about these challenges for decades, but these remained
persistent challenges that were unachievable with today's fiscally
constrained transit funding and financing models.
While data and time are still revealing the intricate relationship
between traditional transit and new mobility services, public core
transit does not appear to be replaceable by new entrants. Yet,
connections to and from fixed transit fWhile systems can be provided
effectively with new models like TNCs and micromobility which benefit
both traditional and new mobility partners. Some studies indicate that
TNCs can play a critical role in connecting riders to transit more
often than distancing them, but others show that upon TNCs entry, some
transit systems have seen about a 1.3% to 1.7% drop in heavy rail and
bus ridership. Taking the longer view, since 1997, the rate of public
transit ridership has still increased at a greater rate than the
population growth (21% vs. 19%). Cities are both embracing the role
that new entrants can provide but also ensuring that they do not
undermine the core transit infrastructure that runs their cities, but
TNCs clearly will be viable in places where limited or no transit
service exists which is an extensive area of the U.S.
Forty-five percent of Americans still have no access to public
transportation and many others only have limited service options. Given
that TNCs are providing two of the most expensive elements--vehicles
and drivers--places like Arlington, Texas, where individual cars were
the primary transportation option, see transit through TNCs as viable.
The city of Arlington decided to create a ride-sharing shuttle program
with a TNC. For $3 residents can arrange to be picked up from one
location and be dropped off at another. The service is available Monday
to Saturday, wait times are guaranteed to be less than 12 minutes, and
the vehicles can transport multiple residents at once saving time and
money. Additionally, Arlington has also launched one of the first
autonomous shuttle services in the U.S. to serve the city's
entertainment district transporting visitors from the parking lots to
the attractions. When capital can be organized for vehicles and
leveraged with technology and planning, mobility options that
previously were dismissed are now gaining new appreciation.
Strategic Choices Need to be Made about Mobility Options and Tailored
to Each Place
When TNCs first arrived in cities, most city ordinances were
written for traditional taxi and limousine service with some state laws
leading to a disruptive entry. Yet cities proved they would be able to
quickly incorporate new technology and new entrants like TNCs and do it
strategically so as not to undermine existing essential transit
services or create unintended consequences for riders or workers. While
healthy competition is beneficial, some externalities, market
manipulations and safety concerns raised by TNCs were seen as
undermining many communities' goals. Additionally, extensive campaigns
at state capitols to preempt traditional city regulations that apply to
TNCs has led to blanket regulations in many areas that do not ensure
safety, access for the disabled, equitable service, appropriate wages,
and many other considerations that are likely poorly handled by a one-
size-fits-all approach.
City leaders must walk a fine line, working to embrace change and
innovation while simultaneously prioritizing safety and developing
context-sensitive city solutions that work for their community.
Overall, cities' regulations for TNCs are now structured to embrace
their service with appropriate policy guardrails to protect against
unintended consequences. One way that some cities and states are
managing externalities is by instituting fees on TNCs. An effective
example of adjusting for externalities has been in Washington, D.C.
with its heavy urban and suburban metro region and heavy core rail
system as well as extensive bus service. Due to the extreme influx in
and out of the city, congestion is high and incentives for transit use
and shared rides help all users move throughout the region. The
Washington, DC city council voted in June of 2018 to raise the tax to
6% on TNCs operating in the city, with revenues going to improve the
city's metro system. While these costs are passed along to drivers as
fees and riders as higher fares, the city is leaning into their policy
goals of investing in adequate transit to decrease trip times and
congestion which ultimately riders of TNCs benefit from. Each city's
ability to intentionally and nimbly manage local services using a
tailored approach remains essential.
Equitable Service Must be Achieved to Open Economic Opportunity to All
Areas
Providing equitable transportation options is one of the greatest
potential offerings of new mobility options. Some cities, such as
Columbus, Ohio, and Los Angeles, California, are working with companies
to deploy in underserved areas to ensure these new pilots and programs
align with their goals around equity. Many cities are also working with
companies to provide solutions and access for unbanked users which
represent a large audience of potential users. Interventions include a
range of both initial and eventual caps per vendor as well as
geographic distribution quotas.
Equitable service also means better connecting our aging and
disabled residents to services and their community. Several communities
are operating excellent on demand services for seniors from Caldwell,
Idaho, to Kettering, Ohio, but more support is needed nationally that
is aligned with the growing senior population. The Ride Connection in
Clackamas, Multnomah and Washington counties and the LIFT programs in
Portland, OR, are attempting to increase transportation equity in the
region. Ride Connection is a non-profit organization that provides
public transportation options, to door-to-door and shuttle services to
senior, disabled, and low-income residents. Residents can utilize the
service to go grocery shopping, get to medical appointments, or take
part in social activities that they otherwise might not have access to.
The service allows residents that have difficulty utilizing traditional
forms of transit to remain connected to their community, providing
nearly 500,000 rides supporting over 2,000 residents. Additionally, the
city also offers a paratransit service, LIFT, which services seniors
and residents with disabilities along public transit routes. Residents
can request singular or recurring pick-ups to get around the city.
Paratransit service is one of the most expensive obligations of
providing transit service in most communities, and every effort should
be made to realign programs and resources to fulfill this essential
service for seniors in all communities of all sizes.
Preparing for Automation Begins Now and with Workforce Training in Mind
Within 20 years, 47% of U.S. jobs may be at risk of replacement by
new technologies including automation and artificial intelligence with
many being in the transportation sector. TNCs have been vocal about
their plans to automate their service in the future. There are roughly
53 million freelance workers today, comprising 34% of the total U.S.
workforce. Uber and Lyft, the two most popular rideshare companies,
employ 5.3 million drivers worldwide, and it is estimated that they
employ about 3.5 million in the U.S., a little less than half of which
are estimated to be full-time drivers. That job loss is predicted to be
unequally distributed, affecting individuals with lower levels of
education and African-American and Latino populations with greater
severity. The future of work may change, but our preparation to train
and shift workers into new opportunities begins today by investing in
workforce training. Nationally, attention must be paid to wages and the
failure of household income to keep pace with the cost of living,
including most significantly housing.
Congress, Partner with Cities on Effective Regional Transportation
Mobility Solutions
New transit and mobility solutions deserve a larger federal effort
because they have the capability to increase mobility options and
accessibility, while simultaneously ensuring safety and reducing
emissions, collisions, and congestion.
Increase Innovation Investment: Congress should put emphasis on
innovation investments where there is flexibility to build, operate and
maintain local and regional transportation that is responsive to new
technology and citizens. Recognizing the significant possibilities
within the transportation technology sector, a significant new effort
to ramp up block grants or new funding directly for ground-level local
partnerships with technology players is essential to a achieving a
modern transportation system. The Mobility on Demand Sandbox Grants
remains an excellent program for this in addition to larger
transportation technology efforts that previous Administrations have
championed such as the Smart Cities Challenge.
Allow for Tailoring and Collaboration: Congress has the opportunity
to strengthen provisions for local and regional transportation
decision-making as a central component of any federal program. All
federal testing should be done in collaboration with cities and include
a robust public engagement process and appropriate regulations that
ensure the unique needs of each municipality are accounted for.
Adoption of new technologies should also be linked to solutions to
address persistent challenges including funding, data for research, and
integrated transportation planning.
Ramp Up Research and Pilots: City leaders welcome advanced
technologies that can improve safety, reduce congestion and decrease
costs within the transportation networks. It should be a federal policy
to accelerate the testing, deployment and integration of advanced
transportation technologies in partnership with cities, including
automated, connected, electric and shared vehicles of all types. The
federal government should consider ramping up research and development
while increasing local pilots and demonstration projects of new
technologies through federally-financed programs to provide the data
needed for effective research and testing.
Support Transportation Planning and Data-Sharing: Cities have
embraced the data behind transportation fleets to begin to manage
rather than just influence the flow through our streets, sidewalks, and
rails. Federal policy must encourage data-sharing, integrated
management and operation of all transportation systems at the regional
and local levels, maximizing the use of information technology for
management of traffic and transit, monitoring structural integrity, and
enforcement for public safety. City commitment to data-sharing
leadership is unmatched, and we continue to press our technology
partners to work closely with us to ensure the system outcomes for our
residents and their customers is clear.
Cities, towns and villages remain excited about the innovation at
our doorsteps and growing in our regions. We ask that this Committee
work with local leaders to forge a bipartisan path forward on these
emerging transportation technology investments.
Thank you.
appendix
``City of the Future: Technology & Mobility'' by the National League of
Cities Center for City Solutions and Applied Research
[The report is retained in committee files and is available online
at https://www.nlc.org/sites/default/files/2016-12/
City%20of%20the%20Future%20FINAL
%20WEB.pdf.]
Ms. Norton. Thank you very much. Thank you very much, Mayor
Freeman-Wilson.
And we must move now to Jon Martz, director of government
and public affairs, COMMUTE with Enterprise.
Mr. Martz. Good morning and thank you, Chair Norton and
Ranking Member Davis and Chairman DeFazio for the opportunity
to present COMMUTE with Enterprise to the committee.
Again, my name is Jon Martz, and I am one of the original
ride sharers. Decades before the iPhone apps and the Internet
of Things, I worked for the Chrysler Corporation.
In the late 1970s, during the oil embargo, we heard about
this program in Minnesota. 3M was providing employees with vans
to get to and from work. We at Chrysler thought this was a
great idea and began talking with employers around the Nation
about developing similar programs. This was the beginning of
ridesharing or, as we call it, vanpooling. That small program
in Minnesota has grown into one of the largest and fastest
growing modes of public transportation in the Nation.
And I am here today on behalf of COMMUTE with Enterprise.
Enterprise's journey in vanpooling began almost two decades
ago, when it started offering vanpools in southern California.
Since then, Enterprise has become the largest vanpool service
provider in the Nation, with 12,000 vehicles in service, and
more than $425 million of at-risk private capital providing
public transportation. Our most successful programs are in
public-private partnerships, and we currently have more than 75
such arrangements across the country.
Let me briefly describe what a vanpool is. Vanpools are a
lot like carpools, just a little bit bigger. Commuters with
common work schedules and destinations ride to and from work
each day in a comfortable 7- to 15-passenger van. We provide
commute groups their vehicle, insurance, and maintenance to
keep the van running in optimum condition. One person
volunteers to be the primary driver of the van, and the
participants decide the driving, routing, and other
arrangements themselves, supported by our team.
Typically, our customers commute each day 30 to 50 miles
one way. Participants are assessed a monthly fee that is paid
by the riders, their employers, or both. COMMUTE with
Enterprise provides service in rural areas, including projects
at White Sands Missile Range in New Mexico, where we have more
than 80 vans providing job access to 600 individuals, and in
Florida, where we work with the Florida DOT to provide a job
access program for rural and economically distressed
communities.
We also have programs in exurban and urban areas, such as
the 1,340 vanpools in partnership with L.A. County metro.
Additional case studies of our projects can be found in my
written testimony, and there is about a dozen.
By reducing over 1 billion passenger-miles a year, our
efforts put us as a top 10 transit agency when considering
annual passenger-miles. The only difference is we provide
service across the Nation, rather than in just one location.
Vanpooling is, by far, the safest mode of public
transportation, according to the National Transit Database
statistics. In addition, we are, by far, the most efficient
mode. For example, our partnership in Gulfport, Mississippi,
which, by the way, began as a recovery effort following
Hurricane Katrina, provides the region with 60 percent of the
passenger-miles for less than 0.5 percent of the public subsidy
of the agency. Similarly, in San Diego, California, we provide
about 18 percent of the passenger-miles in the region for just
2 percent of the overall public subsidy.
As I mentioned, our programs work best in partnership with
public agencies. Public agencies can use Federal funds to
create vanpools, vanpool programs, in the same way that you can
use Federal funds for buses. We comply with all FTA
requirements, including ADA, labor laws, and Buy America. Our
vehicles are assembled in plants across the Nation, including
Liberty, Missouri; East Liberty, Ohio; and the South Side of
Chicago.
We strongly believe that more can be done to encourage the
use of high-performing and innovative transportation solutions
like vanpooling.
First and foremost, we believe a new grant program should
be created that provides cities, counties, and other municipal
agencies with funding to utilize innovative transportation
solutions, both new and old, on the condition that the service
follows all applicable FTA requirements and creates new service
to areas that are not served or are underserved. This program
should receive separate funding from the core transit program.
We believe that, if a project is successful, it should then
be incorporated into the region's core program of projects, so
long as it meets certain conditions. We are working with
Congressman Scott Perry on such a proposal in hopes of
providing a service to the thousands of his constituents
traveling more than 60 miles one way each day to work in either
Baltimore, Philadelphia, or here in Washington, DC.
Also, as additional transit funding is hopefully secured in
reauthorization, we believe a significant portion of any new
transit dollars should be allocated through existing
performance formulas to encourage agencies to look at highly
efficient service options such as vanpooling and micro transit
for job access, first-last mile, and rural transportation
needs.
Thank you for the opportunity, and I would be happy to
answer any of your questions.
[Mr. Martz's prepared statement follows:]
Prepared Statement of Jon W. Martz, Director, Government and Public
Affairs, COMMUTE with Enterprise
Good morning, Chair Norton, Ranking Member Davis, and Members of
the Highways and Transit Subcommittee. My name is Jon Martz, Director
of Government & Public Affairs for COMMUTE with Enterprise. For more
than 40 years, I have been fortunate to work in the transportation
sector in a variety of roles which enabled me to work with countless
public transit agencies, State Departments of Transportation and
Metropolitan Planning Organizations to problem solve and advance
solutions on commuter vanpooling and public transportation issues.
For several years, I also had the opportunity to serve here in
Washington, D.C. as a consultant to the Office of Budget and Policy of
the Federal Transit Administration (FTA) on private sector involvement
in public transportation, transit service contracting, innovative
transit financing, and as a traveling instructor of activity-based cost
analysis for transit agencies.
I am grateful for the opportunity to appear on today's
distinguished panel and before the subcommittee to share our company's
perspective on our innovative commuter vanpooling program and to offer
a number of policy recommendations for your consideration as you seek
to reauthorize the Fixing America's Surface Transportation or FAST Act.
I'd like to begin my testimony today by providing an overview of a
public-private vanpooling partnership program that I, along with dozens
of my colleagues, have sought to implement in jurisdictions throughout
the country to provide meaningful benefits to commuters, employers, and
communities.
Launched in 1994, COMMUTE with Enterprise, is a service of
Enterprise Rent-A-Car and has become one of the largest and most cost-
effective vanpool operations in the nation which offers immediate
savings, safety and sustainability to those we partner with. Every
business day, COMMUTE with Enterprise takes 67,000 individual cars off
the road, eliminating 1.4 billion commuter miles driven each year and
eradicating the need for 67,000 parking spaces. Additionally, 1.1
billion pounds of carbon emissions are reduced by our program with
Enterprise customers annually.
Furthermore, based on annual passenger miles, COMMUTE with
Enterprise would rank as one of the largest U.S. public transit
agencies today. By providing an industry-leading selection of
vehicles--including minivans and large passenger vans--COMMUTE with
Enterprise offers customizable programs that help both rural and urban
communities across the nation overcome transportation challenges, both
long- and short-term.
How does vanpooling work?
Put simply, vanpools are like carpools--just a little bigger.
Commuters with common work schedules and destinations ride to and from
work each day in a comfortable, seven- to fifteen-passenger van.
Companies like COMMUTE with Enterprise provide commuting groups with
access to their desired vehicle and access to proper insurance and
mechanical maintenance to keep their van running in optimum condition.
Participants are assessed a monthly fee that is paid by the riders,
their employers, or both.
The cost of gas is also shared among those in the vanpool group. On
average, our customers commute upwards between anywhere from 30 to over
100 miles one way each day from origin to destination.
One person volunteers to be the primary driver of the van. The
participants decide the driving, routing, operating and gas cost
sharing arrangements themselves. Riders plan trips that accommodate
pick-up and drop-off locations at a starting point or along the
commuter's route. Riders usually meet at a pickup location, such as a
park & ride lot or a shopping center.
The needs of the vanpool groups are supported by the extensive
Enterprise Rent-A-Car neighborhood network. From working with employers
to help create vanpool groups to providing an industry-leading
selection of vehicles and customizable vanpool programs, Enterprise
helps eliminate common barriers communities face in creating vanpool
services, particularly in small urban or rural areas where public
transportation may be limited.
Who is COMMUTE with Enterprise?
Vanpooling began more than 40 years ago and was a strategy that
employers utilized during the oil embargo of the 1970s. The success of
the program prompted an expansion to other cities across the U.S. Our
vanpool fleet now stands at 12,000 vehicles . . . testimony to our
continuing success!
We provide service in both large urban areas and small rural areas.
Some of our most noteworthy efforts are in rural and exurban areas of
the country.
COMMUTE with Enterprise is one of the largest public transportation
service providers in the United States. Reducing well over 1 billion
passenger-miles a year, our efforts put us as a top 10 transit agency
when considering annual passenger-miles?
Notably, our vanpool fleet represents a private capital
investment of more than $425 million in the provision of public
transportation service . . . and we can do more!
So, where are we today?
Our public/private partnerships enable us to provide regional
vanpool services in more than seventy-five (75+) U.S. cities.
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Vanpooling is one of the Most Efficient Modes of Public Transportation
Vanpooling is one of the most efficient forms of public
transportation. And, it requires a comparatively small amount of
funding to be successful, especially when you consider the private
sector is supplying the vehicle.
In fact, most of our public sector partners spend a small
percentage of their transportation budget to subsidize vanpools. And
this is true in rural areas, as well urban areas. Vanpooling's
efficiency is not limited to large urban areas where one would assume
the scale of operations would be a major factor.
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Examples of Efficiency
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San Diego CA--Several years ago, the San Diego Association of
Governments (aka SANDAG), contracted with COMMUTE Enterprise to provide
vanpool services to commuters in San Diego County.
Today, 727 vanpools provide 18.2% of the total passenger-miles
carried by the all modes of public transportation provided by San Diego
MTS and SANDAG, yet vanpool subsidies consume only 2.4% of these two
agency's combined subsidies.
Vanpools are the Safest Mode of Public Transportation
Vanpools are the safest modes of public transportation, both in
terms of fatalities and injuries. In fact, vanpooling is safer than
driving or riding in your personal automobile. This long-term history
can be attributed to several reasons:
Vehicles . . . In most cases, commute groups are provided
a new vehicle when they start vanpooling. And, our typical vanpool
vehicles are replaced after reaching 4 years, 100K miles (whichever
comes first).
Maintenance . . . Preventive maintenance (in accordance
with manufacturer's recommendation) is provided by Enterprise.
Unscheduled repairs are rare, but when they do occur, Enterprise is
there to address the problem.
Drivers . . . Vanpool drivers are unpaid, volunteers from
within the commute group. In most cases, the driver is not a stranger
to the group.
All drivers must apply for approval before they are given the
keys. Each driver's MVR (Motor Vehicle Record) will be checked
annually. Each approved vanpool driver must meet the following
criteria:
Possess a valid driver's license.
Be 25 years of age or older *.
Have no more than two moving violations and/or at-fault
accidents in the previous three years and no more than four moving
violations and/or at-fault accidents in the previous five years.
No major convictions in the past five years (i.e.
driving under the influence of alcohol or drugs, driving while
impaired, failure to stop and report an accident, driving while license
is suspended or revoked, possession of drugs or open containers of
alcoholic beverage, reckless driving and/or participating in a speed
contest, drag or highway race, or attempting to elude authorities).
Be licensed a minimum of five years in the United
States.
Meet and comply with any laws/criteria required by the
state where the vanpool is operated (i.e. medical requirements, drug
screen).
If a vanpool driver is traveling too fast or erratically, the
vanpoolers are not shy about letting their driver know of their
displeasure. And, given they are sitting directly behind the driver,
their comments are always heard. Because the vehicles are much like the
personal vehicles of most commuters, it is not necessary to put vanpool
drivers through extensive driver training courses. The drivers are
oriented to the few differences in the vehicles and encouraged to drive
the vehicles individually before starting the vanpool.
Environment . . . Most of our vanpools travel in traffic
on paved roads at an average speed of 35 miles per hour. A notable
percentage of vanpools in large urban areas travel on barrier-
separated, high-occupancy vehicle lanes. Parking of vehicles is
typically off-street in garages or surface lost provided by their
employer.
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Policy Considerations
Innovation Should Support and Enhance Transportation--
There is much to be gained from innovation including expanded service,
cost efficiencies, and environmental benefits. However, we should not
rewrite policies designed to protect the public because disruptive
companies have decided that they should be exempt from existing polices
instead of following the rules. Rather, we believe that this Committee
should look to encourage and enhance the ability to utilize innovative
and high-performing technologies and replicate business models that
will expand and enhance services.
Innovation in transportation comes in forms other than an
``app''--Numerous terms are being used to describe new ways to access
transportation: carsharing; ridesharing; ride hailing; vanpooling; ride
matching, peer-to-peer rental, point-to-point rental, and the list goes
on. It is essential that policy at all levels be consistent and
tailored toward the underlying service being provided--regardless of
the means that the service is provided. All these terms are used to
describe the same three basic transportation services that have existed
for decades and prior to the advent of smartphones:
1. For-hire ride-hailing--Often referred to as Transportation
Network Companies (TNCs), this business line, like traditional taxicabs
and limo services, provides a service that the Associated Press has
labeled ``ride-hailing.'' A consumer pays to have a driver transport
them from, and to, locations of the consumer's choosing; and the driver
intends to profit by providing the transportation to the consumer.
2. Car and vanpools--The correct term for organized car and van
pools is traditional ``ridesharing.'' It includes technology platforms
that connect people who want to carpool; and vanpooling, which is the
service of providing a large occupancy vehicle for people who want to
commute together. In ridesharing, the driver of the vehicle is a
volunteer and contributes to the cost of the transportation.
3. Car rental/Carsharing--If you are paying someone to allow you
to personally operate a vehicle you don't own, whether for an hour, a
day, a week or a month. This also includes peer-to-peer car-sharing,
where private individuals rent their vehicle to another private
individual.
Provide local and municipal governments with access to
Federal transit funds--Federal transit funding is directed to transit
agencies and quite often local and regional governments are not
provided access to such funding, despite a need and desire to initiate
programs such as long-distance commuter services, first/last mile
connections, microtransit, or enhance demand response. A funding stream
should be made available to regional and municipal governments that is
separate from core transit funding.
Reward Innovation & Performance--As Congress looks to
authorize additional transit funding, we believe that a significant
portion of the new transit dollars should be allocated through existing
performance formulas to encourage agencies to look at highly efficient
service options such as vanpooling and microtransit to provide job
access, first-last mile, and rural transportation needs.
Policy Recommendation
1. Create a High Performing & Innovative Transit Grant Program
Funding should be made available to cities, counties, transit
agencies, and municipal governments. The funding should be used to
provide innovative mobility solutions such as microtransit, commuter
vanpooling, first/last mile connections, and rural access to jobs and
healthcare under certain conditions:
The funding would be to provide new service to areas
that have little to no existing service;
The new service does not detract from existing service
that is being provided; and
The new service must meet all existing requirements
including, Buy America, ADA and Labor protections.
If the initial project is successful, the project should be
included in the core program of projects for continued funding,
provided it continues to meet the conditions for eligibility.
2. Allocate A Portion of New Transit Funds Through the Performance
Portion of the Formula
Currently only about 7% of a region's transit allocation comes
from the performance portion. We believe that as Congress invests more
in the transit program, at least half of all new formula dollars should
be allocated based upon the performance section.
Under this proposal all transit agencies would see their
formula allocation rise. But, there would be an incentive to look
towards operationally efficient and innovative solutions to provide
service.
Project Case Studies
Rural Vanpool Project: White Sands Missile Range, NM
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Since August 2008, Department of Defense and non-DOD employees
commuting to work from homes in Las Cruces NM (30+ miles away), El Paso
TX (45+ miles away), and Alamogordo NM (50+ miles away) to White Sands
Missile Range, McGregor Range, William Beaumont Army Medical Center and
Holloman AFB have been afforded the opportunity to participate in the
COMMUTE with Enterprise vanpool program. Today, more than eighty (80)
vanpools serve 600 commuting participants.
The demonstrated success of COMMUTE's efforts at the White Sands
Missile Range has prompted the NMDOT to contract with COMMUTE with
Enterprise to provide vanpool services to commuters traveling to and
from the cities of Farmington, Santa Fe, Los Lunas, and Las Cruces.
The statewide vanpool program aims to help expand and enhance
regional transportation options by providing a flexible public
transportation alternative to commuters who are not currently served by
fixed route service, those working outside of fixed route schedules, or
those with longer commutes--typically exceeding 20 miles each way.
Program participants traveling to and from Farmington, Santa Fe,
Los Lunas, or Las Cruces can also obtain a 33 percent discount on the
monthly rate, while also helping increase federal transit formula grant
funds in these areas to potentially make the program financially self-
sustaining. The NMDOT-COMMUTE partnership currently serves 36 vanpool
groups with more than 250 passengers per day.
Statewide Vanpool Program: MichiVan
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MichiVan, a long-standing partnership between Michigan MDOT and
COMMUTE with Enterprise, provides vanpool services to commute groups
throughout the State of Michigan. Under the MichiVan program, the
passengers pay a flat fee as low as $55 per month (based on monthly
commute mileage and the size of van).
Today, more than 525 vanpools are in service in this program. The
MichiVan commuter vanpool program is THE most efficient public
transportation program in the State of Michigan.
Additionally, both urban and rural public transit agencies in
Michigan gain an allocated share of the Net Gain in FTA formula funds
generated by the miles traveled by the commuter vanpools in Michigan's
urban and rural areas of the state . . . an estimated $4.3M annually.
Emergency Recovery: Gulfport/Biloxi, Mississippi
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Coast Transit Authority's (CTA) ``Coast Commuter'' vanpool program
is designed to assist employers on the Mississippi Gulf Coast in
recruitment and retention of employees and to provide cost and stress
reducing options for commuters.
In the aftermath of Hurricane Katrina, the devastated towns of
Biloxi and Gulfport struggled to find ways to return displace residents
to the cities to rebuild and continue their lives in those communities.
COMMUTE with Enterprise surveyed the companies, reviewed their
employee commuting habits, mapped out where all employees live and
identified distances and clusters of residents. Based on the
information gathered, COMMUTE with Enterprise deployed the vans needed
to transport participants, and it recruited and trained the drivers
from among the potential commuters.
Currently, the vanpools primarily serve the Huntington Ingalls
shipyard in Pascagoula, Mississippi, and various federal agencies
operating at the Stennis Space Center, also located in this rural area.
Of the 35 vanpools in operation today, 15 originate in rural
communities. Vanpools are available to accommodate all work shifts at
these facilities with enough interested commuters to start a pool.
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Job Access: Florida Rural Vanpool Program
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The Florida DOT identified 28 of 32 rural counties as ``Areas of
Critical Concern.'' These three ``Areas of Critical Concern'' have
similar economic conditions:
Low per capita income
High unemployment
Low wages compared to the state averages
High percentages receiving public assistance
High poverty levels compared to the state average
A lack of year-round stable employment opportunities
COMMUTE with Enterprise proposed a public-private partnership to
provide vanpool services to get individuals to jobs in adjoining
counties. Traditional public transportation was not available or was
considered inadequate to meet the needs of the population.
Today, more than thirty-five (35+) vanpools serve individuals in
these areas who commute to jobs in the coastal counties. The program
could grow, and more people be served, but historical funding
constraints have limited the ability of COMMUTE with Enterprise to grow
the program.
Urban Commuter Partnership: Los Angeles Metro
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In a public-private partnership with the Los Angeles County
Metropolitan Transportation Authority (LACMTA), COMMUTE with Enterprise
provides vanpool services to commuters whose origin and/or destination
is Los Angeles County. The average one-way commute distance of the
vanpools is 50 miles.
The capital commitment to serve the program represents an at-risk,
private capital investment of more than $45M in the provisions of
turnkey public transportation services in Los Angeles County.
Today, the 1,365 vanpools provide 8.1% of the total passenger-miles
carried by all modes of public transportation provided by LACMTA, yet
vanpool subsides consume only 0.6% of the operating subsidies of Metro.
Job Access: Nebraska Statewide
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In June 2017, the Nebraska Department of Transportation engaged
COMMUTE with Enterprise to provide vanpool services to commuters
throughout the State of Nebraska. The State agency provides limited
capital assistance of $400 per month to qualifying commute groups
willing to vanpool to/from work each day. The balance of the capital
expense and 100% of the operating expense is to be recovered via
passenger revenue.
Flooding near Nebraska City
Earlier this year, Missouri River flooding wreaked havoc in
eastern Nebraska. Major thoroughfares were closed and getting to/from
work became a significant challenge for employees and employers trying
to continue their business operations. The flooding presented a
seemingly insurmountable challenge for the Plant Manager and his Human
Resources staff at the Cargill Protein Nebraska City facility. How
would the company get its employees to the worksite to keep up
production?
A call was placed to the Nebraska DOT who referred the
challenge to COMMUTE with Enterprise. The vanpool service program was
quickly offered to the team at Cargill, who completely embraced the
idea. Home locations and shift information was supplied and analyzed,
language barriers were addressed, vanpool group formation meetings were
hosted, and services were overwhelmingly accepted. Today, 30 vanpool
groups commute to and from the Nebraska City facility . . . serving
more than 25% of the facility's workforce.
The statewide vanpool program in Nebraska currently stands at 46
vanpools with 3 more scheduled for delivery later this month (October
2019). Most of the vanpool groups commute from suburban and exurban
locations on the periphery of Omaha to various locations in Lincoln (an
hour's drive each way), or the groups commute to rural worksites in
small towns like Nebraska City or Schuler (both an hour away from
Omaha).
Note: COMMUTE with Enterprise has made an upfront capital
commitment of nearly $2M to serve these commute groups. The Nebraska
DOT will be billed $20k each month on a pay-as-you-go basis for these
50 vanpools. Nebraska DOT is gaining significant leverage . . . $250K
a year in federal financial assistance (or $1M over the life of the
fleet). There is no financial obligation required for out-of-service or
spare vehicles, or for non-appropriation of future funds. The private
sector absorbs 100% of the financial risk, and 100% of the insurance
risk.
Design-Build-Finance-Operate-Manage (DBFOM) . . . a true P3
partnership in public transportation in a mostly rural state.
Job Access: Eugene and Salem, Oregon
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Valley Vanpool is a partnership between the Cascades West Council
of Governments, the Salem Area Mass Transit district (aka
``Cherriots''), the Lane Transit District (``LTD'') of Eugene, and
COMMUTE with Enterprise.
The partnership was launched in 2002 to streamline service,
promotion, and recruitment for commuter vanpools in the Willamette
Valley. The 2017 National Transit Database Reporting ``Agency
Profiles'' for both Cherriots and LTD show forty-seven (47) vanpools in
service in the Willamette Valley.
In the Eugene area, the seventeen (17) commuter vanpools
carry 5% of the total passenger-miles carried by the regional system,
yet vanpool subsidies consume only 0.05% of the agency's operating
subsidies. The average trip length is 50 miles, and each vanpool
carries an average of 5 passengers daily.
In the Salem area, thirty (30) commuter vanpools carry
17% of the total passenger-miles carried by the Cherriots system, yet
vanpool subsidies consume none of the agency's operating subsidies. The
average trip length is 35 miles one-way, and each vanpool carries an
average of 5 passengers daily.
Ms. Norton. Thank you very much, Mr. Martz.
Paul Miller, legislative counsel, Transportation Alliance,
we will hear your testimony for 5 minutes.
Mr. Miller. Chair Norton, Ranking Member Davis, Chairman
DeFazio, and members of the committee, my name is Paul Miller,
and I serve as legislative counsel to The Transportation
Alliance.
The Transportation Alliance is the oldest and largest trade
organization in the for-hire passenger transportation industry,
with members operating over 100,000 vehicles and serving 900
million passengers per year.
I applaud this committee and its leadership for holding
this important hearing on transportation network companies
today.
I am here today because TNCs have been dangerously careless
in their approaches to safety when it comes to properly vetting
drivers. The number of TNC victims are astounding. According to
a story done by CNN in April 2018, the news outlet was able to
verify that 103 Uber drivers had been accused of assault or
abuse.
We believe the numbers are much, much higher. Between 2013
and 2018, The Transportation Alliance tracked media stories
involving 395 sexual assaults at the hands of Uber and Lyft
drivers. This is an epidemic, and something needs to be done.
We have read the Boston Globe's chilling story 2 weeks ago
of just some of the numerous women in Boston who have been
sexually assaulted by Uber and Lyft drivers. As one survivor
said after realizing she had been charged for a Lyft ride given
by her violent attacker, ``They got paid for me being sexually
assaulted. Lyft is profiting from this.''
We have seen stories of convicted felons, including
murderers and registered sex offenders, who have slipped
through the so-called background checks of these companies. We
all know the tragedy of Samantha Josephson, which affected even
the halls of this great institution. Sami was a young college
student from New Jersey. She was out with friends, decided to
go home early. Samantha got into what she believed was her Uber
vehicle, only to realize too late that the car she entered was
fake.
Unfortunately, this is a common occurrence, because there
are no significant marking requirements for these vehicles.
Samantha never made it home because disguising oneself as a
fake Uber driver is all too easy today.
And who can forget the threat against your own colleague by
an Uber driver who tweeted to Senator Roy Blunt, ``I can't wait
to shoot you in the face one by one.'' One can only imagine
what might have happened, had the Senator or any elected
official been unlucky enough to have been paired with this
driver.
These incidents can be avoided if TNCs would just adhere to
one of the most rigorous but also most basic safety standard: a
simple fingerprint. We believe any contractor providing for-
hire transportation services paid for in full or in part by the
Federal Government must first be required to pass a
fingerprint-based national background check. It is especially
important at the moment because, as we speak, the General
Services Administration is in the process of putting together a
request for proposal which is looking to outsource some of the
Federal Government's transportation needs to TNCs. This must
not be allowed to happen, unless TNCs fingerprint every driver.
TNCs like Uber and Lyft will argue fingerprint background
checks are costly. They will argue fingerprint background
checks discriminate against some Americans. These are simply
myths. In most major cities in the United States taxicab
drivers are required to pass fingerprint-based criminal
background checks conducted by State or local authorities, and
for good reason. A recent peer review study by a team of law
enforcement experts, ``One Standard for All,'' found that name-
based background checks are 43 times more likely to have errors
than fingerprint background checks.
Even the company Uber uses to run name-based checks on its
drivers has acknowledged fingerprint background checks are more
secure because fingerprinting helps us uncover criminal history
not discovered through traditional methods, offers extra
protection to aid in meeting industry guidelines, and helps
prevent fraud.
And most notably, in filings to the Security and Exchange
Commission prior to its stock market debut this year, Uber
itself acknowledged that its third-party background check
process, ``may fail to conduct such background checks
adequately, or disclose information that could be relevant to a
determination of eligibility.''
It is time for action, and that action starts by requiring
fingerprint background checks for anyone driving on a federally
funded contract.
Thank you for the opportunity today, and I am happy to
answer any questions the committee may have. Thank you.
[Mr. Miller's prepared statement follows:]
Prepared Statement of Paul A. Miller, Legislative Counsel, The
Transportation Alliance
Chair Norton, Ranking Member Davis, and members of the Committee,
my name is Paul Miller and I serve as Legislative Counsel to The
Transportation Alliance, which represents the interests of members in
250 cities on four continents, including taxicab, limousine, sedan,
TNC, shuttle, brokers, paratransit and nonemergency medical fleets. The
Transportation Alliance is the largest trade organization in the
industry, with members operating over 100,000 vehicles and serving 900
million passengers per year.
Let me begin by saying our President, Terry O'Toole, very much
wanted to have the opportunity to present his views in person to the
Committee, but our trade association's 101st annual convention starts
today. He has asked me to fill in for him, and to pass along his
apologies for not being here to testify, and his thanks to you for
bringing the concerns I am about to raise into a clarifying light.
Our industry has changed dramatically since the 2010 entrance of
Transportation Network Companies (TNCs). The Transportation Alliance
has never opposed competition. What we have opposed has been the
special treatment afforded to these new companies.
In the early days of TNCs, the debate centered on whether TNCs were
taxi companies or technology companies. From the beginning, our
industry has had major concerns about the safety of TNC passengers due
to a growing number of news reports highlighting assaults against
passengers.
Since 2010, The Transportation Alliance has put passenger safety on
its priority list due to the growing trend of incidents against
passengers by TNC drivers. We started by launching ``Who's Driving
You?'', a public safety campaign. This campaign tabulated news articles
alleging 395 sexual assaults, 102 physical assaults and 22 kidnappings
perpetrated by Uber and Lyft drivers from July 2013 to August 2018.
Because these incidents were discovered among news stories, rather than
by scouring police reports, we firmly believe the actual number of
victims to be substantially higher since, as we know, sexual assault
cases are always tragically underreported.
There is a growing chorus among lawmakers questioning the safety
standards of these companies. Just last week, Sen. Richard Blumenthal
held a press conference to call for Uber and Lyft to institute
fingerprint-based background checks on their drivers. His call for
immediate action came on the heels of sexual assault crimes committed
by Uber and Lyft drivers in Connecticut this year. In one case, a
convicted felon was allowed to slip through Uber's background check was
charged with sexually assaulting a young woman riding with him. That
same month, a former Uber driver, later hired by Lyft, was charged with
sexually assaulting an intoxicated female passenger.
As a backdrop to tragic cases such as these, the process of
becoming a public company has brought additional light the real
problems with Uber and Lyft's background checks, and the inferiority of
their background-check process.
In its form S-1 Registration Statement submitted to the United
States Securities and Exchange Commission prior to its May, 2019
initial public offering, Uber acknowledged: `` . . . there have been
allegations, including from regulators, legislators, prosecutors,
taxicab owners, and consumers, that our background check process is
insufficient or inadequate.''
Most notably, Uber finally publicly admitted something the
corporation had denied for years: ``Although we administer certain
qualification processes for users of the platform, including background
checks on Drivers through third-party service providers, these
qualification processes and background checks may not expose all
potentially relevant information and are limited in certain
jurisdictions according to national and local laws, and our third-party
service providers may fail to conduct such background checks adequately
or disclose information that could be relevant to a determination of
eligibility.''
Uber and Lyft use the same background check company.
I applaud this Committee and its leadership for holding this
important hearing today. We've all seen the stories in the media about
the continued rise in assaults on passengers. These stories are tragic,
yet in most cases avoidable.
On behalf of our professional transportation operators around the
country, The Transportation Alliance continues to be concerned about
the increased number of incidents against TNC passengers.
A few years ago, Uber and Lyft spent more than $10 million to
oppose fingerprint-based background checks in Austin, Texas. As we
gather here today, Uber and Lyft are lobbying for less stringent
statewide background checks in Oregon, despite the fact that the
Eugene, Oregon police department just recently identified a convicted
murderer, and a registered sex offender, driving for the ride-hailing
companies. Neither of these people should ever have been able to pick
up an unsuspecting passenger.
I'm here today to call on Congress to take immediate action to
protect passengers. Every incident against a passenger impacts all of
us, even if it's not our own company. When the public feels unsafe, it
means they are less likely to use our services and will turn to other
modes of transportation. Today, passengers have more transportation
services than ever to get around--from the bus to the scooters flooding
our streets. In the past, consumers had limited mobility options.
Today, if you are unhappy with one mode, you can easily move to
another.
Today we are seeing a rise in the number of harmful incidents
involving TNC passengers. Part of the problem with this is that these
incidents are hard to track. When a taxi driver is involved in a car
accident or passenger assault, not only are the local police on-site,
the local taxi commission is monitoring passenger safety too.
With TNCs, these same safeguards are not in place. If a TNC
incident occurs, the police are likely to be involved, but the incident
is not necessarily documented as TNC-related. If it weren't for the
press, we might never learn about these tragic stories. The fact is: We
are all here today because of The Washington Post article documenting
the increasing number of incidents of passengers harmed by TNC drivers,
and because of Uber's and Lyft's callous regard for safety. These
companies have made a cold, calculated decision that profit and
propping up their valuations is more important than irrevocable harm
committed against vulnerable passengers.
In short, Uber and Lyft regulate passenger safety themselves, and
they do so while prioritizing profit as the recent The Washington Post
article points out.
I'm here today because we need your help. For the past three years,
The Transportation Alliance has been actively working to bring
awareness to the issue of passenger safety and the need for action. Our
industry wants action, but we want Congress to be deliberate about any
actions it takes. Today our industry isn't regulated at the federal
level, nor do we want to be. We believe our issues are better resolved
at the state and local levels. Issues in the District of Columbia may
be different than those in Illinois and we do not want a one-size-fits-
all solution that isn't effective.
However, dangerous times call for immediate action. Where we do see
Congress having an immediate role is with federal contracts awarded to
for-hire transportation companies. The General Services Administration
(GSA) is in the process of putting together a Request for Proposal
(RFP), which is looking to outsource some of the Federal government's
transportation needs to TNCs.
We believe fervently that any company awarded a federal
transportation contract must have its drivers undergo a fingerprint-
based background checks.
Congress needs to become involved in this immediately. No industry
can weed out all bad actors, but Congress can put in place commonsense
safeguards that go the extra mile to ensure we are doing everything we
can to protect passengers who put their lives in our hands. That
includes protecting federal workers, from Senators and Representatives
to interns working in their first job in government. If you travel on
federal business, someone has to be looking out for you, and making
sure that you will arrive safely at your destination.
I know TNCs will argue fingerprint background checks are costly.
TNCs will argue fingerprint background checks discriminate against some
Americans. These are simply myths to avoid taking steps to ensure
passengers are protected.
In most major cities in the United States, taxicab drivers are
required to pass fingerprint-based criminal background checks conducted
by state or local authorities. When a Live Scan fingerprint check is
used, it can cost an applicant between $60-$90 dollars. The scan
crosschecks the applicant through official Department of Justice and
FBI databases.
The real reason TNCs oppose fingerprint background checks is
because their business model depends on flooding the streets with as
many drivers as possible, so that they can put their competition (taxis
and limousines) out of business. This rush to put anyone behind the
wheel, regardless of their criminal history, is the reason why we are
seeing the increase in incidents against TNC passengers today.
In contrast to traditional for-hire vehicle companies, Uber and
Lyft use private company background checks on applicant names and
social security numbers. Time and time again, felons have been proven
to be behind the wheel of Uber and Lyft vehicles owing to these
inferior checks.
How inferior are the background checks performed by Uber and Lyft?
A recent peer-reviewed study by a team of law enforcement experts,
``One Standard for All,'' found that name-based background checks are
43 times more likely to have errors than fingerprint-based checks
(executive summary included in footnote below).\1\
---------------------------------------------------------------------------
\1\ http://www.utrc2.org/sites/default/files/pubs/
Background%20Check%20Report.pdf
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Conducting thorough criminal background checks on drivers who
transport passengers is crucial to keeping passengers safe. Passengers
are frequently alone with these drivers in their vehicle, and being
exhausted, inebriated or traveling in a strange city renders them even
more vulnerable.
Fingerprint-based checks are used to definitively identify
applicants are who they claim to be. Instead, Uber's entire application
process, including background checks, is conducted online. Drivers do
not appear in person and are not fingerprinted. Intentionally or not,
this anonymity positions Uber as attractive to predators.
Even Hirease (now Accurate Background), the company Uber uses to
run name-based checks on its drivers, acknowledged fingerprint-based
criminal background checks are more secure because ``fingerprinting
helps uncover criminal history not discovered through traditional
methods, offers extra protection to aid in meeting industry guidelines,
and helps prevent fraud.'' \2\
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\2\ http://www.hirease.com/fingerprinting/
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This is why The Transportation Alliance supports fingerprint-based
criminal background checks conducted on all drivers of for-hire
vehicles: taxicabs, limousines, Uber and Lyft.
Nationally, a number of organizations and Members of Congress have
called for fingerprint-based criminal background checks. These
organizations include the Boston Chapter of the National Organization
for Women, the National Coalition Against Domestic Violence, and the
National Women's Coalition Against Violence & Exploitation.
We are not asking Congress to do something that's unproven or
something that will disrupt the industry. We are asking Congress to
move judiciously by requiring that any contractor providing for-hire
transportation services paid for in full or in part by the Federal
government first be required to pass a fingerprint background check.
This is a responsible first step toward ensuring all federal government
employees are safe on official government business travel. We are
confident this requirement will save lives.
What we're proposing is a small and easily achievable step toward
ensuring passengers in the service of the American government can trust
that the vehicles they are getting into are safe. This simple step
would provide the peace of mind that family members, mothers, fathers,
grandparents, siblings, and friends need to believe their loved will
arrive home safe every time.
The numbers of TNC victims are astounding. According to a story
done by CNN in April of 2018, the news outlet was able to verify that
103 Uber drivers had been accused of assault or abuse. Again, we
believe the real numbers are much, much higher. This is an epidemic.
Something needs to be done.
As the father of a daughter, these stories make me cringe. Take,
for example, the woman in San Diego who was riding home in an Uber
because she was intoxicated who woke to encounter her Uber driver
assaulting her. When police searched the driver's home, they found
videos of him abusing numerous other young teenage women. As a father,
I cannot imagine what this young woman and her family went through.
Ask the numerous women in Boston who have been sexually assaulted
by drivers, in horrific incidents covered by the Boston Globe. As one
survivor said after realizing she had been charged for the Lyft ride
given by her violent attacker, ``They got paid for me being sexually
assaulted. Lyft is profiting from this.''
Or, in a tragedy that affected even the halls of this great
institution, ask the parents of Samantha Josephson, the young college
student from New Jersey, who was out with friends one night and decided
to go home early. Samantha got into what she believed was her Uber ride
only to realize too late the car she entered was a fake Uber.
Unfortunately, this is a common occurrence because there are no
significant marking requirements for these vehicles. Samantha got into
the wrong vehicle and never made it home. Passengers entering the wrong
TNC vehicle is a very real and common occurrence. Just ask some of your
colleagues who may themselves (or their children) have had this
experience.
Then there is the story of Anthony Horn who was sentenced to 30
years in prison for evading police. Horn was on parole for murder, yet
he was allowed to drive for Uber. Or, as mentioned previously, the
Oregon drivers for Uber and Lyft--one a convicted murderer and one a
convicted sex offender.
The safety issues don't stop here. In 2016, Kyler Schmit, an Uber
driver, tweeted: ``I can't wait to shoot you in the face one by one.''
This tweet was sent to your colleague Senator Roy Blunt. What if he, or
one of his colleagues, had inadvertently been assigned that driver?
I mention these stories because incidents like this can be avoided.
No system is 100 percent foolproof. But ride-hailing companies,
specifically Uber and Lyft, are not adhering to the most rigorous--but
also most basic--safety standards. This cannot continue.
Thank you for the opportunity to testify before the Committee today
and The Transportation Alliance looks forward to working with you on
commonsense safety solutions that are good for the industry, our
passengers, and your family and friends using our services.
appendix
``One Standard for All: Criminal Background Checks for Taxicab, For-
Hire, and Transportation Network Company (TNC) Drivers''
Authors
Professor Matthew W. Daus, Esq.
The City College of New York, City University of New York (CUNY)
Professor Pasqualino ``Pat'' Russo, Esq.
John Jay College of Criminal Justice, City University of New York
(CUNY)
Peer Review Panel Members
Hon. Michael A. L. Balboni
former New York State Deputy Secretary for Public Safety
Professor William J. DiVello
John Jay College of Criminal Justice, CUNY
Professor Lawrence Kobilinsky
John Jay College of Criminal Justice, CUNY
Professor Philip Zisman, Esq.
Association of Inspectors General
[The executive summary of this report, referenced in footnote 1 and
included as an appendix to Mr. Miller's testimony, is retained in
committee files and is available online, together with the report in
its entirety, at http://www.utrc2.org/sites/default/files/pubs/
Background%20Check%20Report.pdf.]
Ms. Norton. Thank you for your testimony, Mr. Miller.
And finally, Larry Willis, who is president of the
Transportation Trades Department of the AFL-CIO.
Mr. Willis. Good morning. On behalf of the Transportation
Trades Department, AFL-CIO, and our 33 affiliated unions, I
want to thank you, Chair Norton, Ranking Member Davis, Chairman
DeFazio, and members of this subcommittee for inviting me to
participate in today's discussion.
First, I would like to submit a copy of TTD's report
released this morning, which urges lawmakers to hold this
industry, the ride-hailing industry, accountable. My testimony
today will be a summary of that report.
Over the past 10 years companies like Uber, Lyft, and Via
have unquestionably grown in popularity, and have radically
transformed expectations for mobility and employment. As the
title of this hearing suggests, they have also presented us
with some new opportunities, but enormous challenges, as well.
As the future of this industry is debated, we cannot ignore
the facts. The very feature that drives the explosive growth
and popularity of the ride-hailing industry--relatively
affordable and convenient service--is based on a business model
that exploits workers and undermines the goals of public
transportation.
Meanwhile, this has been a losing equation for the industry
itself. Uber's and Lyft's public filings reveal that they are
bleeding cash and are now desperate to find a path to
profitability in other markets, including seeking financial
partnerships with public transportation agencies.
While we welcome opportunities to work with any partners
who are advocating for innovation in public transportation, we
expect those partners to subscribe to the promise of public
transit. It must be equitable and accessible to all,
affordable, safe, and reliable.
Most importantly, any new technology or innovation in the
transportation sector must not, as a key feature of its
service, depend on denying workers their fundamental rights to
fair wages and benefits that collective bargaining can provide.
The ride-hailing industry so far has not--has not--lived up to
these expectations.
First, while this industry has always seen competition with
public transit as a growth strategy, it is clear that they now
have a more harmful agenda. They plan to go directly after
Federal public transportation funding to pad their losses and
help prop up their unsustainable business model. Of course, we
cannot stop Wall Street investors from pouring billions into
these money-losing businesses. But lawmakers, lawmakers in this
room, can ensure that these same companies are not permitted to
prey on public transportation and fleece the taxpayer.
Second, companies like Uber, Lyft and Via believe that
their only chance to make a profit requires the suppression of
worker rights and wages. As such, they try to attract drivers
with the promise of high earnings, but slash take-home pay once
a strong market foothold is established. Many drivers, as has
been noted, make less than the minimum wage in the city that
they are operating in, with some making as little as $3.75 an
hour after expenses. By way of contrast, due to high union
density and smart labor policies linked to Federal transit
funding, the average hourly wage for a busdriver is nearly $20,
and as high as $40 in some cities.
Third, while the Federal Government has invested billions
into improving outcomes for congestion and air quality, the
ride-hailing industry has added nearly 6 billion miles of
driving annually in nine of our largest cities. Even worse,
between 20 and 50 percent of their driving time is without
passengers in their vehicles.
Fourth, unlike public transportation, ride-hailing
platforms are not and never were intended to serve all users
equally. In Chicago, for example, one-way trips on Lyft and
Uber averaged about $15 more than the same trip on transit.
Finally, we have serious concerns about the safety for
drivers and passengers on these platforms. Stories like Sami's
shared this morning with us by Congressman Smith and
Congressman Suozzi and others are, unfortunately, all too
common. And other shocking reports about sexual assaults,
inadequate background checks, and cover-ups of wrongdoing
should give policymakers pause here.
Look, our goal is not to put this industry out of business,
it is not to stop innovation. On the contrary, we believe that
this technology can provide real benefits for Americans. We
just believe that there must be accountability to the
employees, to riders, and to the aims and goals of our national
transportation system, accountability that so far just isn't
there.
With that said, I thank you and look forward to your
questions.
[Mr. Willis' prepared statement follows:]
Prepared Statement of Larry I. Willis, President, Transportation Trades
Department, AFL-CIO
On behalf of the Transportation Trades Department, AFL-CIO (TTD),
and our 33 affiliated unions, I want to thank Chair Norton and Ranking
Member Davis for inviting me to participate in today's hearing.
First, I ask that the Committee allow me to submit a report
published by TTD this morning entitled The Costs of Doing Business: Why
Lawmakers Must Hold the Ride-Hailing Industry Accountable as they
Undermine their Workers and Play by their Own Rules, to the record. My
testimony today will be a summary of the findings in that report.
Over the past ten years, ride-hailing companies like Uber, Lyft,
and Via have unquestionably created significant demand for their
services, and in doing so, have radically transformed models and
expectations for mobility and employment in this sector. As the title
of this hearing suggests, they have also presented us with enormous
challenges and opportunities at a pace that is unmatched by any
innovation in surface transportation in recent memory.
The key feature that drives the explosive growth and popularity of
companies like Uber, Lyft, and Via--relatively affordable and
convenient service--is, however, based on a business model that too
often exploits the drivers who provide this service, and intentionally
undermines the goals of public transportation.
Meanwhile, this has been a losing equation for the industry. While
Uber and Lyft's public filings reveal that they are bleeding cash to
uphold this charade, they are desperately scrambling to find a path to
profitability in other markets, like food delivery, on-demand bicycles
and scooters, and--most important to today's hearing--partnerships with
public transportation providers.
In some regards, these ventures into new markets have been positive
steps. For instance, bike-sharing services provide mobility options and
boost transit ridership, and workers who are classified correctly as
employees in that industry have successfully exercised their right to
form and join unions across the country. We also recognize the
opportunity that on-demand transportation services like microtransit
and first-mile/last-mile connections offer. If structured correctly, we
believe they can be an exciting new way to drive growth on existing
bus, subway, and rail systems.
To that effect, we welcome the opportunity to work with any
partners who are advocating for more and better public transportation
services. However, we expect partners in innovation to subscribe to the
promise of public transportation established by more than 50 years of
federal precedent. That is, it must be equitable and accessible to all,
affordable, safe, and reliable.
Most importantly, any new technology or innovation in the
transportation sector that is worth investing public dollars in, must
not as a key feature of its service, depend on denying the workforce of
their fundamental rights to fair wages and benefits that collective
bargaining can provide.
Unfortunately, so far, the ride-hailing industry has not lived up
to these expectations.
Ride-hailing is a business model that is built on undermining our
national transportation goals
We have long known that the ride-hailing industry sees competition
with public transportation for ridership as a growth strategy. In their
IPO filing, for example, Uber identified public transportation as a $1
trillion market and they were not shy about their intentions to compete
in that space. TTD has obvious concerns about companies that are
spending billions to ensure they can play by their own set of rules
seeking to undercut public transportation. While a handful of investors
may win in this game, they do so purely at the expense of those who
rely on it the most.
Even worse, we have seen the recent growth of a more duplicitous
business strategy. It is evident that these companies no longer see
competition with public transportation as enough to drive profit.
Instead, they plan to go directly after federal public transportation
funding to pad their losses and help prop up their currently
unsustainable business models. In other words, if they cannot turn a
profit for their shareholders, they will just ask the American taxpayer
to do it for them.
Unfortunately, the first part of their plan is already paying off
for them. The effect of Uber and Lyft on transit agencies is so
substantial that they may see a nearly 14 percent decline in bus
ridership and 10 percent decline in rail ridership over the next 8
years.
We cannot stop Wall Street investors from pouring billions into
these corporate entities, but lawmakers in this room can ensure these
same entities are not permitted to prey on public transportation and
fleece the taxpayer.
The Ride-hailing industry sees fair wages and collective bargaining as
an impediment to growth
It is clear why companies like Uber, Lyft, and Via object to giving
their drivers the right to organize. If they ever hope to eke out a
profit, they believe their only chance to do so is by suppressing their
workers' rights and driving wages to rock bottom. We see it time and
again with these companies. They lure drivers with the promise of high
earnings, but slash them to the bone once they establish a strong
foothold in the market. Many drivers make less than the minimum wage of
the city they are operating in, and worse still, there have been
reports of workers making as little as $3.75 an hour after expenses.
By way of contrast, federal policy has long ensured that the use of
federal funding for public transportation comes attached with strong
labor protections. It is because of those policies that the average
hourly wage for a bus driver is nearly $20 and as high as $40 in some
cities. In addition to paying living wages, union jobs in the public
transportation sector come with good benefits, including overtime, sick
leave, flexible scheduling, health insurance, and pension plans.
To be sure, there have been victories for workers in the ride-
hailing industry. The Dynamex California Supreme Court case and the
passage of AB 5 in the California Legislature, for example, will
require that nearly all platform workers must be classified as
employees. While AB 5 is only a first step in giving drivers the right
to collectively bargain, Uber, Lyft, and others have seen it as such an
existential threat that they plan to invest $60 million into a ballot
measure to overturn the law.
Uber and Lyft's aggressive strategy to prevent their employees from
having the rights they deserve is an unsustainable model for riders and
a punitive model for workers that both lawmakers and transit agencies
must see for what it is.
Ride-hailing undermines the work this nation has done to relieve
congestion on our roads
Despite claims by the ride-hailing industry that they intend to
complement existing public transportation, it is clear they mean to
undercut these services. By shifting riders from high-occupancy
vehicles like buses and railcars to small vans or personal vehicles,
companies like Uber, Lyft, and Via will do nothing to alleviate one of
the greatest problems public transportation intended to solve: reducing
congestion.
Consider the following:
Ride-hailing platforms have already added 5.7 billion
miles of driving annually in just nine of the largest cities in
America, a number that we expect to grow significantly each year.
While pooled rides on these platforms may seem like a
compelling means of decreasing their overall contribution to additional
vehicle miles traveled, studies have shown that low utilization of
these services simply does not offset their traffic increasing effects.
Studies have already shown that riders using ride-hailing
services are primarily substituting ride-hailing in place of public
transit, biking, and walking rather than replacing trips they would
have taken in their personal vehicles.
A significant portion of Uber and Lyft's miles are
``deadhead'' trips--that is, miles traveled without any passengers in
the car. In some cities, deadhead miles account for between 20 and 50
percent of all trips.
This should give lawmakers significant pause. While the federal
government has invested billions into reducing congestion and improving
clean-air outcomes, these companies are constantly undermining these
improvements without improving the efficiency of our transportation
network.
Ride-hailing's high cost to consumers places them squarely out of the
hands of those who need transit the most
Unlike public transportation, ride-hailing platforms are not, and
were never, intended to serve all road users equally. The fact is, the
majority of ride-hailing platform users come from wealthy households
and the average ride cost puts their services squarely out of the hands
of lower-income customers.
Consider, for example, that the average Chicago Transit Authority
fare is $2.69, while Lyft and UberX average $18.13 and $17.90
respectively, and Lyft Line and UberPool average $14.04 and $9.33,
respectively. This means that single-occupancy rides on both platforms
average $15-$16 more than transit services, and shared-ride services
average $6-$11 more. To make trips using ride-hailing services
affordable, transit agencies would have to significantly subsidize
these platforms with public money.
Let's be clear, though. This would be nothing more than a subsidy
for a handful of for-profit companies at taxpayers' expense, with
unproven benefits to transit-dependent Americans.
The ride-hailing industry side-steps safety
TTD also has serious concerns about ride-hailing companies' history
of sidestepping safety, which has already put passengers, drivers, and
road users at serious risk.
First, while Uber and Lyft finally limited the consecutive hours
their drivers can operate on their platforms in one day, these drivers
frequently work across multiple platforms. Many rely on more than one
on-demand platform as their primary source of income, and work
backbreaking hours just to make minimum wage. The results are driver
fatigue and health complications, both serious threats to road-user
safety. Even with limits to hours of service, companies like Uber and
Lyft squeeze their employees to work longer hours if they want to
receive the bonuses and incentives that help them earn something close
to a living wage.
Shocking reports about sexual assaults, inadequate background
checks, and ride-hailing companies covering up wrongdoing should also
give policymakers pause when considering whether to reward these
companies with federal funding. A recent investigation, for example,
found that Uber coaches investigators to put the company's interest
ahead of passenger safety. In one instance, a driver was accused of
making sexual advances on riders three times before an investigator was
assigned to their case.
Finally, while transit operators are subject to drug and alcohol
testing and a number of medical qualification standards, no such
requirements exist for drivers on ride-hailing platforms. Countless
stories have revealed incidents involving drivers reported or arrested
for driving under the influence.
Conclusion
Ride-hailing has undoubtedly become popular with American
commuters; but a business model based on creating an unfair competitive
advantage in the marketplace of mobility cannot be condoned or ignored.
To date, this industry has demonstrated no interest in furthering the
goals of public transportation, even as it seeks to make inroads into
this sector and undermines the jobs and rights of its own drivers.
Innovation is not a license to exploit workers and play by your own
rules in the transportation space. Public transportation agencies and
lawmakers must consider the exploitative and dangerous behavior of the
ride-hailing industry and its unsustainable business model when
weighing how and when to engage and support this industry.
Ms. Norton. Thank you very much, Mr. Willis.
We are not here to malign Uber and Lyft. There is probably
not a member of this committee that hasn't, on occasion, taken
an Uber or Lyft ride. But we have obligations of our own to the
public.
Mr. Miller, you noted something that this committee can get
a hold of right away, when you say that the General Services
Administration is, as we speak, in the process of a request for
proposals looking to outsource some of the Federal Government's
transportation needs to TNCs. Would you elaborate on that?
Mr. Miller. Yes, the General Services Administration has
put out some requests for information. And in putting together
a request for proposal that would allow Government workers who
travel to different cities or even within the city here,
instead of using a taxi or a bike or service like that, they
would have contracts with TNCs that would take them to and from
the locations that they need to go.
Ms. Norton. Well, you see the handle that gives the Federal
Government right there to begin with. And, this committee will
be very interested.
Mr. Miller. Well, Congresswoman, Chairwoman, that piece
concerns us greatly because, again, I am not here to say we are
anti-Uber or anti-Lyft, because we are not. This new
opportunity with the Federal Government could be business for
all of our companies.
But when you have an--when the incidents that we are seeing
today continue to rise, and escalation of violence against
passengers--just the news media today--we are here, in part,
because we had two Congressmen come and talk about Sami and the
horrible tragedy that happened to her. What happens if that
happens to a Government employee? That is going to be on the
front page of every newspaper, every news outlet for weeks and
weeks and weeks, and those business opportunities are going to
go away for all of us. So----
Ms. Norton. Well, it is the obligation of this committee to
see that it doesn't happen to Government employees, and that it
doesn't happen to the public any longer.
I don't understand the difficulty in getting statistics.
And this is another role Congress can play. What about law
enforcement agencies? Is there no--is that a role for the
Federal Government? Why is it that we do not even have good
information to begin with?
Mr. Miller. I can answer that a little bit.
Ms. Norton. Mr. Miller?
Mr. Miller. If you are in a taxicab accident, or there is
an incident, you have law enforcement that will show up, and
you will have the taxi commission, somebody representing the
taxi commission there to take statements and file those types
of reports.
What we have today with TNCs, you don't have those types of
police. Law enforcement may show up, but it is not going to be
ticketed or written up as a TNC type of violation or accident,
because they are just regular people owning vehicles. So there
is no way to distinguish what they are and who they are.
Ms. Norton. Yes, which means that the committee has to work
with law enforcement to find ways to make sure we get this
information.
Mr. Willis, I was interested to read that drivers on the
west coast were seeking to organize. It seems to me that that
was a hopeful move. Could you tell us more about that, please?
Mr. Willis. Well, I think what you are seeing across the
board is Uber and Lyft drivers wanting some type of union
representation, a union voice, because of the terrible wages
and benefits that we see in the industry.
Ms. Norton. I mean you report as little as $3.75 an hour.
Mr. Willis. Yes. I mean, that is--you know, that really
goes to the problem, and it goes to the issue of the
independent contractor status that you raised.
In California specifically, the legislature has passed a
new law that we believe will ensure that these workers are
treated as employees, and that is a good path forward. There is
going to be more work that needs to be done, as the Governor
has mentioned. But I think making sure that those workers at
least are given the protections of employees and collective
bargaining rights is absolutely essential.
And I think, you know, the fact that Uber and Lyft--the law
is not even dry yet, the ink on the paper, and they are
committing to spend $60, $70 million to overturn that. So I
think you see the real problem here with the way that these
companies think about their drivers.
Ms. Norton. Yes, they are terrified at organization, more
terrified at organization than they are, I think, of the
Congress itself.
Finally, I would like to ask Mayor Freeman-Wilson about her
testimony about affordability.
You want to spread these? In their present state you want
to spread these to low-income communities, to the disabled? Why
aren't they going into those communities in the first place?
Ms. Freeman-Wilson. Thank you for that question, Chair
Norton. I think that, in many instances, you find that there is
not the opportunity to use TNCs in the----
Ms. Norton. Well, do those communities call for TNCs? Do
they dial and say, ``I need an Uber or Lyft,'' or is it that
Uber and Lyft refuses to go to those communities?
Ms. Freeman-Wilson. No, I don't think there is a refusal to
go into our communities. I think it is the availability of
people who may or may not be working for TNCs. In many
instances they require insurance, they require certain types of
vehicles. And when you have communities with higher poverty
levels, you just don't find those willing and able drivers that
you may find in some of the larger----
Ms. Norton. Well, I don't know why drivers from more
affluent communities can't go into those communities, as well.
I mean, if you get a call, can't you just go to the community
where the call has come from?
Ms. Freeman-Wilson. Well, a lot of times you find that they
may be 15 minutes away. And generally, when someone is looking
for an Uber or Lyft they are looking for that ride in 3 to 5
minutes.
Ms. Norton. That is certainly the case----
Mr. Miller. Can I add something to that, Chair?
Ms. Norton. Yes, please.
Mr. Miller. When it comes to this type of ride that you are
talking about, some of the challenge becomes that these--the
TNCs don't have the appropriate vehicles. They don't have
wheelchair-accessible vehicles to pick these folks up.
Ms. Norton. I understand.
Mr. Miller. So that does become a challenge. In a lot of
communities taxi companies are required to have a certain
percentage of their fleet wheelchair-accessible vehicles. So on
the other side of the equation, TNCs don't have that same
requirement.
Ms. Norton. Yes, well, thank you for pointing that out.
And I am going to go to the ranking member now for his
questions. Indeed, you point out the difference between how
taxis are regulated, and how these TNCs are virtually
unregulated.
Mr. Davis?
Mr. Davis. Thank you, Madam Chair. And thank you all for
your testimony. Great to see some folks again.
Mr. Willis, always great to work with you. I appreciate
your comments.
Mayor Freeman-Wilson, I don't have a question for you, but
I haven't spoken to my old college classmate, Darren
Washington, in a while. And we both graduated from Millikin
University in Decatur, Illinois. I know he is active in Gary,
Indiana. So if you see him, give him my best.
Ms. Freeman-Wilson. Yes.
Mr. Davis. Thank you. And thank you for your testimony.
Mr. Martz, I do want to focus my questions on you real
quick. I am very intrigued by what your company is trying to do
to kind of provide a--really, filling the gap between some of
the ride-hailing companies and services that may be offered in
urban areas that may not be offered as much in districts like
mine.
You know, if you could talk a little bit more--I know you
gave us your testimony. Just talk a little bit more about how
your commute program works.
Mr. Martz. OK.
Mr. Davis. And the successes, too.
Mr. Martz. Yes, yes. I will give you a couple of good
examples in rural areas.
What we face lots of times is a need for reverse commuting
to work sites that you might not necessarily put in your
backyard. It might be a prison. It might be a meat processing
plant. And that is one of the examples that I put in the
testimony.
In Nebraska, roughly an hour south of Omaha, is Nebraska
City, a small town of 7,000 residents. Cargill has a protein
plant, they call it, there. And with the flooding of the
Missouri River that occurred in this last year, they had
problems getting people to work. They called the Nebraska DOT,
who we have a public-private partnership with, and we quickly
sent our folks down there, explained our program, how we would
work with the employees to get them to and from work.
We did some analysis of their home locations and so forth,
and we knew what their work schedules were going to be. And
essentially, over the course of the next 3 months, we put 30
commuter vanpools in service from different areas around Omaha
to an hour south of there to Nebraska City, transporting
probably around 200, 220 people to and from work during a time
of crisis. And the company completely embraced it.
The program itself, because we provide the capital for the
program and the Nebraska DOT only provides, like, a $400
subsidy per month--I mean, getting into details here, but the
DOT gets great leverage, essentially. We provide the capital
asset on a 30-day, pay-as-you-go basis. We only bill them for
service that meets the standard. Essentially, it is pay for
performance. And in the process, they don't have to have their
capital increased to buy assets, and things like that. They
only pay for the subsidy. So they get two-to-one leverage on
their dollars.
Mr. Davis. Right. So I----
Mr. Martz. So that is an interesting rural scenario.
Another one is in Florida, where we have this program to--
--
Mr. Davis. Well, I don't have too much time left.
Mr. Martz. OK.
Mr. Davis. I got to get to--I do have a couple of other
questions. I appreciate that example. But I do notice you don't
have your commute program operating in the St. Louis area or
right across the river in my district. Are you planning some
expansion in those areas?
Mr. Martz. We would like to. We have made several pitches
to the folks in St. Louis, the transit agencies. And one of the
problems that we have is the designated recipients get,
essentially, all of the transit dollars. And it is up to them
to have a desire to share those dollars, and they are not
willing to do so.
Now, we have a very limited amount of service in St. Louis
that is not in any way subsidized, but it is very limited.
Could we provide hundreds and hundreds of vanpools in the St.
Louis market if we had the ability to lower our rates just to
even one-third? Absolutely. This is what happened in Los
Angeles, or even in El Paso, or Dallas, or Houston. This is
where our rates are just lowered 30 to 40 percent. And instead
of 200 vans, we will have 800 vans in service. So just a little
bit of assistance makes a huge deal.
But it is--St. Louis is a great example. Right here in DC
is another one, which WMATA has never agreed to want to share
those dollars. Every mile, essentially, that we would operate
would contribute 50 cents towards the formula program. So there
are transit agencies that we operate with. But even in those
agencies, they don't share a significant amount to grow the
program even more.
Mr. Davis. Right. Thank you, Mr. Martz.
Mr. Willis, you know, some of the TNCs have introduced some
safety measures already. You know, ability to text 911 through
the rideshare app, and reminding them to check the license
plate number before entering a vehicle. Can you tell us, in
your opinion, how can the taxi and limo industry keep up with
technological advances like that too?
Or any of you guys. Mr. Miller?
Mr. Miller. I can answer that. We do it today. I mean the
myth is that only Uber and Lyft are using technology. I mean
every company that is respectably having a legitimate business
out there in the for-hire transportation industry are using
apps today. We are not global like Uber and Lyft, but our
members have apps very similar to the same platforms that Uber
and Lyft have for their very own company. So they do have that.
And what you will see in some of the taxis right now, you
will have the public displays in the back, and it will give you
a button. If you are feeling threatened, or--somehow you can
push a button and emergency will be called for privately. It is
a private button, or a panic button type of thing.
Mr. Davis. All right. Thank you. I yield back.
Ms. Norton. Thank you very much, Mr. Davis.
Mr. DeFazio?
Mr. DeFazio. Thanks, Madam Chair.
Mr. Miller, this weird thing about fingerprint background
checks would be discriminatory, I mean, I know they would be
discriminatory against, you know, murderers and convicted
rapists. But what, other than that, is the basis for this
discrimination?
Mr. Miller. There is feeling from some that if you have any
kind of criminal background, that you won't be able to drive
safe. You are 18 years old and you had a minor drug offense----
Mr. DeFazio. Well, no. I just looked at the Uber
conditions. They say even certain felony offenses will be
permitted. They don't even mention misdemeanors. And they list
certain driving offenses.
So why wouldn't they really want to know about that stuff,
as opposed to conducting a fake, insufficient background check
just by name basis?
Mr. Miller. I cannot answer that for them. But I can just
tell you that the thing about discrimination is really more of
a myth.
Mr. DeFazio. Right.
Mr. Miller. Just by having some sort of offense in your
background is not going to necessarily prohibit you from
driving for any----
Mr. DeFazio. Right. I mean they can--they set the
conditions, and they----
Mr. Miller. Right.
Mr. DeFazio. It is--I just--look, because I said, ``How can
I become an Uber driver?'' I just looked at the list of
conditions.
Mr. Miller. Right.
Mr. DeFazio. And they say certain felonies are allowed, and
I am OK with nonviolent ones. So they set those conditions, but
they specifically exclude murderers and sexual predators, who
they approved in Eugene, Oregon, with their background check.
Now, I just--did they really spend $10 million in one city
to oppose fingerprint-based background--that can't be----
Mr. Miller. That is correct.
Mr. DeFazio. It can't be--that has got to be inaccurate.
Mr. Miller. No, that is actually----
Mr. DeFazio. How do we know that number?
Mr. Miller. Because that comes from the folks back in those
communities who are tracking it, both on the labor side and on
the business side.
Mr. DeFazio. $10 million? I just figured out if a
background check costs $60, fingerprint-based, that would be
170,000 or so background checks. How many Uber drivers do they
have down there, 1 billion?
Mr. Miller. A lot.
Mr. DeFazio. So, I mean, this is incredible. I am--you
know, I am so angry that they wouldn't show up today. But thank
you. I learned in the first panel--and I went online--that I
could be a fake Lyft driver tomorrow for $8.99 with Prime
delivery.
Mr. Miller. Yes.
Mr. DeFazio. And I learned from you that GSA is soliciting
these people. Yet we are going to put, you know, public
employees into systems where the workers are being abused, as
has been talked about here, some people earning as little as
less than four bucks an hour after expenses, and where their
safety could be at risk. We can deal with that.
Mr. Miller. Well, what makes this even worse, Mr. Chairman,
is that I gave Mr. Smith an article that comes from Uber
drivers themselves who are taunting and saying that you don't
even need to get a background check. Here is how you cheat the
system by doing that. It is just flaunting it. And again----
Mr. DeFazio. Well, I would love to have that document.
Mr. Miller. I will get that to you.
Mr. DeFazio. I mean we have been through things like this
before, drug testing and alcohol testing for truck drivers with
things called Whizzinators to get around the system. We have
been down this--I would love to have that document.
Mr. Miller. I will get that to you right after this
hearing.
Mr. DeFazio. Mr. Willis?
Mr. Willis. Mr. Chairman, you pointed it out. This
committee has mandated background checks for transportation
workers across the board, including truck drivers that happen
to need a hazmat endorsement have to get a fingerprint
background check that, quite frankly, is pretty extensive. So I
think there is significant precedent here. And you have done
this for, again, other areas in the transportation space.
Mr. DeFazio. And we have certain rules. I can't remember
with truck drivers, but I know with longshore people we have
set the standards on what past offenses and what time lapse.
But we are not saying, gee, if you ever had a felony you can't
do this, but----
Mr. Willis. And there is a waiver process that we fought
very hard for to make sure that, even if you did commit an
offense, you have an ability to demonstrate that you are not a
security--in this case, a safety--risk that may allow you to
still work in that profession. So there are some due process
protections built into that.
Mr. Miller. And the Government also does require drivers
who drop things off at military bases and other secure
facilities to require their drivers to be fingerprint-
background checked, as well. And they do it as a cost of
business.
Mr. DeFazio. And--OK, I think that--I think we have covered
that. Thank you, Madam Chair. I appreciate it.
Ms. Norton. I thank you, Mr. Chairman, for laying out that
almost everybody else who drives the public has to have
fingerprints and a background check except these people. We got
to do something about that.
Mr. Babin?
Dr. Babin. Yes, ma'am. Thank you, Madam Chair. This is a
very, very interesting and very, very good hearing.
I would say thank you very much for you all coming in and
giving your testimony, as well. I also want to thank my
colleagues, Congressmen Smith and Suozzi, who shared their
testimony in the first panel on their rideshare passenger
protection bill, which I plan to cosponsor.
And I, too, am disappointed that we were not able to ask
questions of Uber and Lyft.
But my first question is for the panel here. I represent a
large part of southeast Texas. And while my district includes
the heavily populated Houston area, it is mostly made up of
rural and widely spread-out communities. The majority of my
constituents do not have access to a robust transit system like
others in more densely populated areas have.
I have seen studies that show that access to reliable
transportation can greatly improve the health of senior
citizens and those who receive medical treatments in which it
is not safe for patients to drive themselves to and from, such
as dialysis and chemotherapy. With that, I am very concerned
about Americans who live in districts like mine, who are all
across this country, and who are in dire need of access to
transportation, and the problems that they have.
But very quickly, if each of you can share what your
organizations are doing to ensure that services are available
to people who live or work in sparse transportation and
underserved areas.
And I would start with you, Mayor. If you would, tell me
what some of those are.
Ms. Freeman-Wilson. Thank you, Mr. Babin.
Dr. Babin. Yes, ma'am.
Ms. Freeman-Wilson. NLC represents communities that have as
few as 500 people and as large as New York City. We believe
that one of the ways that Congress can impact this phenomenon
that you describe is through the metropolitan planning
councils.
In our own metropolitan planning council in northwest
Indiana--it is called NIRPC--we are able to work together with
large cities and small towns to ensure that there is equitable
funding, equitable access for citizens, and that there is, in
fact, a regional transit authority. And we believe that the
funding and the encouragement that Congress gives to make sure
that we work together in that manner has an impact. And NLC
certainly supports those networks.
Dr. Babin. Right. Thank you.
Mr. Martz?
Mr. Martz. Interesting. In your particular--we are focused
on work commutes, you more, more so than the other trips. But
there are instances in your district, whether it is--an example
would be someone--groups of commuters going from, let's say,
Woodville to Beaumont, or from, let's say, Livingston to the
airport in Houston, that there just really isn't an entity that
is there to help facilitate funding for those, other than
TxDOT. And they don't necessarily view themselves as
operational.
The Mobil plant just west of Beaumont would be one that
doesn't really fall in Houston metro's jurisdiction, who has a
program. But Beaumont Transit could do this type of program,
but they have chosen not to over the years because we have
approached them on several occasions.
Dr. Babin. Yes. You know your stuff, I can see that, in my
district, as well.
Mr. Martz. All my wife's family is from Beaumont.
Dr. Babin. No kidding. That is my hometown. All right.
Well, thank you very much.
Mr. Miller?
Mr. Miller. Let me echo first--echo the comments made by
the mayor.
But also, it has been a challenge for us. I will say we are
doing better at it, but it still continues to be a challenge,
and partly because you have two sets of rules. You have a new
set of entrants who have really come into the market in 2010
with zero rules and regulations, and then you have another set
of operators who have overabundant rules and regulations.
So just take the insurance, for example. For a taxicab
insurance is about $5,000 per vehicle per year. For an Uber or
Lyft, it is probably a couple hundred dollars. So you are
talking about a huge cost, on the one hand, and zero cost on
the other. So if we could truly, really try to level that
playing field out, I think some of this sorts itself out
through that.
Pricing is another issue. I mean, in some of those
communities you may get surge pricing on the TNC side. On the
taxi side you don't have that. It is a regulated price fee
structure.
Dr. Babin. Absolutely. Thank you, Mr. Miller.
Mr. Willis?
Mr. Willis. You know, look, we see real value in expanding
transportation services here. But I would remind the committee
that the reason that TNCs may be attractive in some settings is
because no one is really paying the full cost of the service.
Right? It is being subsidized by investors. The drivers are
absorbing many of these costs.
And what we should be focused on is finding ways to
encourage creativity and innovation within public transit
agencies. I think that is going to require more money and more
support from this committee. But I think, within the public
transit framework, even in rural areas, is where we can grow
these services.
Dr. Babin. OK, thank you. And I will go ahead and yield
back there, Madam Chair. Thank you.
Ms. Norton. Thank you, Mr. Babin.
Ms. Johnson.
Ms. Johnson of Texas. Thank you very much, Madam Chair, for
holding this hearing, and thanks to all of our witnesses.
I am really disappointed that Uber and Lyft are not here,
because my questions that I had when I came to this hearing
would have been directed.
I am from a very large urban area where we have spent lots
of time planning public transit with our rapid transit system
supplemented by buses. But we also have large pockets of people
where we have at least three sizable rehabilitation programs
for ex-offenders. And in my State, an ex-offender cannot get a
driver's license nor a State ID, which is a real problem. When
they get through the rehabilitation, they got to find jobs, but
they don't have a way to get there.
And so maybe perhaps you have some ideas, other than
supplementing the public transit system with services like Lyft
or Uber. But that is a major problem in many urban areas,
especially in large urban areas, where you have a concentration
of the job opportunities a distance from where many of the
disadvantaged people have to go.
So if you could comment on how we could address that issue
without some type of temporary or supplemental transportation
services, I would appreciate it.
Ms. Freeman-Wilson. Ms. Johnson, I can certainly address
how we have done that in Gary and other communities. We too
share your challenge, in terms of having a large number of
former offenders who are required and who desire, quite
frankly, to work.
One of the partnerships that we have developed with UPS,
actually, in Illinois is we provide vans for them to work, and
they travel about 40 miles from Gary every day. We provide two
shifts of vans, and we have partnered with UPS to ensure that
certain offenses won't prevent people from being able to work
in those jobs.
I think what that demonstrates is that cities are always
focused on trying to ensure that every resident has an
opportunity to realize their greatest dreams, and to support
their families, and do the things that we all want to do.
Mr. Martz. Ms. Johnson?
Ms. Johnson of Texas. Yes?
Mr. Martz. In Dallas and Fort Worth and Denton County we
have three different public-private partnerships. We provide
about 300 commuter vanpools between the two. And the Dallas
program is about 175, I think. It has been financially
constrained a little bit, which is kind of surprising, given
the market that is there. There is room for many more.
But your agencies, I don't think, are necessarily the
problems. There are so many others around the country that
don't really view what we do, for example, which is a lot of
reverse commute type stuff, or suburb-to-suburb commuting, as
something that they really do or want to do. They are very set
in their ways, in ``This is our route system, this has always
been our route system. It is not going to change very much, and
we don't have enough money to operate what we have got, so we
don't even look at things.'' And that--we run into this all the
time.
So we work cooperatively with your folks in the Dallas
market, and--but we think there is still more opportunity there
to do more.
Mr. Miller. And I will just say, from our perspective, it--
because we are independent contractors, it is going to be up to
each individual company or individual driver. And I think some
of that--there needs to be more sophistication, there needs to
be more business savvy looking at these types of opportunities
that they need--they may not know that they exist, and I think
that is the biggest challenge that we have in some of these
areas.
Mr. Willis. I would only add, you know, that one of the
great benefits of public transit, as I mentioned in my opening
statement, is that, you know, by law and by practice, it is
accessible to all, or should be accessible to all. To the
degree that TNCs want to pretend to be public transit providers
and seek Federal subsidies, they need to be held to that same
standard, as well.
So again, I think a lot of the mobility on demand and the
new innovation of transportation services can be done in the
public transit context. But to the degree that you are using
these outside entities, we have to hold them to the same
standards that we require of public transit.
Ms. Norton. Thank you very much, Ms. Johnson.
Mr. LaMalfa?
Mr. LaMalfa. Thank you, Chair Norton, for having this
hearing today on this increasingly important topic. I
appreciate it.
As a Californian, I do note that last month Governor Newsom
did sign a bill called AB-5 into law, which is going to force
most of the rideshare companies in a district like mine to lay
off their drivers, as well as the effects on independent
truckers, and basically a lot of the lifeblood for rural
California and rural living.
Now, some might, on the left flank of--or Democratic
colleagues might cheer this on, because their urban
constituents won't really feel the effect of this law. They
make enough money as full-time employees in urban areas to make
it work. But again, in a district like mine, in rural areas,
mountainous areas, northern California, this law will decrease
the commercial services available to the elderly, disabled,
those with medical visits that cannot drive themselves, and
those that are likely to be picked up for DUIs if they drive
themselves, something I really thought we all agreed was a bad
thing.
According to data provided by Lyft in my own district they
average 24,000 rides per month from around 1,000 drivers. Just
under two-thirds of those rides start in low-income areas that
might not have easy access to other transportation.
Now, transit doesn't have 24-hour models in a lot of areas,
even here. Or there might be a very long hike to get to public
transit.
So when you look at that, just 10 percent of that would be
2,400 rides per month, which happen late at night for those
that might be under the influence. So you can look at the data
however you want. Lyft alone is taking probably 2,400 maybe
drunk drivers or drowsy drivers off the road every month in my
own district.
So the Governor has effectively--and the legislature--has
effectively banned my constituents from making a choice, choice
for these consumers, and choice for the drivers themselves that
want to be--don't want to be employees, rather than be
independent, have their own business. Who is against that?
Evidently people in this room. People on this panel would have
them all rather be corralled into a situation that doesn't suit
them, but the typical norm.
You can call a taxi in many places. Maybe people don't, and
maybe as riders we don't always want that choice.
I noticed that the Uber and Lyft vehicles are a little
cleaner, a little nicer, and a little more available a lot of
times.
So what we see again in my district, 88 percent of the
drivers in NorCal were part-time, driving on the side to earn a
little extra money. There will not be 1,000 new taxi drivers in
Chico and Redding on January 1, when this law kicks in in
California. But on that particular day, January 1, how many
more drunk drivers will there be?
So a question for Mr. Martz and Mayor Freeman-Wilson. This
committee spent a few months talking about this concept of
mobility on demand. We have had committee hearings and a
roundtable. Even Chairman Norton has talked about her interest
in helping with working with me to set up something in the very
rural areas of the U.S., such as what we are talking about with
medical visits and for our veterans.
How can--how can vanpooling--again, Mr. Martz and Ms.
Freeman-Wilson--or some next-day service be adopted to work for
the elderly, disabled, and our veterans who have trouble
attending their medical appointments, getting groceries, or
even traveling to community events? What do you see as being
feasible for those?
Ms. Freeman-Wilson. We believe that there is an opportunity
for cities and localities--cities, towns, and villages, quite
frankly--to work with senior organizations, to work with those
organizations that serve our disabled residents to provide
opportunities for partnership.
I think the thing that mayors and, quite frankly, council
members bring to the table is the ability to convene folks from
localities.
But at the same time, Mr. LaMalfa, we are not looking for a
ban on Uber and Lyft. All we are saying is that, in instances
where there are safety challenges, that there is room for
background checks, for other opportunities to ensure----
Mr. LaMalfa. Yes, my time is short. I appreciate that. And
there are good things they are talking about in the bill with
that. But it sounds like there is a big push to really
eviscerate those services, and that we have had these--some of
these programs in rural counties, and you see that either they
are riding around empty at the wrong times of day, or not
available and not as feasible, sustainable, financially.
So my time has already expired, but I appreciate that. And
I hope we can continue this in that not everything that gets
passed in Sacramento, such as AB-5, which will gig a lot of the
economy, as they call it--the gig--on trucking and personal
services like this, but that we can have more flexibility for
many of our rural needs for areas that just can't afford all
these.
So I appreciate it, Madam Chair, and I will yield back.
Ms. Norton. I appreciate those remarks. We are trying to
make these rides safe, and we are trying to make them more
equitable across the country. And I am concerned. I think what
is happening in rural communities is exactly like the question
I asked the mayor about what is happening in low-income
communities here.
These rides are going to be out there. We--with all of the
safety problems they have, which Congress must take leadership
in correcting, we have also got to make sure that they are more
widely available where they are most needed. So I appreciate
that line of questions.
Mr. Garamendi?
Mr. Garamendi. Thank you, Madam Chair, and thank the
witnesses. This is an extremely important hearing.
We have had a lot of discussion about the safety issues,
and ways in which that can be dealt with, fingerprints and the
like. And certainly we must move forward with that particular
piece. And I suggest it be at the Federal level.
I want to go back to AB-5, the California legislation,
which has been bounced around here several times.
Mr. Willis, why don't we start with you? Can you give us a
rundown on exactly what is in it, and why it was important
enough to become the law in California?
Mr. Willis. Well, thank you for the question. First of all,
I have to respond in part to your colleague. The idea that Uber
and Lyft drivers are somehow their own business is laughable.
These are drivers that, in many cases, are making below minimum
wage in the cities in which they are driving. As I cited in my
testimony, it can go as low as $3.75 after you back out
expenses.
The idea that they should be covered by minimum wage laws,
other worker protection laws that California and other States
affords their employees, we think, is a matter of basic
fairness.
You know, one of the problems when employers misclassify
their workers as independent contractors is they gain a
competitive advantage by other companies that follow the rules.
And that is what we are seeing in the transit space. We have
people walking away from transit in cases to go use TNCs, but
only because those services are cheaper because those companies
aren't abiding by their obligations to treat their workers and
to classify their workers in the right way.
So I think AB-5 is a very good step in that direction. It
is a codification and a clarification of a supreme court
decision in your State--a unanimous decision, I should note.
So, you know, again, we think that is a good first step, to at
least give these workers the basic rights that employees, which
we believe they are, should have.
Mr. Garamendi. We really----
Mr. Willis. And--I am sorry, go ahead.
Mr. Garamendi. We really need to understand the difference
between an independent contractor and an employee to fully
comprehend why AB-5 was necessary. Could you elaborate on that
fundamental issue as quickly as possible?
Mr. Willis. Sure. Look, an independent contractor, in a
sense, is an independent business, and doesn't need the same
type of minimum wage protections, worker compensation
protections, benefit protections that a frontline employee
does. The idea that has been raised here, that just because
someone is a part-time driver, that they shouldn't be afforded
the rights as employees, there are a lot of part-time workers
here that are employees. Those two things are not inconsistent.
So, again, I think it is an important distinction.
Mr. Garamendi. We really need to understand, as a
committee, and we haven't really gotten into this in detail
yet, but we may need to do so to really write decent
legislation here. An independent contractor, an independent
business contractor, versus an employee, it really comes down
to who controls the time and the job itself.
Mr. Willis. Correct.
Mr. Garamendi. And in the case of Uber and Lyft, it has
been determined in California very clearly by the supreme court
and court cases that it is the company, Uber and Lyft, that
control the timing, the availability, or the access to the
work. We need to understand that.
With that in mind, there are many other issues that are
critical to the employee: tax collection, workers'
compensation, insurance, automobile insurance, liability
insurance, and other things that are in play in this
relationship. We need to go into it in detail.
I, frankly, think AB-5 was the right thing to do in
clarifying the difference between independent and employee,
which is what it does.
Mr. Willis. Yes.
Mr. Garamendi. It certainly affects Uber and Lyft. It does
affect others. But my own experience at this on the insurance
side is that it is an extremely important step forward in
clarifying these matters.
And for us right now, we do have in play, I think, a very
important matter, and that is the background check on the
driver, which was one of the issues that has been raised here.
Also we ought to have greater clarity at the national level,
the difference between an employee and an independent
contractor.
I will let it go at that, Mr. Willis, I am out of time.
But I would like to urge the committee to really hone in on
this very, very important matter. Use California. The court
case in California and the law that follows and implements that
court case----
Mr. Willis. Well, I think the lead that California has done
here with AB-5 is absolutely tremendous. And I think, you know,
your comments in support of that, I think, are right on. So
thank you for that.
Mr. Garamendi. I yield back.
Ms. Norton. Thank you, Mr. Garamendi. This distinction
between an employee and a contractor has stymied this Congress
now for some time. But I think we all can agree that, whether
you are an independent contractor or an employee, you serve the
public. Safety should come first.
Mr. Stauber?
Mr. Stauber. I thank you, Madam Chair, for holding this
meeting here today. This is a question for Mr. Martz.
When we think about rural communities, transportation to
and from work is always an issue of utmost importance. In a
growing competitive economic environment companies are looking
at every possible factor when deciding where to expand, and
when and where to open new facilities and break ground on new
projects. When Amazon, for example, was deciding where to put
their headquarters, one of their factors of consideration was
ease of transportation for work commutes.
In my rural district of Minnesota the vast majority of
people travel to and from work by personal vehicle. When a
district the size of West Virginia--you can imagine that these
folks sometimes have to travel 60 miles to and from work. And
when commutes are that long, you can also imagine that putting
in a subway system or expanding access to electric scooters in
rural Minnesota wouldn't really cut it.
So how can commuter vanpool programs fill a needed gap in
our transportation system in rural communities? And how are
they providing cost-effective job access in rural settings?
Mr. Martz. For example, like in your district, I would say
one of the bigger employers would be the mining companies
outside of Duluth. We don't do a lot in your district today,
but we do a lot with mining companies in other areas--in Victor
Valley in California, and in Phoenix, and Tucson, and areas
like that, where they do borax mining and copper--and so
forth--mining.
But what happens is a lot of these facilities that are
outside the urban areas that employ several hundred people, for
example, the local town generally might have, like in the case
I used, Nebraska City, 7,000 residents. You are not going to
fill all those jobs from those people. So the next town, which
might be 50 miles away, would be a next source for employment
for those people.
And that is our bread and butter. If we can get those
employers to work with us to find prospective employees, we can
put service into those areas in that fashion. And that is what
we do. Every day we do that stuff.
There are probably situations where in your district folks
travel from maybe like Cambridge to St. Paul, which is a pretty
good hike. It is a little bit outside the metro's service area.
Mr. Stauber. Yes.
Mr. Martz. But that is not an unusual trip for us. But that
is the kind of thing that we do all the time.
Mr. Stauber. Thank you. And I will say that--I just want to
make a note who these Uber drivers are, which I think is
important to frame this hearing by. Many of these drivers are
immigrants, middle-class parents taking on a second job,
students saving for college, and maybe a retiree making some
spending money. This committee must be mindful of these
drivers, these hard workers, while we legislate. Because the
worst law is one of the unintended consequences, and it would
be extremely unfortunate if we took action that limited these
populations' ability to participate in this industry.
And my last comment to this committee and Madam Chair, I
don't necessarily think that this committee should blindly
follow the State of California. My State of Minnesota is much
different than the State of California. It is much more rural.
And I think we have to have a broader look at this issue, and
the transportation network companies, and how we can serve not
only urban and metro, but rural communities.
Mr. Martz, I will give you the last minute.
Mr. Martz. Well, and there are very differing business
models that we have presented today, too. And one of my
concerns with this is, you know, the possibility of throwing
the baby out with the bathwater.
What we do has an extraordinary safety history, extremely
efficient, and we work very closely with the transit agencies
that are willing to partner with us, and DOTs and MPOs. So we
would like to do more. But we just--that is one of the reasons
why we are here, is so that we don't get thrown out in the
process.
Mr. Stauber. And I think that I just want to echo--Madam
Chair, you talked about safety being the number one priority. I
couldn't agree with you more. And I appreciate that comment.
And I yield back.
Ms. Norton. Thank you very much, Mr. Stauber.
Mr. Johnson?
Mr. Johnson of Georgia. Thank you, Madam Chairwoman.
Mayor Freeman-Wilson, as mayor I know that concerns about
transit, access, and equity matter a great deal to you. Though
the presence of TNCs has skyrocketed in major metropolitan
areas, more rural and suburban areas haven't seen the same
availability of ride-hailing services. At this time do you
think these ride-hailing services have helped or further
exacerbated the issue of transit equity?
Ms. Freeman-Wilson. Thank you, Mr. Johnson. That is
certainly a question and a concern that we have in local
communities. I think that there is an opportunity there, given
what the statistics have shown, given what we have seen to
date, for our local mayors and council members to join with
Members of Congress, to sit down with Uber, Lyft, Via, those
providers of ridesharing services, to ensure their commitment
to equity, to their commitment to providing more robust
opportunities in communities both urban and rural----
Mr. Johnson of Georgia. OK, thank you----
Ms. Freeman-Wilson [continuing]. That have seen----
Mr. Johnson of Georgia. Thank you. Now I am concerned about
the ride-hailing services' dependence on forced arbitration
clauses in the terms of service of their agreements. And what
might happen is some person, older person wanting to be hip and
cool like everybody else, and maybe the car is in for repairs
and the children have told him, well, instead of calling the
cab, that is just so old school. Why don't you call the ride-
hailing company?
And so the person goes onto their app on their phone,
proudly goes to the app store, downloads the app, and scrolls
all the way down to the box where it says, ``I agree to these
terms.'' And so they click that box, and they order a driver.
The driver arrives. It is in a beautiful neighborhood. It
is, clearly, some--you know, the person has money. And they
jump in the car, the driver hits the child lock button so that
they can't get out. The driver just happens to be recently
released on parole from the maximum security State pen, where
he served 30 years for murder. And he is out now, driving a
ride-hailing car. He pulls around, picks up his buddy, or maybe
the buddy was in the car to begin with, and they start leaning
on you, telling you that, ``Look, I need to get $5,000. Let me
have your bank card and your PIN number.''
And then they go ahead and get your money out at a bank.
And then the driver pulls out into the street, so excited that
he has got the money, and bam, he gets hit by a Mack truck. He
has failed to yield the right of way. Everybody dies.
And then your next of kin seek to sue, to recover for the
loss of your life, and only to find out in horror that you have
agreed to a forced arbitration clause that prohibits your next
of kin from taking the ride-hailing company, which is negligent
in many respects, to court for a trial by jury, and forces it
into an arbitration context.
Mr. Miller, have you had any experience with that
happening?
Mr. Miller. We have not. We don't have those types of
clauses in our apps. It is if you want to sign up, you sign up,
and you download it. It is a local ride. So, yes, we do not
have those types of clauses.
Mr. Johnson of Georgia. I have heard that the major ride-
hailing companies--who shall remain nameless, but they have
been named repeatedly, and they are not here today, they
refused to come--they have these terms of services. They have
these agreements in their term of services, these clauses.
Do you know anything about it, Mr. Willis?
Mr. Willis. Well, look, I think it is a great example of
these companies trying to not follow what other providers have
to follow here. And this sort of attitude that they are beyond
these type of regulations, these type of oversights, this type
of legal responsibility that other providers, whether they are
taxicabs, or transit, or other transportation services.
So I think, again, it raises another good example of the
problems here that we need to think about.
Mr. Johnson of Georgia. Why do you think they include those
clauses in their terms of agreement?
Mr. Willis. Because I think it is financially advantageous
for them, and I think they can get away with it, and no one is
really holding them accountable. And I think this committee and
other policymakers need to do that, especially if these
companies want to go, again, play and be a part of the public
transit network and framework. Issues like this just cannot be
tolerated.
Mr. Johnson of Georgia. Thank you, and I yield back.
Ms. Norton. Thank you, Mr. Johnson.
Mrs. Miller?
Mrs. Miller. Thank you, Chairwoman Norton. And thank you
all for being here today.
Transportation network companies have dramatically changed
the way people get around in my community. From initiatives to
make sure that students at Marshall University can get home
safely after a night out or a football game, to expanding
access from my district's older and disabled residents who
leave the house or have to attend a nonemergency medical visit,
ridesharing serves them all.
Ridesharing companies like Uber and Lyft have become a
central part of my rural community, one that typically relies
on personal vehicles for transit. Without a large taxi
community or reliable public transportation, ridesharing has
played an important role in lowering impaired driving accidents
and expanding access to services for underserved communities.
Mr. Willis, I worry that reclassifying ridesharing drivers
as employees will eliminate many of the benefits that the
transportation network companies provide for my constituents.
Currently, someone from my district can reliably hail a ride in
about 6 minutes from 1 of over 500 drivers who are working for
a ridesharing company. Most of the drivers in my district only
drive part-time to earn extra money on top of their full-time
job.
And I worry that reclassifying contractors will take away
the flexibility that drivers rely on to drive when they are not
at their main job, and will drastically increase the time
riders will need to wait for a ride and, in turn, could also
lead to a return to pre-ridesharing levels of accidents
occurring while driving under the influence, since ridesharing
will be less convenient and available.
Do you have data that would say otherwise, and that the
reclassification of contractors would not negatively impact
both drivers and riders?
Mr. Willis. Well, look, as I said in my opening statement--
and we submitted a report to this committee--we are not opposed
to these services. We think mobility on demand has a lot of
potential. But we reject the notion that, just because you are
offering innovation in this space, because you are providing a
service that I want, that you can do it by misclassifying your
drivers as independent contractors.
When you look at laws, especially now in California, and I
think in other States, that they should be classified as
employees. And as I said earlier, we categorically reject the
notion that, just because a driver is a part-time driver, I
don't understand how that makes them an independent contractor.
We have a lot of part-time workers in this country who are--and
correctly are--treated as employees. And I think a union
contract, I think employee status can be done in a way to
provide the flexibility that I think you are looking for.
Mrs. Miller. Well, I was looking for some data.
Mayor Freeman-Wilson, many TNCs have partnered with cities
and communities to show riders that the most efficient way to
get to their destination is by using a combination of
ridesharing and public transit. In rural areas, having access
to mass transit options can be extremely limited. How do we
continue to promote increasing options for consumers, instead
of limiting them?
Do you have recommendations as to how Congress can work
with the State, or on local levels to increase options for our
constituents?
Ms. Freeman-Wilson. Thank you, Mrs. Miller, for that
question. We absolutely do have recommendations. We believe
that one of the ways that can happen is by convening
roundtables, as an example, with local communities, both rural
and urban, to sit down with TNCs.
We believe that your experience in your rural area in West
Virginia is, quite frankly, unusual. We have 700--we have TNCs
in only 730 of our 19,000 cities, towns, and villages. And so
we think there is room for growth. But we know that Congress
has to step in to ensure that that growth occurs in a fair,
safe, and equitable manner.
Mrs. Miller. Well, our idea of urban is more like 55,000
people.
Ms. Freeman-Wilson. I understand.
Mrs. Miller. Mr. Miller, how has the taxi industry expanded
from urban to rural areas?
Can taxis fulfill the needs of rural communities, while
providing the same convenience that the TNCs are providing now?
Mr. Miller. Yes. I think it is a myth to think that taxis
can't do the same--provide the same types of services Uber and
Lyft--again, everybody is using apps today. So, yes, we can--we
do have the same types of platforms. Again, the difference
being we are not global. We are local, in-your-community types
of providers. So, yes, we can do that.
I think the industry as a whole needs to do better in rural
communities.
But again, when you have a playing field that is stacked so
far on one side that--where you don't have many regulations,
and on the other side you have more regulations, it is hard to
do business. We need to find a way to level that playing field
so everybody has the same opportunities, not just giving the
carve-outs and the advantages to one side versus the other,
just because they are new entrants. We are all taxi companies.
I mean, I hear a lot about how Uber and Lyft are technology
companies. They are not. Everybody is using an app today. If
using an app constituted you being a technology company, every
business in this country would be. Pepsi, Coke, everybody who
has an app, you can get fast food on delivery, and things of
that nature. So let's call it what it is. We are all taxi--we
are all for-hire transportation services, and we can all do a
better job, but we have to level the playing field. And this
myth that only Uber and Lyft had this fancy new technology,
they don't. We all have it and use it.
Mrs. Miller. Thank you so much. I yield back.
Ms. Norton. Thank you very much, Mrs. Miller.
Mr. Lowenthal?
Mr. Lowenthal. Thank you, Madam Chair, and thank you for
holding this hearing. And to the panelists, thank you. This has
been very interesting.
My question is to the mayor, Mayor Freeman-Wilson. You have
mentioned how some cities are partnering with TNCs to expand
transit options, either in areas that lack rail or bus transit,
or to serve workers that need to commute late at night. There
are these arrangements, or these relationships, or
partnerships. Can you give us a little bit more detail?
How are these partnerships initiated? Are they new
services, or do they replace services that may have been
provided by an infrequent bus or dial-a-ride service? Are we
talking about something new, or are we talking about
replacement of existing services when they--and how do the
partner--who--how do they come together?
Ms. Freeman-Wilson. Mr. Lowenthal, thank you for that
question.
What we found is that, because of the need, because transit
stops at certain times in most communities, because transit
doesn't go everywhere, that there is an opportunity for a
unique partnership. Those partnerships are generally initiated
by mayors, by someone who works at the direction of the mayor,
by regional transit agencies, and certainly by our regional
planning commissions.
What I would like to do is get you some specific examples
of that, because I think that this will help the committee as
you develop this legislation. So we can provide that from NLC
staff.
Mr. Lowenthal. Mr. Willis, I am sorry, my question is, in
terms of these partnerships that are developing, how would you
like to see cities and transit agencies come together? What are
some of the critical issues?
You have already indicated this, but now, when cities are
initiating, or transit agencies are seeking out, what should
they be looking for?
Mr. Willis. In the TNC space, or----
Mr. Lowenthal. In the TNC space.
Mr. Willis. Look, as we have discussed here--and I think
this is why we want to be a part of this discussion--these
entities have to agree to create a service that is like public
transit. They have to treat their workers in the right way.
They have to provide a safe service. That has been discussed a
lot here. They have to be equitable and accessible to all
communities, a standard that I don't think exists here.
And again, on the workers' side, the insistence of the TNC
industry to misclassify their workers drives down those wages.
We think that runs counter to the promise of public transit,
which creates a lot of good jobs in our communities, that
supports other workers to get to their place of employment.
So, you know, public transit binds our communities
together. And until the Ubers and Lyfts and Vias of the world
can figure out a way to operate more, treat the workers in the
right way, provide this same level of service, we don't think
they should be part of that public transit mix.
Mr. Lowenthal. Thank you. The next question is back to
Mayor Freeman-Wilson.
As I understand--and we have talked about it a little bit--
TNC rides are heavily subsidized by investors. Is that not so
today?
So how do cities manage this risk that a TNC partner may
have to scale back increases, or increase prices? You know, we
now have California's AB-5, and really looking at the role. And
the existing model may not be able to sustain itself the way it
is now. Do cities deal with this risk that, all of a sudden, it
could go away? Or what are some of the concerns that cities
would assume? Do they assume risk in developing partnerships?
Ms. Freeman-Wilson. I am sorry, do----
Mr. Lowenthal. I am just wondering about the risk that a
city assumes if they develop a relationship with the TNCs.
And we know that these ridesharing or the--or TNCs are
heavily subsidized now. We know that they are not making money.
I just want to know what risk cities are assuming by offering
these kinds of services, or these partnerships. Are there risks
that go along with this? And who assumes those risks?
Ms. Freeman-Wilson. So I would say that there is not an
assumption of risk. I think that--it more speaks to the
responsibility, as we--that we have as local leaders to ensure
certain things for our citizens. And the best way to ensure
that is through communication.
Communication of loan doesn't ensure that risk. Even
regulation, like our colleagues have done in Eugene, Oregon,
doesn't assume a risk. It simply speaks to the responsibility
that we have.
Mr. Lowenthal. Anybody else want to----
Mr. Willis. Congressman?
Mr. Lowenthal. Is there going to be risk involved in this?
Mr. Willis. Could I answer that, as well?
Mr. Lowenthal. Yes.
Mr. Willis. Congressman, I think the Federal Government is
going to find out very quickly whether or not it is going to
have risk.
I mean, if GSA does go forward and contract with TNCs for
these services, the question has to be asked. That final bid or
quote that they give you, is that going to be something they
are going to be able to come back and change and say, ``We
can't make money on this''?
As soon as the investors say, ``We want to see profits in
these areas,'' are they going to now come to the Federal
Government and say, ``We now have to increase prices here
because we can't sustain the subsidy that we are giving to our
drivers now''? You are going to find out very quickly whether
or not that happens.
Mr. Lowenthal. Well, I am glad we are at least discussing
that issue.
Yes?
Mr. Martz. And in our case, which is a little different, we
provide the vehicles, we assume all the risk, financially.
There is no risk to transit agencies, cities, counties. And on
insurance, as well, we completely insure and indemnify these
contract sponsors.
So it is a little bit different model, all together. But
there is assumption of the risk on the part of the private
sector on our particular services. And I wanted to make that
clear.
The other thing, though, is that cities and counties--you
are bringing this up----
Ms. Norton. Thank you very much.
Mr. Martz [continuing]. We don't have a lot of----
Ms. Norton. Your time has expired. Thank you.
Mr. Lowenthal. Thank you, and I yield back.
Ms. Norton. Mr. Smucker?
Mr. Smucker. Thank you, Madam Chair. I want to go back to
the testimony and the legislation that is being proposed by two
other Members. And I am going to personally take a look at
that, because, obviously, every rider, every user of any form
of transportation should be able to feel safe when they enter a
vehicle, whether it is an Uber driver, Lyft driver, train,
transit, taxi, whoever it may be. And so I do think it is--you
know, we need to look at ensuring that we are adequately doing
what we can to ensure that drivers are protected.
Unfortunately--fortunately, I should say, in my district I
am not aware of any specific incidents where an Uber or Lyft
driver had been involved in an assault, and certainly no
murder. I do want to read, though, a headline from about a year
ago, which I vividly remember. And it says, ``Lancaster City
Taxi Driver Charged with Raping Woman After Dropping Her Off at
Her Home.''
And in this specific situation, the driver of the taxi
offered to take the woman's luggage into the home for her, and
ended up raping her. How do you think that happened, Mr.
Miller?
Mr. Miller. How do I think it happened?
Mr. Smucker. Yes. What happened in the system to allow a
taxi driver to do that?
Mr. Miller. It clearly fell through the cracks. I don't
know the specific article you are talking about, but it happens
on all sides. I am not here to bash Uber and Lyft, because we
have TNCs within our membership, as well. It----
Mr. Smucker. I know I have talked to many Uber and Lyft
drivers in my district who are grateful for the opportunity,
for maybe a part-time job, or something of that sort. And none
of them have assaulted anyone. None of them have murdered
anyone.
So the idea that I have heard in this hearing today,
bashing all Uber and Lyft drivers due to the criminality and
the horrific crimes of a few of them, it is insulting.
Mr. Miller. Congressman, when we----
Mr. Smucker. Do you think the taxi driver in Lancaster City
would have been required to have been fingerprinted?
Mr. Miller. They should have been. And that is why I am
here today. We are pushing for everybody----
Mr. Smucker. I would actually like to have more information
on that. I would like to have more information on specific
statistics on taxi drivers, and how many have been involved in
an assault or a----
Mr. Miller. That is one reason I think why we are all here
today, is we would like to find a way to track all this.
Mr. Smucker. I am going to submit it to the record, some
questions along this line that I would like you to answer.
I do also want to ask Mr. Miller, you know, the
ridesharing, the idea that--the benefit of what Uber and Lyft
have been providing in my district to folks who do not have
access--we don't have a lot of taxi drivers in our area. Why is
it that those ideas have not--don't you think they are long
overdue? And why weren't they developed by the taxi and
limousine drivers industry?
Mr. Miller. Are you talking about just the TNC model
itself?
Mr. Smucker. Yes.
Mr. Miller. Again, it is a business that has been around
for hundreds of years, and they have been doing things the same
way.
Again, competition is not a bad thing. Uber and Lyft found
a new model, and something that appealed to consumers. We are
all doing it now. Again, the difference being now if we--we
have some of our members who have traditional taxi companies,
but also have divisions of the TNC model themselves. It is
harder for us for some reason in localities to get approved for
a TNC model.
Mr. Smucker. You mentioned the regulation. You specifically
mentioned that taxi drivers today by regulation are not allowed
to provide congestion pricing.
Mr. Miller. Correct.
Mr. Smucker. Is that true?
Mr. Miller. Correct.
Mr. Smucker. Would you support us removing that regulation?
Mr. Miller. I think--I would have to go back, but I would
venture to guess if you polled our drivers, they probably would
say, yes.
Mr. Smucker. You--and the association would support that
position?
Mr. Miller. I can't answer for them right now, but I can
take it back to them and get you an answer for that.
Mr. Smucker. You did--I can relate to the situation you are
in, where you are heavily regulated, and a new disruptive model
really is impacting, and you are potentially looking for
barriers to entry, or at least leveling the playing field. You
have said multiple times you would like to see the playing
field leveled.
Mr. Miller. Absolutely.
Mr. Smucker. I think the free market has driven this kind
of innovation. What regulations would you support removing on
your current taxi drivers and limousines?
Mr. Miller. I would be happy to get that from the
leadership, and get you a direct answer to that. I just don't
have all the--way to answer that today without vetting it
through them. But we----
Mr. Smucker. Do you have one regulation that you would
support removing?
Mr. Miller. I think the insurance right now--we have a
higher standard for getting insurance than they do. We would
like to see us be able to qualify for that hybrid type of
insurance because, again, you are talking about a $5,000-a-year
cost versus----
Mr. Smucker. I am running out of time, and I am sorry. I
would love to have more of this discussion. In fact, I will
submit a question in that regard, as well.
Mr. Miller. Absolutely.
Mr. Smucker. I would love to hear from you what regulations
you would like to see removed.
Mr. Miller. Absolutely.
Mr. Smucker. Thank you.
Ms. Norton. Well, Mr. Smucker, if you submit the question
to the chair, we will make sure it goes to Mr. Miller.
Mr. Smucker. Thank you.
Ms. Norton. Mr. Carbajal?
Mr. Carbajal. Thank you, Madam Chair. And let me just start
by saying how disappointed I am that Uber and Lyft felt they
could not come today to be part of this hearing. I think it was
a real loss of an opportunity, and it is really unfortunate.
Let me just say that, before I came to Congress, I served
as a county supervisor. So I know firsthand how TNCs work in
our communities, the benefit they provide, but the challenges
and the cons. And I know those issues, firsthand.
And in my community, in my district, there have been public
safety incidents that have dealt with Uber, Lyft, and even
taxis. And I think there is a lot to discuss and explore how we
can make TNCs work better for everyone.
Mayor Freeman-Wilson, thank you for being here. In
particular, I share your local government service. And in your
testimony you cite some compelling statistics regarding our
workforce. There are roughly 53 million freelance workers
today, comprising 34 percent of our total U.S. workforce. Uber
and Lyft employ nearly 3.5 million of those workers in the
United States.
As we look at the future of self-driving cars, and
improvements in automation, what are recommendations we should
look at, in terms of preparing our workforce towards this
shift?
Ms. Freeman-Wilson. Thank you, Mr. Carbajal. And thank you
for your comments about my service.
We are gravely concerned that over the next 20 years there
may very well be a drastic reduction, if not an elimination, of
those who currently work for Uber and Lyft and similar
companies. And we believe that the Federal Government and
Congress can be a significant partner in terms of workforce
development, retooling those skills of those workers to
participate in new technology.
Mr. Carbajal. Thank you. Let me continue. More than half of
the States have established a State infrastructure bank. How
have infrastructure banks helped cities meet their
infrastructure needs?
And two, if there was a Federal infrastructure bank, how
can we best model this to anticipate some of the future needs
in transportation?
Ms. Freeman-Wilson. Thank you for that question. We have
had a wonderful experience with that in the State of Indiana,
and particularly the city of Gary. It is not necessarily an
infrastructure bank, but it is called Community Crossings
program, where we can get matching funds. We have utilized
those funds every year to improve our infrastructure to the
tune of about $40 million. And they have done it in communities
large and small all over the State.
We believe a similar program with the Federal Government
would only encourage the improvement of our infrastructure, and
reduce the danger that we see on our streets now.
Mr. Carbajal. So in that program you mentioned, were those
grants or low-interest loans?
Ms. Freeman-Wilson. They were grants, actually, and they
were matching grants. And the smaller the community, the more
you were eligible for in matching dollars.
Mr. Carbajal. Thank you for sharing that with me.
Madam Chair, I yield back.
Ms. Norton. Thank you very much, Mr. Carbajal.
Mr. Balderson? No, I am sorry, he is not here at the
moment.
Ms. Davids?
Ms. Davids. Thank you, Chairwoman, Ranking Member, and the
witnesses for being here today.
I represent the Kansas Third Congressional District, and we
are fortunate to have a strong transit authority in my district
and the Kansas City metro area in the Kansas City Area
Transportation Authority, with a strong leader in Robbie
Makinen, who really feels the needs of our area, and is doing
an amazing job. And because Robbie understands our district and
transit and transportation, he has helped push forward RideKC's
micro transit pilot, which is now in the process of expanding
to add taxi-type vehicles to the fleet during high demand
times.
I had the pleasure of trying out the micro transit pilot
not too long ago, and I am definitely on board. We have--it is
an innovative pilot that is taking people back and forth
between Wyandotte County, Johnson County, and riders can use
this on-demand service to augment their commute. It is a
project that is led by a local entity, and I very much
appreciate the partnerships that are going on there.
It is clear to me, because of this and many people in
Kansas, that we have to move forward with newer models of
mobility. And so my first question is for the mayor.
I have heard you and actually a few of the other folks on
the panel testifying today about the desire for the Federal
Government to invest in and encourage investment in these
innovative-type partnerships and/or ramping up pilot programs,
especially where there are local collaborations. Can you
elaborate a little bit on the ideas that you have for how those
kind of programs--what should we be looking for, and how can we
encourage those investments or make those investments?
Ms. Freeman-Wilson. Well, first, thank you for the question
and for the example in the Kansas City community, regional
community, because I think it is a great example of how all of
these modes can work together.
I will give you another example from northwest Indiana, and
that is our double-tracking project that we have gone through,
and our expansion of our commuter rail service. It not only
uses the existing South Shore Line, and looks for expansion of
that South Shore Line to a new area, a new regional area, but
it also uses on-demand service to meet the needs of some of our
disabled residents.
We believe that those types of models only come through
communication between local leaders, regional transit leaders,
Members of Congress to encourage both public providers and
private providers to come to the table. And that is done
sometimes by challenge grants, by incentive grants that say
when you work together you are more apt to get that type of
funding.
Ms. Davids. Thank you, Mayor.
And then, Mr. Martz, I believe you mentioned earlier the
idea of having pilot grants that would eventually be integrated
into transit and multimodal grants as--moving forward. Can you
elaborate a little bit about that?
Mr. Martz. Yes. If it is going to be new, if you could
provide new service that meets certain standards, meets the FTA
regulations, could you apply for funding to provide new
service, pass through with a public steward? And then, if it is
successful, and continues and so forth, to be made part of the
regional core program, and be eligible for formula funding on
an ongoing basis?
Ms. Davids. And do you think that right now there is a
dearth of those opportunities? Does that--that doesn't exist?
Mr. Martz. Yes.
Ms. Davids. And so we need to add more flexibility into----
Mr. Martz. Exactly.
Ms. Davids [continuing]. The way that----
Mr. Martz. I think we need to add more flexibility for
the--your community is a little different. But even before,
when Johnson County came over and started working with KCATA, I
mean, there were opportunities prior to that.
We have had other situations where a large--in San
Francisco it took 10 years to get the MTC to finally agree to
work with us. And there were communities that wanted to do so,
but they couldn't figure out how they would share the Federal
funding, and that was stymieing the entire process. We have
resolved that. Just in the last year, our program has grown
from 600 to 800, and will probably be 900 vans here just before
the end of the year. So, I mean, it works.
Ms. Davids. Yes.
Mr. Martz. It works. But you have to tweak the system a
bit.
Ms. Davids. Yes. Well, I appreciate your time and efforts
here today. And I also just appreciate the recognition of the--
I think the KCATA has been a pretty interesting and amazing
model for some of this stuff.
So I yield back.
Ms. Norton. Thank you very much.
Ms. Wilson?
Ms. Wilson. Thank you, Chairwoman Norton. And thank you to
our witnesses for sharing your perspectives on the challenges
and opportunities transportation network companies face.
In just a few short years transportation network companies
like Uber and Lyft have transformed the way we get from point A
to point B, whether they are going to work, a doctor's
appointment, out to eat, or even a public transit station,
millions of Americans increasingly depend on the services that
TNCs provide.
As Members of Congress, it is our obligation to ensure that
these businesses are prioritizing the interests of passengers,
drivers, and the communities in which they operate.
I am deeply troubled by growing reports of violence and
sexual assault by drivers, lack of safety oversight, and
inadequate background checks. Faulty background checks and
insufficient safety measures are putting passengers in Florida
and throughout the Nation at tremendous risk. In March of this
year a woman visiting my hometown fell asleep in an Uber and
was assaulted by her driver. It was later discovered that the
driver had an extensive criminal record, spanning decades. Uber
and all transportation network companies can and must do better
on safety.
As chair of the Committee on Education and Labor
Subcommittee on Health, Employment, Labor, and Pensions, I am
also concerned about efforts to misclassify workers and
undermine their right to organize, which have led to protests
by drivers and other stakeholders. That is why I led three
hearings on Protecting the Right to Organize Act, known as the
PRO Act, which would prevent misclassification by clarifying
the tests for determining whether a worker, including a
rideshare driver, is an employee. I want to thank both Chairs
DeFazio and Norton for being original cosponsors of the PRO
Act.
The tremendous success that Uber, Lyft, Via, and other
transportation network companies have experienced can largely
be attributed to their drivers' efforts. They deserve to be
rewarded accordingly.
Like many colleagues on this committee, I am disappointed
that Uber, Lyft, and Via declined Chairman DeFazio's invitation
to testify today. Nonetheless, I am committed to working with
Chairs DeFazio and Holmes Norton to find solutions to address
many of the issues being raised today. Thank you, Chairwoman
Norton. I have a few questions.
Mr. Willis, in your testimony you discuss how the ride-
hailing industries see fair wages and collective bargaining for
drivers as an impediment to growth, and are actively working to
undermine collective bargaining through misclassification. As
you know, the PRO Act would expand the definition of employee
and employer to discourage the classification of workers as
independent contractors.
How would clarifying the definition of an employee like in
the PRO Act create good jobs for rideshare drivers?
Mr. Willis. Well, Congresswoman, thank you for not only
your statement, but for the tremendous leadership that you have
offered on the PRO Act and other issues that are important to
the labor movement and frontline workers.
I think you are absolutely correct. The PRO Act, by, quite
frankly, adopting what we have seen now in California, in terms
of how to properly classify who is an independent contractor
and who is an employee, among other things, would ensure that
those workers are covered by minimum wage standards so that we
don't have drivers below the minimum wage in some of the cities
in which they drive, making as low as $3.75, as I cited
earlier.
And, you know, if you create a framework where these
drivers are employees, they then also have the opportunity to
have a union voice on the property. We know that union workers
across the board do better on both wages and benefits, working
conditions, saying what goes on in the workplace than their
nonunion counterparts. And we think that is an important path
forward for these drivers.
So, again, thank you for your leadership on these issues.
Affording these drivers basic rights--you know, we are--as I
said at the outset, we are not trying to put anyone out of
business here. We want to support these drivers and do what is
right by them. And the right classification on employee versus
independent contractor is an excellent place to start.
Ms. Norton. Thank you very much, Ms. Wilson, and thank you,
Mr. Willis.
Are there any further questions from members of the
subcommittee?
Seeing none, I would like to thank our colleagues and each
of the witnesses for their testimony today. Your contribution
to today's discussions has been very informative and helpful,
and I can assure you have enabled us to move forward with
corrective action.
I ask unanimous consent that the record of today's hearing
remain open until such time as our witnesses have provided
answers to any questions that may be submitted to them in
writing, and unanimous consent that the record remain open for
15 days for any additional comments and information submitted
by Members or witnesses to be included in the record of the
day's hearing.
Without objection, so ordered.
If no other Members have anything to add, the subcommittee
is now adjourned.
[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Chairwoman Norton.
Thank you to our witnesses for being here today.
I especially want to welcome Mr. Jon Martz, appearing on behalf of
Commute with Enterprise.
Enterprise has a large presence in my district and is helping meet
the transportation needs in rural areas.
Today's hearing focuses on a newer mobility service that operates
as part of our surface transporation system--transportation network
companies (TNCs).
In fewer than 10 years, TNCs have rapidly expanded in the United
States and around the world.
Although service began in large metropolitan cities, TNC operations
continue to expand into suburbs and rural areas, including in my
district in Missouri.
Since access to transportation options is limited in rural areas,
TNCs can fill the gaps in our transporation networks and improve the
quality of life for rural residents.
TNCs also can offer low cost and convenient mobility for other
underserved populations, like the elderly, disabled, or individuals who
have difficulty driving or accessing public transportation.
As part of our work towards a surface reauthorization bill, we must
discuss and address the public policy issues that have emerged over the
last nine years.
We must ensure that TNCs contribute to our goals of supporting
economic growth, maintaining public safety, and increasing
transporation options and mobility through further innovation.
TNCs, along with other technological advancements, hold great
promise to improving our mobility.
I am confident that we can address these issues as we continue to
work towards development of a surface transporation reauthorization
bill, while continuing to foster innovative advancements in
transporation.
I want to again thank our witnesses for being here, and yield the
balance of my time.
Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in
Congress from the State of Texas
Madam Chairwoman, I am delighted that we are having this hearing so
that we can focus on the future of transportation network companies or
TNCs. The most well-known TNCs like Uber and Lyft, have grown in
popularity and usage in recent years.
On demand transportation services have changed the landscape of how
passengers interact with drivers for hire. While convenient for many,
these services also raise many questions about integration with
existing transit services; impacts on congestion and mobility in major
cities and states; safety, and the impact on labor and people who work
in traditional transportation industry jobs.
How will we handle and provide opportunities for our workers who
may be displaced by automated vehicles? While TNCs are expanding
operations and opportunities for employment, these benefits to drivers
may be short-lived, given that Uber will begin testing self-driving
cars later this year.
Mobility on demand is viewed by many as the way of the future,
making it easier for riders to travel from place to place without
having to bargain or haggle over fees and multiple payments. For many,
it is a matter of convenience.
People who do not have cars and rely on public transportation can
benefit from autonomous vehicle services in these areas where they may
be needed.
I am concerned with ensuring that communities of color and
underserved communities have access to these services. Transit
integration and providing access to existing public transportation
systems would be beneficial to underserved communities. These services
may benefit many people who work late night shifts who have a difficult
time trying to get home after work.
Safety is always a critical issue. Cities and states share a role
in regulating TNC operations to ensure that they are safe and do not
cause harm to passengers, drivers and other vehicles.
While the services that TNCs provide may be convenient, there seem
to be little protections for drivers. TNCs consider themselves to be
technology platforms and not transportation companies, and consider
their drivers to be independent contractors, not employees.
Consequently, TNC drivers are not eligible for benefits and must pay
self-employment tax to cover Social Security and Medicare. My concern
is for the drivers and ensuring that they are not taken advantage of as
they seek to provide for their livelihood and families.
My hometown of Dallas is a transportation hub. We have five
interstate highways, we have the DART light rail, and we are hoping to
build a high-speed rail line to Houston.
As a major transportation hub, Dallas not only serves as a test
site for automated vehicles, but our city will also serve as a test
site for the Uber Elevate project to develop flying cars.
Dallas is the fifth-most-congested city in the nation, in large
part because we are one of the most rapidly growing cities in the
nation. As we continue to look for ways to increase safety and
alleviate congestion in the near term, we must also set a course for
smart transportation systems of the future.
We have a lot of issues that we must address and work out that
surround TNCs and their current and planned operations. What I hope to
see is a coherent plan for an integrated transportation system that
benefits all of our communities.
Madam Chairwoman, again thank you for this hearing and I look
forward to the panel of expert witnesses and our exchange of ideas.
Prepared Statement of Hon. Steve Cohen, a Representative in Congress
from the State of Tennessee
Thank you, Chairwoman Norton and Ranking Member Davis for holding
this important hearing.
I appreciate the opportunity to examine the challenges and
opportunities of transportation network companies, especially in the
context of Complete Streets.
Between 2008 and 2017, drivers struck and killed 49,340 people who
were walking on streets across the United States.
That's more than 13 people per day, or one person every hour and 46
minutes.
We all have a responsibility to operate so that our roads can be
enjoyed by all users, both safely and equitably.
This is an issue that is personal to me.
Nationally, Tennessee is the 12th most dangerous state for
pedestrians.
In my district, drivers struck and killed 210 people who were
walking between 2008 and 2017.
Out of more than 100 major metropolitan areas in the nation,
Memphis is the 11th most dangerous for people biking and walking.
This is why I introduced H.R. 3663, the Complete Streets Act of
2019, with Senator Ed Markey of Massachusetts.
This bill will help to promote safer and more accessible
transportation routes both in Memphis and across the United States.
Local and regional entities would apply for technical assistance
and capital funding to build safe streets projects, such as sidewalks,
bike lanes, crosswalks and bus stops.
Creating Complete Streets means that every transportation project
will make the street network better and safer for drivers, transit
users, pedestrians, and bicyclists.
They make it safer for people to access a ride share service, allow
buses to run on time and make it safe for people to walk to and from
train stations.
They ultimately make our towns better places to live.
As transportation network companies continue to proliferate, it is
very important that they work with communities to operate as safely as
possible for all road users.
Thank you. I yield back.
Report entitled ``The Costs of Doing Business: Why Lawmakers Must Hold
the Ride-Hailing Industry Accountable as They Undermine Their Workers
and Play by Their Own Rules,'' by the Transportation Trades Department,
AFL-CIO, October 2019, Submitted for the Record by Hon. Peter A.
DeFazio
The Costs of Doing Business: Why Lawmakers Must Hold the Ride-Hailing
Industry Accountable as They Undermine Their Workers and Play by Their
Own Rules
Transportation Trades Department, AFL-CIO
October 2019
Public transportation is the glue that binds communities
together. It connects Americans from all walks of life to home,
work, and school, spur local and regional economic growth, and
provide good jobs in operations, maintenance, and design.
This is no accident. Decades of carefully crafted policy at the
local, state, and federal levels has enabled our nation's public
transportation networks to deliver safe, reliable, and efficient
service at affordable prices. These services are provided to all
Americans--regardless of socioeconomic status or physical ability--and
are correctly touted for their environmental benefits.
Yet, the decades-long promise of public transportation is now
threatened by a severe lack of resources. Shoestring budgets brought on
by years of chronic underfunding at all levels of government have
prevented agencies from growing to meet current demands.
Meanwhile, a new threat to public transportation, and the
communities who rely on it the most, has emerged in the form of unfair,
unregulated competition that believes it is entitled to play by a
different set of rules.
Ride-hailing companies like Uber, Lyft, and Via are competing
directly with public transit for both customers and, if they have their
way, public dollars, while operating under their own terms outside of
the regulatory framework that applies to public transit systems.
Even worse, their current predatory business models trap drivers in
low-wage, no-benefit positions, offer no guarantee to customers that
services will be safe or equitable, and contribute questionable
economic benefits and adverse environmental effects to the communities
in which they operate.
For these reasons, the Transportation Trades Department, AFL-CIO
(TTD), is calling on public transportation agencies and lawmakers to
examine the exploitative practices of ride-hailing companies and
consider the economic and social impacts those practices have on local
communities when weighing how to spend limited federal transportation
dollars.
Background
In Search of a Sustainable Business Model
Over the past ten years, ride-hailing companies have generated
significant demand for their services, with nearly 40 percent of
Americans having now used a ride-hailing app.\1\ In doing so, they have
radically transformed both models and expectations for mobility and
employment. But the key feature that drives these companies'
popularity--relatively affordable and convenient service--is simply not
sustainable. Their current business model artificially drives down
prices by classifying employees as independent contractors, often
paying them less than minimum wage, avoiding local and federal
regulations, and massively subsidizing trip costs through billions in
private capital.
It is no wonder then, that these companies are seeking sustainable
revenue in other markets: food delivery, on-demand bicycles and
scooters, automated vehicle deployment, and partnerships with public
transportation providers. In some regards, these have been positive
steps. For example, bike-sharing services provide mobility options and
boost transit ridership, and workers who are classified correctly as
employees in that industry have successfully exercised their right to
form and join unions across the country.
However, these same companies should not be allowed to undercut
public transportation by avoiding regulation while also competing with
public transportation providers in seeking federal funding for the
provision of their own services. We cannot stop Wall Street investors
from pouring billions into these corporate entities, but we can ensure
these same entities are not permitted to prey on public transportation
and fleece the taxpayer.
Unfortunately, the ride-hailing industry has demonstrated a pattern
of bad behavior that lawmakers cannot ignore. From day one, ride-
hailing companies have fought nation-wide to bypass regulations,
creating a regime that favors profits over worker and passenger safety
by aggressively working to preempt local decision-making, a tactic one
recent report aptly referred to as the ``buy, bully, and bamboozle''
strategy.\2\ Despite the success of their efforts to define their own
regulatory structure and avoid what they view as a costly patchwork of
regulations, these companies have failed to demonstrate a clear path
toward long-term profitability for their shareholders.\3\ Put simply,
to turn a profit, ride-hailing companies must either increase fares or
cut driver pay.
Yet, because of fierce competition in the industry, neither is
possible. Incidentally, it should be no surprise that the ride-hailing
industry is exploring ways to eliminate drivers altogether through
automated vehicle technology.\4\
We have long known that the ride-hailing industry sees competing
with public transportation for riders as a growth strategy.\5\
Yet, we have seen a startling pivot in recent months. It is now
evident that these companies no longer see competition with public
transportation as enough to drive profit. Instead, they now plan to go
directly after federal public transportation funding themselves to pad
their losses and help prop up their currently unsustainable business
models. In other words, if they cannot turn a profit for their
shareholders, they will just ask the American taxpayer to do it for
them.
The Growing Ecosystem of Transit and Ride-Hailing Partnership
As far back as 2015, the United States Department of Transportation
(USDOT), under the administration of President Barack Obama, began
showing significant interest in propping up ride-hailing as a mobility
solution for cities. In a report issued by the USDOT, then Secretary of
Transportation Anthony Foxx (now Chief Policy Officer at Lyft)
highlighted proposals by cities to subsidize ride-hailing trips using
public funds for first-mile/last-mile connections to transit as an
example of a, ``future transportation system that meets the needs of
all city residents.'' \6\
The federal government's interest in ride-hailing platforms and
efforts to integrate them into our transportation network have only
increased since then. The USDOT's Integrated Mobility Innovation and
Mobility on Demand Sandbox Programs, for example, use federal funding
to subsidize for-profit companies like Uber, Lyft, and Via as they seek
new ways to integrate their own services into public transportation.\7\
Congressional committees have also shown interest in the growing number
of partnerships between transit agencies and mobility on-demand
services, including ride-hailing platforms.\8\
Yet, the environment facilitated by USDOT for new technologies is
slowly edging its way into formal policy, with seemingly no thought
given to the potential downsides of these partnerships. For example, in
April 2019, the Federal Transit Administration (FTA) took early steps
towards normalizing the use of ride-hailing platforms in cooperation
with or as a substitute for public transportation.
TTD's public comment on that notice provides a further exploration
of FTA's actions and why we believe this is such an ill-advised
approach.\9\ TTD recognizes the opportunity that on-demand services
offer and believes app-based microtransit and first-mile/last-mile
connections to transit can be an exciting new way to drive growth in
public transportation. To that effect, we welcome the opportunity to
work with any partner that is advocating for more and better public
transportation services.
However, we expect partners in innovation to subscribe to the
promise of public transportation established by more than 50 years of
federal precedent. That is, it must be equitable and accessible to all,
affordable, safe, reliable, and that those who work in this sector must
earn fair, living wages. Unfortunately, so far, the ride-hailing
industry has not lived up to these expectations.
Meeting the Promise of Public Transportation
Employee misclassification and driver pay
Contracting with or outsourcing services to for-profit ride-hailing
companies may seem like an appealing solution for cash-strapped transit
agencies. However, the relative affordability of Uber, Lyft, and Via--
which makes them seem like such an attractive option--is rooted largely
in the fact that they exploit their workers. By misclassifying them as
independent contractors, these companies artificially and temporarily
drive down the true costs of their services by passing off operating
costs such as vehicle maintenance and insurance onto their drivers.\10\
This is an unsustainable model for riders and a punitive model for
workers that both lawmakers and transit agencies must see for what it
is.
Federal transit policy has long ensured that the use of federal
funding for public transportation comes attached with strong labor
protections, which protect the right to collectively bargain.
It is because of those policies that the average hourly wage for a
bus driver is nearly $20 and as high as $40 in some cities.\11\ In
addition to paying living wages, union jobs in the public
transportation sector come with good benefits, including overtime, sick
leave, flexible scheduling, health insurance, and pension plans. Unions
in the public transportation sector have also championed programs to
create apprenticeship pipelines for workers to gain new skills, adapt
to and embrace new technologies, and earn better pay.\12\
By contrast, Uber and Lyft lure drivers with the promise of high
earnings, but slash them to the bone once they establish a strong
foothold in a market.\13\ Many drivers make less than the minimum wage
of the city they are operating in, and worse still, there have been
reports of workers making as little as $3.75 an hour after
expenses.\14\ At the same time, these companies have invested millions
fighting efforts to classify workers as employees, making it all but
impossible for drivers to organize and collectively demand fair
treatment and living wages.
To be sure, there have been victories for workers. The Dynamex
California Supreme Court decision and the passage of AB 5 in
California, for example, make clear that nearly all platform workers
must be classified as employees.\15\ While AB 5 is only a first step in
giving drivers the right to collectively bargain, Uber, Lyft, and
others have seen it as such an existential threat to their bottom lines
that they plan to invest $90 million into a ballot measure to overturn
the law.\16\ Nonetheless, AB 5 has already provided lawmakers across
the country with a valuable model for empowering workers, who--for no
other reason than ride-hailing companies' looking to eke out extra
profit by stripping them of their deserved rights--have been wrongly
classified as independent contractors.
Effects on exisiting transit service and congestion
Despite claims by the ride-hailing industry that they intend to
complement existing public transportation, by their own admission, it
is clear they intend to undercut these services. In their initial IPO
filing, for example, Uber identified public transportation as a $1
trillion market that they could compete for a slice of.\17\ Likewise,
in a recent presentation, Via's head of public policy argued that
subway service is too expensive and that buses are inefficient,
suggesting instead that the future of public transportation is their
own privatized model.\18\
By shifting riders from high-occupancy vehicles like buses and
railcars to small vans or personal vehicles, these companies will do
nothing to alleviate one of the greatest problems public transportation
can solve: reducing congestion. In fact, a number of studies have shown
just the opposite. Ride-hailing platforms have already added 5.7
billion miles of driving annually in just nine of the largest cities in
America, a number that we expect to grow significantly each year.\19\
While pooled rides on services like Uber and Lyft may seem like a way
to decrease their overall contribution to additional vehicle miles
traveled, studies have shown that low utilization of these services
does not offset their traffic increasing effects.\20\ Furthermore,
studies have shown that companies like Uber, Lyft, and Via are
primarily substituting ride-hailing in place of public transit, biking,
and walking rather than replacing trips commuters would have taken in
their personal vehicles.\21\ Beyond adding more VMT to our roads, a
significant portion of Uber and Lyft's miles are ``deadhead'' trips--
that is, miles traveled without any passengers in the car.
In some cities, deadhead miles account for between 20 and 50
percent of all trips.\22\ While federal, state, and local governments
have invested vast resources into improving air quality, ride-hailing
may undo those improvements without increasing the efficiency of our
transportation network.
We urge lawmakers and transit agencies to give full and careful
consideration to the downsides that commuters and communities will bear
if public policies encourage services that place significant new
pressures on our roads and air quality.
Cost to consumers and equity
Unlike public transportation, ride-hailing platforms are not, and
were never, intended to serve all road users equally. The fact is, the
majority of ride-hailing platform users come from wealthy households
and the average ride cost puts their services squarely out of the hands
of lower-income customers.\23\ Consider, for example, that the average
Chicago Transit Authority fare is $2.69, while Lyft and UberX trips
average $18.13 and $17.90 respectively, and Lyft Line and UberPool
trips average $14.04 and $9.33, respectively. This means that single-
occupancy rides on both platforms average $15-$16 more than transit
services, and shared-ride services average $6-$11 more.\24\ To make
trips using ride-hailing services affordable, transit agencies would
have to significantly subsidize these platforms with public money. It
would be nothing more than a subsidy for a handful of for-profit
companies at taxpayers' expense, with unproven benefits to commuters.
At the same time, ride-hailing companies are placing significant
pressure on transit systems, which means reduced fare box collections
and ultimately, reduced service in the communities that need public
transportation the most. In fact, the effect of Uber and Lyft on
transit agencies is so substantial that they may see a nearly 14
percent decline in bus ridership and 10 percent decline in rail
ridership over the next 8 years.\25\
As ride-hailing platforms continue to impact bus and rail service,
hitting America's most vulnerable populations the hardest, they have
shown a shocking disregard for those with ADA needs. Lyft went so far
as to claim it is ``not in the transportation business'' after a
federal class-action lawsuit brought against the company exposed its
utter disinterest in providing accessible vehicles.\26\ Like driver
misclassification, this effort to establish a double standard is part
of a pattern we see time and again with ride-hailing platforms. They
want to play by their own set of rules in order to gain unfair
advantages and keep costs down as they search for a path to
profitability--a path that is simply not there without help from
taxpayer dollars. Again, lawmakers and public transportation agencies
must see these companies for what they are: private companies with
multi-billion dollar cash burn rates in search of special treatment
under federal and state regulations and federal subsidies.
Sidestepping safety
TTD also has serious concerns about ride-hailing companies' history
of sidestepping safety regulations, which has already put passengers,
drivers, and road users at serious risk.
First, while Uber and Lyft finally limited the consecutive hours
their drivers can operate on their platform in one day, these drivers
frequently work across multiple platforms including Uber, Lyft, Via,
Grubhub, Uber Eats, and others. Many of these drivers rely on the ride-
hailing apps as their primary source of income, and work backbreaking
hours just to make minimum wage. The results are driver fatigue and
health complications, both serious threats to road-user safety.\27\
Even with limits to hours of service, companies like Uber and Lyft
squeeze their employees to work longer hours if they want to receive
the bonuses and incentives that help them earn something close to a
living wage.\28\
Shocking reports of sexual assaults, inadequate background checks,
and ride-hailing companies covering up wrongdoing should also give
policymakers pause when considering whether to reward these companies
with federal funding.
A recent investigation, for example, found that Uber coaches
investigators to put the company's interest ahead of passenger safety.
In one case, a driver was accused of making sexual advances to riders
three times before an investigator was assigned to their case.\29\
Other horrifying stories show that Uber and Lyft's background check
systems have been routinely insufficient, allowing convicted murderers
and sex offenders to drive for their services.\30\
Finally, while transit operators are subject to drug and alcohol
testing and a number of medical qualification standards, no such
requirements exist for drivers on ride-hailing platforms. Countless
stories have revealed incidents involving drivers reported or arrested
for driving under the influence. Shockingly, one report exposed Uber
for not investigating many incidents, for which it was fined over $1
million.\31\
The current behavior of these companies is unacceptable to the
American people and should be scrutinized by lawmakers as we seek ways
to expand access to transportation.
Conclusion
Ride-hailing has undoubtedly become popular with American
commuters; but it in no way serves the same goals as public
transportation. Rather, this industry serves a handful of wealthy
Americans while seeking to undercut public transportation for those who
rely on it the most. It does so by creating unfair competitive
advantages in the marketplace: paying less than minimum wage, defining
its own regulatory structure, and sidelining safety in the name of
profit.
TTD welcomes the opportunity to work with any partner that
advocates for better and more public transportation services. However,
public transportation agencies and lawmakers must consider the
exploitative and dangerous behavior of the ride-hailing industry and
their unsustainable business model when weighing how to spend limited
federal transportation dollars.
endnotes
\1\ Jiang, Jingjing. ``More Americans Are Using Ride-Hailing Apps''.
Pew Research Center, 2019, https://www.pewresearch.org/fact-tank/2019/
01/04/more-americans-are-using-ride-hailing-apps/.
\2\ Smith, Rebecca. ``Uber State Interference: How TNC's Buy, Bully,
And Bamboozle Their Way To Deregulation--National Employment Law
Project''. National Employment Law Project, 2018, https://www.nelp.org/
publication/uber-state-interference/.
\3\ Goldstein, Scott. ``Transportation For America--Uber And Lyft Fight
Local Control Over City Streets In Oregon''. T4america, 2019, http://
t4america.org/2019/03/15/uber-and-lyft-fight-local-control-over-city-
streets-in-oregon/; Borkholder, Joy et al. Uber State Interference: How
Transportation Network Companies Buy, Bully, And Bamboozle Their Way To
Deregulation. National Employment Law Project, 2018, https://
www.forworkingfamilies.org/sites/default/files/publications/
Uber%20State%20
Interference%20Jan%202018.pdf/; ``Uber Shares Tumble As Profit Figures
Disappoint''. BBC News, 2019, https://www.bbc.com/news/business-
49287489; McBride, Stephen. ``Uber's Nightmare Has Just Begun''.
Forbes, 2019, https://www.forbes.com/sites/stephenmcbride1/2019/09/04/
ubers-nightmare-has-just-started/#6f703d4cb7e0; Sherman, Len. ``Why
Can't Uber Make Money?''. Forbes, 2017, https://www.forbes.com/sites/
lensherman/2017/12/14/why-cant-uber-make-money/#4318ee3210ec.
\4\ Marshall, Aarian. ``A Bet On Uber Is A Bet On Self-Driving''.
Wired, 2019, https://www.wired.com/story/bet-uber-bet-self-driving/.
\5\ Geman, Ben. ``Uber's IPO Shows It Views Mass Transit As A
Competitor''. Axios, 2019, https://www.axios.com/uber-ipo-mass-transit-
competition-db5b2876-a1dd-4e52-9693-3771891e835b.html.
\6\ Smart City Challenge. United States Department Of Transportation,
2016, https://www.transportation.gov/sites/dot.gov/files/docs/
Smart%20City%20Challenge
%20Overview.pdf.
\7\ ``Mobility On Demand (MOD) Sandbox Program''. Federal Transit
Administration, 2019, https://www.transit.dot.gov/research-innovation/
mobility-demand-mod-sandbox-program.
\8\ ``Examining The Role Of Mobility On Demand (MOD) In Surface
Transportation Policy''. The House Committee on Transportation and
Infrastructure, 2019, https://transportation.house.gov/committee-
activity/hearings/the-subcommittee-on-highways-and-transit-roundtable-
on_--examining-the-role-of-mobility-on-demand-mod-in-surface-
transportation-policy.
\9\ ``TTD Urges Federal Transit Administration Not To Include Private
Ride-Hailing Companies In Definition Of Transit''. TTD, 2019, https://
ttd.org/policy/ttd-urges-federal-transit-administration-not-to-include-
private-ride-hailing-companies-in-definition-of-transit/.
\10\ Sammon, Alexander. ``When Cities Turn To Uber, Instead Of Buses
And Trains''. The American Prospect, 2019, https://prospect.org/
article/when-cities-turn-uber-instead-buses-and-trains.
\11\ ``Bus Drivers, Transit And Intercity''. Bureau Of Labor
Statistics, 2019, https://www.bls.gov/oes/2017/may/oes533021.htm#(1).
\12\ ``ATU Setting The Standard For Transit Apprenticeships''.
Amalgamated Transit Union, https://www.atu.org/media/intransit/atu-
setting-the-standard-for-transit-apprenticeships/atu-setting-the-
standard-for-transit-apprenticeships.
\13\ Siddiqui, Faiz. ``Uber And Lyft Slashed Wages. Now California
Drivers Are Protesting Their Ipos''. Washington Post, 2019, https://
www.washingtonpost.com/technology/2019/03/26/uber-lyft-slashed-wages-
now-california-drivers-are-protesting-their-ipos/. Accessed 8 Oct 2019;
Laughlin, Jason, and Juliana Feliciano Reyes. `` `Working Harder And
Getting Less': Good Old Days Of Ride-Sharing Are Gone, Philly Drivers
Say''. Philadelphia Inquirer, 2019, https://www.inquirer.com/news/uber-
lyft-rideshare-drivers-philadelphia-pay-cut-ipo-public-stock-strike-
20190410.html; Brustein, Joshua, and Josh Eidelson. ``Uber Warns In IPO
Filing That Its Drivers Will Be Even Less Happy''. Bloomberg, 2019,
https://www.bloomberg.com/news/articles/2019-04-12/uber-ipo-filing-
warns-that-drivers-will-be-even-less-happy.
\14\ Mishel, Lawrence. ``Uber And The Labor Market: Uber Drivers'
Compensation, Wages, And The Scale Of Uber And The Gig Economy''.
Economic Policy Institute, 2018, https://www.epi.org/publication/uber-
and-the-labor-market-uber-drivers-compensation-wages-and-the-scale-of-
uber-and-the-gig-economy/.
\15\ ``AB-5 Worker Status: Employees And Independent Contractors''.
California State Legislature, 2019, https://leginfo.legislature.ca.gov/
faces/billNavClient.xhtml?bill_
id=201920200AB5.
\16\ Ghaffary, Shirin. ``Uber's Baffling Claim That Its Drivers Aren't
Core To Its Business, Explained''. Vox, 2019, https://www.vox.com/
recode/2019/9/16/20868916/uber-ab5-argument-legal-experts-california;
Rodriguez, Salvador. ``Uber And Lyft Pledge $60 Million To Ballot
Measure In Fight To Keep Drivers' Classification As Contractors''.
CNBC, 2019, https://www.cnbc.com/2019/08/29/uber-and-lyft-pledge-60-
million-to-fight-california-ballot-measure.html.
\17\ McFarland, Matt. ``Uber Wants To Compete With Public Transit.
These Experts Are Horrified.''. CNN, 2019, https://www.cnn.com/2019/04/
25/tech/uber-public-transportation/index.html.
\18\ Greenawalt, Andrei. ``Convenient, Affordable, Sustainable And
Accessible Shared Mobility''. Auto Alliance, 2019, https://
autoalliance.org/wp-content/uploads/2019/09/Via_accessibility.pdf.
\19\ Schaller, Bruce. The New Automobility: Lyft, Uber And The Future
Of American Cities. 2018, http://www.schallerconsult.com/rideservices/
automobility.pdf.
\20\ Ibid.
\21\ Clewlow, Regina. ``New Research On How Ride-Hailing Impact Travel
Behavior''. UC Davis, https://steps.ucdavis.edu/new-research-ride-
hailing-impacts-travel-behavior/.
\22\ Bliss, Laura. ``The Ride-Hailing Industry Isn't Green Yet''.
Citylab, 2018, https://www.citylab.com/transportation/2018/04/how-uber-
and-lyft-could-do-better-by-the-planet/558866/.
\23\ Young, Mischa, and Steven Farber. ``The Who, Why, And When Of Uber
And Other Ride-Hailing Trips: An Examination Of A Large Sample
Household Travel Survey''. Transportation Research Part A: Policy And
Practice, 2019, https://www.sciencedirect.com/science/article/pii/
S096585641830764X.
\24\ Schwieterman, Joseph and Mallory Livingston. ``Uber Economics:
Evaluating the Monetary and Nonmonetary Tradeoffs of TNC and Transit
Service in Chicago, Illinois''. Chaddick Institute Policy Series, 2018,
https://las.depaul.edu/centers-and-institutes/chaddick-institute-for-
metropolitan-development/research-and-publications/Documents/
Uber%20Economics_Live.pdf.
\25\ Bliss, Laura. ``Uber And Lyft Slashed U.S. Bus Ridership By 12%,
Study Says''. Citylab, 2019, https://www.citylab.com/transportation/
2019/01/uber-lyft-ride-hailing-impact-public-transit-ridership/581062/.
\26\ Locker, Melissa. ``Lyft's Response To ADA Lawsuit: Sorry, We're
``Not In The Transportation Business'' ''. Fast Company, 2019, https://
www.fastcompany.com/90343921/lyft-claims-its-not-a-transportation-
company-to-avoid-ada-compliance.
\27\ Crist, Carolyn. ``Fatigue A Major Risk In Ridesharing Industry''.
Reuters, 2018, https://www.reuters.com/article/us-health-ridesharing-
drowsy-driving/fatigue-a-major-risk-in-ridesharing-industry-
idUSKBN1HW2QE.
\28\ Rosenblat, Alex. ``Slate's Use Of Your Data''. Slate Magazine,
2018, https://slate.com/technology/2018/03/uber-may-have-imposed-12-
hour-driving-limits-but-its-still-pushing-drivers-in-other-troubling-
ways.html.
\29\ Besinger, Wes. ``When Rides Go Wrong: How Uber's Investigations
Unit Works To Limit The Company's Liability''. New York Times, 2019,
https://www.washingtonpost.com/technology/2019/09/25/ubers-
investigations-unit-finds-what-went-wrong-rides-its-never-companys-
fault/.
\30\ Hill, Christian. ``ICYMI: Uber, Lyft Driver Checks Miss Convicted
Murderer, Sex Offender''. The Register-Guard, 2019, https://
www.registerguard.com/news/20190929/icymi-uber-lyft-driver-checks-miss-
convicted-murderer-sex-offender.
\31\ Roberts, Jeff. ``Uber Faces $1.1 Million Fine Over Drunk
Drivers''. Fortune, 2017, https://fortune.com/2017/04/13/uber-drunk-
drivers/.
Letter of July 22, 2019, from the National Conference of State
Legislatures and the American Association of State Highway and
Transportation Officials, Submitted for the Record by Hon. Eleanor
Holmes Norton
July 22, 2019.
Representative Chris Smith,
Member,
United States House of Representatives, 2373 Rayburn House Office
Building, Washington, DC.
Representative Thomas R. Suozzi,
Member,
United States House of Representatives, 214 Cannon House Office
Building, Washington, DC.
RE: H.R. 3262--Sami's Law
Dear Representative Smith and Representative Suozzi,
On behalf of the National Conference of State Legislatures, the
American Association of State Highway and Transportation Officials and
the public officials we represent, we appreciate your efforts to
address an important area of public safety. The stories of Samantha
Josephson and other individuals whose lives were cut too short are
truly heartbreaking.
Our organizations support a continued federal role in helping to
set certain transportation safety goals, and we agree that such
programs should be expanded to incorporate emerging safety issues in
order to promote a comprehensive suite of programs in the states, while
respecting state sovereignty.
However, we strongly oppose the use of federal sanctions or
redirection penalties to enforce federal safety standards. We urge you
to make significant changes to section 2 ``Sanctions for States Without
Transportation Network Company Vehicle Identification Laws,'' which
could result in the loss of billions of dollars in state federal
highway aid every year. One alternative approach could be to
incentivize states to achieve the outcomes sought in section 2 in order
to promote state action on this issue while ensuring and adhering to
principles of federalism.
It is no secret that the United States faces a host of unmet
infrastructure needs. States have worked to address this problem by
raising tens of billions of dollars in new funding over the past half-
decade with nearly 30 states increasing their motor fuels tax rate to
increase revenues for infrastructure. But work still remains. States
work hand in hand with the federal government to ensure a national
surface transportation system that facilitates interstate commerce,
addresses fairly and equally the mobility needs of all Americans, and
meets national defense needs. The potential loss of billions in federal
funding every year would almost assuredly result in a less safe
transportation system, leading to a rise in additional motor vehicle
traffic fatalities, seemingly the opposite goal of your bill.
We would welcome the opportunity to work with you and your staff to
continue to move the conversation forward. Please contact NCSL staff
Ben Husch or AASHTO staff Joung Lee to discuss this matter further.
Sincerely,
Tim Storey,
Executive Director, National
Conference of State
Legislatures.
Jim Tymon
Executive Director, American
Association of State
Highway and
Transportation
Officials.
Statement of Gary Buffo, President, National Limousine Association,
Submitted for the Record by Hon. Peter A. DeFazio
Chairwoman Norton, Ranking Member Davis, and distinguished members
of the Subcommittee, thank you for the opportunity to comment on the
future of TNC's. My name is Gary Buffo, President of the National
Limousine Association (``NLA''). The NLA is the trade association
dedicated to representing and furthering the worldwide, national, state
and local interests of the chauffeured ground transportation industry.
Our membership includes owners and operators of shuttles, sedans,
buses, and limousines as well as the associated suppliers,
manufacturers, and regional and state associations. NLA owners are
primarily small businesses--69% operate 1-10 vehicles and 96% operate
fewer than 50 vehicles. Working together, NLA members continue to
redefine and improve the industry every day.
As leaders in the industry, NLA members put our drivers and
passengers first, advocating for strong worker protections and safety
measures. We are deeply concerned with the negative impacts TNC
business practices have on public safety and on their drivers. As TNC's
have grown in size, they have been unwilling to self-regulate and
follow industry best practices. It is beyond time for Congress to step
in and ensure the future of TNC's includes stronger protections for
drivers and safety guarantees for passengers.
Our members are devoted to the driver Duty of Care and our
Passenger Bill of Rights, which ensure that our passengers are provided
the safest, highest quality service possible. We take these duties
seriously, and believe that TNC's like Uber and Lyft have failed in
their responsibility to those who drive their vehicles and patronize
their service--to the detriment of their drivers, the public, and the
broader transportation industry.
Safety Issues
For too long, TNC's have allowed unvetted drivers onto our roads,
and Congress must act now to ensure TNC safety. We are starting to see
progress. NLA is pleased that Congress is now taking action and NLA
strongly supports Sami's Law, introduced by Rep. Chris Smith, Senator
Ben Cardin and a bipartisan, bicameral group of cosponsors. As an
industry, we hold ourselves to the highest standards and are deeply
concerned by unsafe actors in ground transportation. Sami's Law is a
strong step in the right direction.
As you are well aware, the lack of regulation and oversight of TNC
safety places our communities at risk, and there have been far too many
tragedies related to TNC's for Congress to remain silent. Sami's Law
takes several definitive steps to increase passenger safety and
involves state Departments of Transportation who have proven oversight
capability. The bill would help prevent future tragedies involving
criminals posing as TNC drivers and improve confidence for passengers
that they will make it home safely wherever they may be in the country.
In addition to the identification requirements and regulation by
State DOTs, we applaud Sami's Law for commissioning a GAO study on the
potential effectiveness of fingerprint background checks in reducing
the prevalence of assault and abuse perpetuated by TNC drivers on
passengers. A study will quantify and shed light on the scope of the
problem, which has not been studied closely despite pervasive evidence.
We hope this study will be a first step towards implementing stronger
background check requirements for TNC drivers. The current lack of any
real verification that Uber and Lyft drivers are safe is simply
unacceptable. NLA members conduct thorough, fingerprint background
checks on all of our drivers. It is simply too risky to entrust
unvetted individuals with the safety of passengers in what is clearly
commercial passenger transportation. We urge Congress to ensure TNC
passengers are afforded this same level of protection.
Commercial Insurance
One of the many ways the TNC companies increase risk to both their
drivers and their passengers is that they do not require commercial
liability insurance on the vehicles that transport their customers.
It's fairly common in our industry that companies carry $1.5 million in
commercial liability insurance on EVERY vehicle in their fleets to
protect both our drivers and our passengers. NLA strongly encourages
the committee should require commercial liability insurance on all TNC
vehicles, just like it's required in other modes of commercial
passenger transportation. Personal auto insurance may not cover a claim
for a for-hire transportation event. While there is a business-use
exception that permits an employee to use their own vehicle for
business use while enjoying coverage, this expressly excludes vehicles
that are themselves the business. If a driver is seeking passengers,
waiting for a passenger, or returning from a trip, most personal auto
insurance carriers will not cover an accident. This gap in coverage
passes significant risk onto the public, with thousands of under-
insured vehicles on the road. These for-hire vehicles operate in
interstate commerce, and congress should require these commercial
vehicles to carry commercial insurance, just like the rest of the
ground transportation industry.
Worker Misclassification
By far the most egregious abuse on workers committed by the TNC
Companies is worker misclassification. TNC's like Uber and Lyft have
established a clear employer-employee relationship with their drivers,
yet refuse to classify them as such. As an industry, NLA members have
evolved over time from primarily a contractor-based model to the
employee model we use today. As a result, our members see less employee
turnover, while their employees are happier and provide a better
service to our customers. We are proud to pay our employees well and
provide them with benefits they deserve. TNC's have exercised employer
control over their drivers in a variety of ways, including:
Company handbooks that dictate dress code, use of car
stereo, maintenance of an umbrella, etc.
Publishing ``Rules of the Road,'' dictating specifics
about how to perform work
Retaining the right to terminate the services of the
driver
Dictating where to park or wait for the highest traffic
levels
Retaining disciplinary powers.
Dictating standards of maintenance, condition, and
cleanliness of the vehicle, use of GPS, and smoking
For years, NLA members have advocated for stronger protections
against TNC worker misclassification. We are pleased that state courts
have found in favor of workers, and that large states like California
have begun to take action. In April 2018, the California Supreme Court
established a three-part test for determining contractor status:
The worker is free from the control and direction of the
hirer in connection with the performance of the work, both under the
contract for the performance of such work and in fact;
The worker performs work that is outside the usual course
of the hiring entity's business; and
The worker is customarily engaged in an independently
established trade, occupation, or business of the same nature as the
work performed for the hiring entity.
In September 2019, the California state legislature passed and
Governor Newsom signed into law AB 5, which enshrines the three-part
test into law. By doing so, California will ensure drivers will have
access to overtime, minimum wage, sick leave, family and medical leave,
and unemployment insurance they are currently denied. We strongly urge
congress to pass federal legislation that guarantees such benefits to
all drivers, regardless of where they operate.
Mr. Chairman, Ranking Member and members of the Committee, the NLA
is extremely thankful that you are conducting this hearing. It's
certainly your purview to properly review and regulate commercial
passenger transportation and we look forward to working with you to
update the transportation laws and address the range of abuses of TNC
companies. The mere fact that the TNC companies won't even bother to
show up to a hearing about their own industry is proof that they
operate in blatant disregard for Congressional Authority and the laws
of our land. We urge you to do your work to address that fact. Thank
you.
Appendix
----------
Questions from Hon. Peter A. DeFazio to Hon. Karen Freeman-Wilson,
Mayor, City of Gary, Indiana, and President, National League of Cities
Question 1. On December 6, Uber released long-awaited safety data
in its ``US Safety Report.'' \1\ Among other findings, Uber reports
receiving roughly 6,000 reports of sexual abuse to varying degrees
between 2017 and 2018.
---------------------------------------------------------------------------
\1\ https://www.uber-assets.com/image/upload/v1575580686/Documents/
Safety/UberUSSafetyReport_201718_FullReport.pdf
---------------------------------------------------------------------------
Mayor Freeman-Wilson, what are your initial reactions to Uber's
report and these findings?
Answer. In response to rising concern with safety incidents and
deaths in their vehicles, Uber's U.S. Safety Report [https://www.uber-
assets.com/image/upload/v1575580686/Documents/Safety/
UberUSSafetyReport_201718_FullReport.pdf] offers a small insight into
the national safety challenges that our residents face every day on the
nation's roads. Offering near 4 million trips, Uber must be responsible
for the safety of their customers, and they lay out specific steps to
make safety improvements which is delayed yet encouraging. We must all
commit to riders' safety, and rideshare providers must be part of the
community that takes proactive steps to achieve this. Unfortunately,
the cycle of using public shame to spur Uber's responsible actions is
not new to cities, and we encourage Congress to continue to
appropriately uphold safety practices and encourage cities and states
to use their regulations to ensure safe rides for everyone.
Question 2. Considering that the role of law enforcement largely
falls to local governments, is Uber's safety report useful to cities?
Are there ways to make it more useful?
Answer. Cities have widely recognized that our ability to protect
our residents proactively is through appropriate levels of verification
and registration for drivers providing services in our areas, but both
state overreach and industry objection have limited our ability to do
so in many areas. As Uber's U.S. Safety Report [https://www.uber-
assets.com/image/upload/v1575580686/Documents/Safety/
UberUSSafetyReport_201718_FullReport.pdf] states, ``background check
requirements and other driver eligibility limitations in the US vary
considerably by state and even by city.''
We are encouraged to see that Uber's In-App Emergency Button
connects riders and drivers directly to 911 because it would alert
local enforcement more quickly. Also, they indicate that: ``In some
cities, trip details and location can be shared automatically with
first responders, or riders and drivers can send a text message to
911.'' While helpful for more quickly locating the user, they
acknowledge this feature is not universally available, and these app-
based systems work only if a user: retains control of their phone, is
able to get through security on their phone under duress and is able to
find this feature within the app under duress.
To improve the Uber safety report in the future, we would recommend
more than a static report. We would recommend Uber address the climb in
safety incidents by opening all safety reporting and in-app safety
triggers to local law enforcement as they occur through a protected
database and to make their staff available to review trends with law
enforcement and discuss specific incidents in depth along with possible
preventions. Uber should also accept reasonable local licensing
restrictions for public ridesharing in light of recent concerning
incidents and make fundamental business process updates to meet or
exceed local and state standards. Future reports should address the
outcomes of their meetings with ``law enforcement officials, road
safety organizations, and more than 200 gender-based violence
prevention experts . . . to innovate on new approaches that will raise
the bar on safety in ridesharing.'' We hope to hear specific steps Uber
is taking as a business to heighten standards for drivers through their
learning using corporate processes and training practices.
Questions from Hon. Eleanor Holmes Norton to Hon. Karen Freeman-Wilson,
Mayor, City of Gary, Indiana, and President, National League of Cities
Question 3. Mayor Freeman-Wilson, you describe preemption of local
TNC regulations as creating problematic ``blanket regulations.''
Why do you feel that local governments, rather than States or the
Federal government, are best equipped to set TNC regulations?
Question 3.a. What are some examples of these one-size fits-all
laws?
Answer (3 & 3.a.). Local governments orchestrate most aspects of
public transportation in their areas and are closest to their
residents, equipping them to handle many aspects of rideshare
regulation including appropriate levels of service, limitations or
incentives for pick-up and drop-off, ensuring safe service and incident
response. Each city's ability to intentionally and nimbly manage local
services using a tailored approach remains essential.
Specifically concerning are ride-share companies attempts to
legally differentiate themselves at the state level as a ``technology
company,'' not transportation company, in order to avoid providing
American with Disabilities Act (ADA) accessible vehicles for people who
use wheelchairs or motorized scooters in localized fleets nationwide.
Cities will continue to stand up to provide accessible service and
ensure fair competition among ride providers, whether they use more
technology or less.
State governments are also restricting cities from effectively
managing the TNCs operating on their streets through stifling
preemption. Between 2015 and 2017, thirty-seven states passed
preemptive laws preventing cities from managing TNCs [https://
www.epi.org/preemption-map/]. Many of these laws prevent city
governments from requiring that TNC drivers procure a license to
operate in the city. Licenses allow city officials to keep track of who
is driving in the city, more accurately track safety incidents, and
ensure that city streets don't become oversaturated. Licensing is a
crucial tool for cities when it comes to managing streets and should be
protected.
Some states, such as Nevada and New York, have created carve-outs
to allow cities to impose more stringent requirements on TNCs. Others,
such as Kentucky, impose a state-wide fee on TNCs for licensing [http:/
/leg.wa.gov/JTC/Documents/Final%20Studies/TNC_PolicyGuideFinal.pdf].
While these are steps in the right direction, they still put the
control in the hands of the state rather than with city leaders who
have direct knowledge of what regulations and requirements are needed
to optimize the effectiveness of TNCs and how to best protect their
residents.
Question 4. How can Congress ensure a suitable floor for
regulations on issues such as public safety, mobility, and impacts to
transit while still giving cities the flexibility they need?
Answer. The National League of Cities appreciates Congress' careful
attention to safety regulations among all of the transportation
services under their jurisdiction. Congress might consider using the
history of seatbelt requirements to inform their goals to provide a
regulatory floor, but most significantly Congress could define the
ride-share model as public transit to ensure there is clarity and
certainty of fair play among operators and that cities retain their
existing authority to manage these services and providers at the local
level.
Question from Hon. Steve Cohen to Hon. Karen Freeman-Wilson, Mayor,
City of Gary, Indiana, and President, National League of Cities
Question 5. As mentioned in your testimony, communities are clearly
interested in shared mobility solutions. They are looking for Complete
Streets-type networks that make it possible to walk or bike in the city
they reside. Our transportation network requires multi-modal solutions
with integration across mass transit, buses, cars, scooters and other
forms of transportation.
In your opinion, how is the ride sharing industry fitting into a
21st Century transportation system?
Answer. Cities have embraced the sharing economy and quickly
updated their ordinances to accommodate these new transportation
partners. With increased use of rideshare and scooters, cities are
reimagining their zoning, parking, curb and sidewalk enforcement, and
much more to manage the challenges along with the benefits. However,
most communities are still seeking multi-modal solutions and service
providers that can make sharing economical for their residents. Only
730 cities of our nation's 19,000 communities across the U.S. have
ridesharing so we anticipate growth but also variations in vehicles
shape, size, purpose and more to fit different communities.
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Hon. Karen
Freeman-Wilson, Mayor, City of Gary, Indiana, and President, National
League of Cities
Question 6. As mayor of a legacy city, I know that concerns of
transit access and equity matter a great deal to you. Though the
presence of TNCs has skyrocketed in major metropolitan areas, more
rural and suburban areas haven't seen the same availability of ride-
hailing services.
At this time, do you think these ride-hailing services have helped,
or further exacerbated the issue of transit equity?
Answer. Yes, only 730 cities of our nation's 19,000 communities
across the U.S. have ridesharing, and many cities have been
disappointed when they opened up conversations with new providers but
haven't seen the follow through. Additionally, even where TNCs operate,
there may be offering adequate but not extensive service. For example,
the city of Gary has two TNCs that are readily available, and local
bikeshare is available in our Miller Beach neighborhood for the
recreation on the lakefront. Yet scooters have not been deployed in our
community even after a number of promising conversations with
providers. We also find that the wait for ride share in Gary can be
much longer than other communities. Additionally, in Los Angeles, where
they are offering a subsidy for providers to service new neighborhoods,
they are not finding providers willing to take up their offer to spread
services equitably. The full capability of new mobility is on the rise,
but it is far from reaching all the places that want to see new
services like micromobility and TNCs operating.
Question 7. TNCs often partner with state transit agencies to
provide more connectivity to public transit options, aiding with first
mile and last mile transportation.
Have you seen the success of such collaborations in Gary, Indiana,
and would you recommend these programs be expanded nationwide?
Answer. Collaborations are a city's friend. We are eager to explore
partnerships that work for both parties. The city of Gary facilitated a
private ride share arrangement with UPS that currently allows local
residents to commute to work daily. Arrangements like this are
beneficial to employers and citizens alike, and I can envision more
opportunities involving Uber, Enterprise and other TNOCs. In the next
transportation reauthorization, we welcome a robust conversation on
first-and-last mile as part of the transit programs and expansion of
the technology capabilities that make connecting, riding and getting to
our destination that much easier and better for residents.
Question 8. As we look to reconfigure our nation's infrastructure
network, we are remiss if we don't consider the growing issue of
congestion. TNCs do threaten our ability to remedy the issue.
How should the role of TNCs in our transit network change, if at
all, so we can tackle congestion?
Answer. Regional transportation planning is essential to improve
service and reduce congestion, and local governments will continue to
lead the way in embracing the best of the new services while managing
the externalities being created. Regional planning benefits from being
goal-centered and encouraging cross-boundary collaboration. Congress
can also move actively to reduce congestion by ramping up investments
that increase mobility and decrease congestion including sharing,
multi-person transit of all forms, and regional congestion pricing as
seen in Stockholm. All programs that have performance measures can be
assessed for throughout and other mobility factors.
City leaders welcome Congress' shared investment in advanced
technologies that can improve safety, reduce congestion and decrease
costs within the transportation networks. It should be a federal policy
to accelerate the testing, deployment and integration of advanced
transportation technologies in partnership with cities. The federal
government should consider ramping up research and development while
increasing local pilots and demonstration projects of new technologies
through federally-financed programs to provide the data needed for
effective research and testing.
Question 9. What about at the federal, state, and local levels?
What role can these entities play in working with TNCs to mitigate
congestion?
Answer. The federal government is best positioned to provide
incentives, common technology standards and policies to address and
mitigate congestion while states can provide highway management and
statewide strategy and funding. At the local area, locals will continue
to use customized strategies of incentives, technology enhanced choices
and better service options to untangle traffic knots.
The most compelling strategy for potential federal policy change is
related to regional congestion pricing models as seen in Stockholm.
Transportation pricing provides local communities with an opportunity
to better and more equitably manage their transportation network, while
generating revenue that can be reinvested to support their local,
multi-modal transportation systems. This should include the operation
and maintenance of roadways, parallel roadways, and transit, biking,
and walking infrastructure for those that want to avoid the cost or do
not drive. Under current law, pricing programs can be approved by the
U.S. Department of Transportation (USDOT) on a discretionary basis
through the Value Pricing Pilot Program. The program has a limited
number of slots, and the use of toll revenue from any congestion
management program is restricted to use on highways (23 USC Sec. 129).
This limits the ability of local communities, that would seek to
implement pricing, to allocate revenues to other more sustainable
mobility options which move people in a more efficient manner than
single-occupancy vehicles, such as biking, walking, and transit.
Tolling to capture revenue is a one-trick pony, but regional
reinvestment pricing models offer a fresh and innovative approach to
reduce congestion and improve service.
Questions from Hon. Mike Gallagher to Hon. Karen Freeman-Wilson, Mayor,
City of Gary, Indiana, and President, National League of Cities
Question 10. In Wisconsin, we have seen that as TNC rides increase,
DUIs decrease. From 2015-2018, Madison, Wisconsin saw a 20% decrease in
DUI incidents since Lyft began operating in the city.
Have you seen a similar trend in Gary, Indiana?
Answer. Cities strongly believe that data and comparisons among
areas are incredibly valuable tools, and public operations should offer
insights on how to improve and respond to trends. While Gary is likely
not a comparable city in TNC service to Madison and these may not be
linked trends, we know that with good data a city like Madison will be
more prepared to make their next move and keep residents safe.
Question 11. According to a survey of Lyft drivers in Wisconsin,
34% of riders spend more at local businesses as a result of using TNCs;
47% of riders explore more areas of their city as a result of TNCs; and
38% of riders are more likely to attend community events as a result of
TNCs.
Do you see a similar trend in Gary, Indiana?
Answer. We have not seen this trend in Gary, but the availability
of multiple modes of transportation certainly has the ability to
enhance mobility for residents for all of their needs.
Question 12. In your testimony, you mentioned the introduction of
scooters which began last year. I have used scooters here in
Washington, DC, but never in one of the small towns back in Wisconsin.
In your position as Mayor, do you see scooters as a net positive or
a net negative for your City?
Answer. Gary is not using scooters widely yet, but we're seeing new
transportation options for residents as a great step forward. It's
clear from ridesharing and scooter growth that there was a need for
more point-to-point service and while we must take the bad with the
good, most cities report back favorably on new options moving to their
hometowns. However, government has to have a responsible relationship
with operators in their city, and we cannot and will not be able to
Question 13. Much of the discussion and witness testimony about
TNCs has focused on major urban centers. But in a smaller city like
Green Bay or Appleton, we don't have a lot of transit options.
What effects does the National League of Cities think that TNCs
have had on rural communities?
Answer. Cities are optimists--we believe that while we may not see
these new transportation entrants everywhere today, there is a shift in
thinking and an interest from various providers and entrepreneurs to
create the right solutions that can serve a large customer base outside
the urban and suburban core. Small services providers like Tupelo
Transit in Mississippi are using point-to-point transit service and
mobile apps to improve service and reliability which is a jump forward
for residents. Additionally, more than a dozen transit providers have
explored shared service with TNCs to mixed success, but through testing
and tinkering, new models are being vetted. However, Congress may be
able to incentivize that shift faster to rural areas by ensuring that
more funding is available to transit providers and regions to test new
ideas and bring models that work for smaller places.
Questions from Hon. Peter A. DeFazio to Paul A. Miller, Legislative
Counsel, The Transportation Alliance
Question 1. On December 6, Uber released long-awaited safety data
in its ``US Safety Report.'' \1\ Among other findings, Uber received
nearly 6,000 reports of sexual abuse to varying degrees between 2017
and 2018.
---------------------------------------------------------------------------
\1\ https://www.uber-assets.com/image/upload/v1575580686/Documents/
Safety/UberUSSafetyReport_201718_FullReport.pdf
---------------------------------------------------------------------------
Mr. Miller, what are your initial reactions to Uber's report and
these findings?
Answer. Sadly, I'm not surprised. During my testimony I said the
number of assaults reported in the press were just a fraction of what
we believed the real number to be. In fact, if you read through Uber's
own report, they admit that the number could be higher. They also
didn't count various types of assaults in their reporting. We believe
the number to be even higher than the 6,000.
Leaked information points to this being just the tip of the iceberg
in terms of actual cases. A leaked internal Uber memo says that an
internal team at Uber tasked to track incidents were ``overworked,
underpaid, and at times emotionally traumatized as they struggled under
the burden of nearly 1,200 cases every week.'' \2\ How can we be sure
they captured or were even able to keep up with the number of reports?
Based on statistics on sexual assaults, roughly 3 out of every 4 sexual
assaults go unreported based on study by RAINN in 2016.\3\ Based on
these numbers, the number of unreported cases of sexual assault are in
all likelihood much higher than Uber reports.
---------------------------------------------------------------------------
\2\ https://www.cnn.com/2019/01/21/tech/uber-investigations-unit-
report/index.html
\3\ https://www.rainn.org/statistics/criminal-justice-system
---------------------------------------------------------------------------
During my testimony, I said the number of assaults on passengers is
an epidemic. The data reported by RAINN supports this assertion, as do
Uber's own numbers which is why we urge you and the Committee to
request the General Services Administration (GSA) require all private
sector companies and/or drivers receiving federal grants or
participating in any federal contracts to transport passengers be
required to pass a national FBI fingerprint-based background check.
Public citizens have choices in choosing the safest transportation.
Under GSA's plan, government employees would not. They would be
required to use contracted TNCs. We urge the Committee to not let
government employees become easy targets for drivers who have not been
properly vetted.
Question 2. Is Uber's safety report useful? Are there ways to make
it more useful?
Answer. It's useful in the sense that instead of relying on those
accounts reported in the press, we see that the problem is so much
greater than publicly reported. We still don't know the real number
because of how Uber reported its findings. Since Uber deliberately did
not include reported figures on a host of sexual misconduct incidents
(from drivers exposing themselves to open solicitations for sex, for
example) Uber doesn't fully address the problem of safety in its
report.
It seems as if Uber is trying to justify these horrific numbers by
including the statistic of how many people are sexually assaulted in
this country on an annual basis. Sexual assault in our country is
absolutely a problem, but that is not the issue here. The issue here is
how many incidents of assault there have been against passengers by
their drivers. Uber spent 84 pages talking about how detailed and
accurate their procedures are for protecting passengers, yet these so-
called safety procedures have not proven to be effective based on the
more than 6,000 assault complaints filed with the company.
The only way to make this report useful is for Uber to simply
acknowledge their current policies have not been effective. Instead of
fighting industry standards, it should join in it by supporting
fingerprint background checks for drivers.
Question 3. As you may have seen, the Committee sent both Uber and
Lyft written questions after they declined our invitation to testify at
our hearing. One question we asked them was whether they support local
authorities tracking incidents on hailed rides in order to provide law
enforcement with better data to inform their public safety strategies.
In turn, both companies touted their ``robust processes'' for
collaborating with law enforcement.
Do you believe TNCs are engaging with law enforcement as much as
they should be?
Answer. No. If Uber really had a ``robust'' process for combatting
passenger assaults, it would not have 6,000 or more incidents on file
by passengers. Uber's track record has been to fight any effort in
cities when confronted with these issues. Uber's constant refrain is
that its third-party background checks are safe, yet their own report
indicates otherwise. The study we cite in our original testimony, One
Standard For All, points out that fingerprint background checks are 43
times more effective than third-party background checks. These numbers
come from law enforcement. Uber's own SEC filing, before the company
went public, acknowledges that they know there have been complaints
about their third-party background checks being inadequate. Uber
further admits that requiring fingerprint background checks would mean
it cannot flood the streets with as many cars as possible, in an effort
to capture greater market share. Safety isn't Uber's priority: market
share is. In this same SEC filing, the company that performs Uber's
third-party checks admits their processes do not expose all potentially
relevant information and are limited to certain jurisdictions according
to national and state laws.
The fact that Uber declined your invitation to appear before the
Committee should tell you they know they are not doing enough. If they
were, they should have been able to come before your Committee and
provide detailed answers to questions on this topic. If they have
``robust processes'' in place to protect passengers, they should come
to the Committee and defend themselves. We accepted your invitation
because we know there is a problem and we want to work with the
Committee on a commonsense solution. It is in our industry's best long-
term viability to create policies that put passenger safety above
market share.
Question 4. Are TNCs held to the same standard in cooperating with
law enforcement that other transportation services are?
Answer. No. When a taxi driver is involved in an incident of the
magnitude of sexual assault, that driver's license will be flagged by a
relevant regulatory authority. The taxi company will be notified that
the driver is suspended. The taxi company will not jeopardize its own
license to allow that one driver back on the road. It's also important
to note that the driver would then not be allowed to drive for any
other taxi fleet. This is different from Uber and Lyft where, in well
documented cases, drivers have been deactivated from one platform, only
to then find work immediately on another rideshare platform. In one
case, a Lyft driver was deactivated for an altercation with a local
attorney, and then began driving for Uber. Days later, that same driver
kicked a taxi driver to death in Chicago.\4\
---------------------------------------------------------------------------
\4\ https://www.businessinsider.com/lyft-deactivated-driver-who-
later-killed-man-working-for-uber-2019-7
Question 5. On a related note, Uber questioned the Transportation
Alliance's (TTA's) criticism of their name-based background check
system. Specifically, they called into question TTA's assertion that
``name-based background checks are 43 times more likely to have errors
than fingerprint-based checks.'' \5\
---------------------------------------------------------------------------
\5\ Professor Matthew W. Daus, Esq. & Professor Pasqualino ``Pat''
Russo, Esq., One Standard for All: Criminal Background Checks for
Taxicab, For-Hire, and Transportation Network Company (TNC) Drivers
(2015), http://www.utrc2.org/sites/default/files/pubs/
Background%20Check%20Report.pdf.
---------------------------------------------------------------------------
Do you have a response?
Answer. Yes, this is not a number we came up with. This comes from
a study, One Standard For All, which we confirmed with the authors,
that stated the figure of 43 times comes directly from law enforcement
officials. In Uber's own SEC filing, their own background check company
acknowledges their process is limited.
Question 6. The Committee also asked Uber and Lyft about their
third-party background checks.
What do typical taxi and limo company background checks cover?
Answer. Taxicabs are typically licensed at the municipal level of
government. Since it is the city that establishes the standards for
taxicab drivers, regulations vary from jurisdiction to jurisdiction. In
general, however, it is the city that reviews each taxi driver's
criminal background check and determines if the driver should be
granted a license to transport the public. And it is the city that will
review an appeal to a rejected application. Many mid- to large-sized
cities require drivers to submit their fingerprints for a national
criminal background check of the FBI's database. Based on the
applicant's criminal history, the city will determine if the applicant
should be denied based on convictions for violent crimes such as rape,
murder, kidnapping, etc. Limousines are typically licensed at the state
level of government, with each state setting its own background check
requirement.
Question 7. What specifically is not included in a fingerprint-
based check that would otherwise be covered in Uber or Lyft's third-
party check?
Answer. Fingerprint background checks don't lie, whereas third-
party checks can be cheated. For instance, with a third-party check,
the driver fills out the information on a computer. Anyone could be
filling out the information.\6\ You cannot verify the online applicant
is the real driver. Second, there are news articles that have detailed
cases in which Uber's own drivers tell others how to avoid any
background check by using someone else's account.\7\ Finally, Uber's
and Lyft's background checks are limited in scope. Uber's background
checks do not look at a person's full history. They only go back seven
years and cover only certain jurisdictions. Uber's own background check
company admitted in Uber's SEC filing that there are gaps in their
checks versus a fingerprint background check.
---------------------------------------------------------------------------
\6\ https://www.cnet.com/news/uber-drivers-using-fake-identities-
isnt-just-a-london-problem/
\7\ http://valleywag.gawker.com/uber-driver-heres-how-we-get-
around-background-checks-1596982249
Question 8. TNCs consider themselves to be a technology company,
not a transportation provider. As such, the TNC regulatory framework is
relatively novel and does not regulate TNCs with as firm a hand as it
does traditional transportation providers.
Are TNCs held to the same safety standards as other forms of
transportation?
Answer. First, it is a myth for TNC's to claim to be technology
companies. This was done to try and avoid all liability if there were
accidents or criminal activity by the drivers. Traditional taxis have
been using technology and apps before Uber and Lyft existed and we have
never been called technology companies. The only difference between the
technology used by Uber and Lyft and many traditional taxis is our apps
are mostly local and their app is national. Even Uber CEO Dara
Khosrowshahi has stated plainly in a media interview a few months ago
that his company is ``much more than just the ride share company now,
it is a transportation company.'' \8\
---------------------------------------------------------------------------
\8\ https://www.cnbc.com/2019/08/09/uber-ceo-khosrowshahi-talks-to-
cnbc-after-q2-earnings-full-transcript.html
---------------------------------------------------------------------------
Second, Uber and Lyft have nowhere near the inspection of vehicle
requirements like there are with traditional taxis. If there were,
every Uber and Lyft vehicle would have to be examined by a mechanic,
including an ``under-the-hood'' inspection.
Third, insurance has always been an enormous safety question. In
its early years, Uber urged drivers to use their own personal
insurance. The problem with this was that personal insurance policies
state very clearly that a personal vehicle cannot be used for
commercial purposes. The insurance has evolved to include ``app on/app
off'' coverage, meaning that there is insurance that will cover you for
when you have the app on and transporting a passenger. The problem here
is how would you know when a driver has the app on or off? What if the
driver is driving for both Uber and Lyft? Do both companies share in
the liability if the driver is in an accident? There have been lots of
questions around the insurance issue. You don't have those same types
of questions and concerns with traditional taxis. Our industry carries
full insurance, every minute of every day, which roughly 10 times the
cost of what TNCs pay (annual insurance for a taxicab, for example, is
typically over $5,000). In a taxicab, passengers are protected under
our policies whereas there have been numerous questions whether
passengers are really fully covered under TNC insurance. The fact is,
even fulltime TNCs pay a fraction of what traditional taxis do for
insurance coverage, even though we provide the same services to
passengers.
Question 9. What safety standards should regulators apply to TNCs?
How does this vary between the local and Federal level?
Answer. We believe that TNC drivers should undergo a national
fingerprint-based background check. These fingerprint background checks
are kept on file with the National Crime Information Center (NCIC), so
if a driver is arrested, there can be an automatic announcement of the
arrest. Second, TNC vehicles should carry commercial auto liability
insurance, and that TNC vehicles should be subject to initial and
recurring inspections. We believe regulations are best carried out at
the local or state level. However, we also believe strongly that the
Federal government should not allow any company to secure federal
passenger transportation contracts unless the drivers pass a
fingerprint-based national criminal background check.
Question 10. Uber and Lyft's review process of reported incidents
is largely internal and not directly collaborative with law
enforcement.
Are TNCs' largely internal review processes akin to industry safety
standards?
Answer. Absolutely not. When there is an incident involving a
driver affiliated with one of our member fleets, the city and/or state
regulators become involved. By contrast, TNCs are virtually left to
monitor themselves. As we have now learned, each and every day eight
more people (mostly women) using Uber will be sexually assaulted,
heinous crimes that include rape. Self-regulation of public safety
matters has proved to be a very dangerous policy for TNCs, with very
real and unfortunate consequences for their passengers.
Question 11. Would TNCs be obligated to have different internal
review standards if they operated as a transportation provider and not
a technology company utilizing independent contractors?
Answer. This would only work if TNC's and taxis were viewed by all
local and/or state jurisdictions in the same manner. There is a federal
definition of TNC, which does include most traditional taxis. If all
jurisdictions at the state or local level classified us all this way,
then yes, they would be held to the same standards as traditional taxis
are today. It's simply a myth to view Uber as a technology company. If
Uber and Lyft are to be deemed technology companies, then the same
applies for taxis, since we use the same technology (apps). Our member
fleets have been using app-based technology to connect passengers with
vehicles even before Uber or Lyft existed, yet our fleets have never
claimed to be tech companies. Simply put, we--taxis, limos, Uber, Lyft
and anyone supplying drivers to transport passengers for a fee--are all
for-hire passenger transportation companies. As noted above (see
footnote #8), Uber's own CEO has bluntly stated that his company is a
transportation company.
Question from Hon. Eleanor Holmes Norton to Paul A. Miller, Legislative
Counsel, The Transportation Alliance
Question 12. The Committee asked Uber and Lyft why they are opposed
to fingerprint background checks. Each company referenced concerns that
fingerprint-based background check databases are ineffective and may be
discriminatory.
How would you address these two concerns?
Answer. This is a myth. Today's fingerprint background checks are
quick, taking 48 hours to complete. If a person has a questionable
record in their past that emerges through this process, they are not
automatically prohibited from driving. For drivers receiving a license
from a city or state (taxicab, limousine, etc.), it just means that
there is a secondary process of review that looks at each incident
cited in the background check, and the driver always has the ability to
appeal a decision to withhold the license.
In its own safety report released in December 2019, Uber claims it
rejected 76% of those who applied for background checks between 2017-
2018. Those drivers rejected by Uber don't have the right to appeal
their rejection to an impartial government agency for a more detailed
review. Therefore, on the one hand, how can one say fingerprint
background checks with an appeal to an impartial government agency are
discriminatory and yet third-party checks with no appeal are not? In
the vetting process that governs the vast majority of our members'
fleets, there are clear legal and administrative means of appealing a
decision on suitability afforded to drivers. For Uber's and Lyft's
driver check, there is no independent review available to drivers.
Uber and Lyft have used the discrimination card from the beginning
because they know there is an audience that will be sympathetic to
their unsubstantiated claims and support their ineffective background
checks. If this process is discriminatory, let's begin by looking at
the 76% of Uber driver applicants who were disqualified based on their
own background check process without the right for an impartial review.
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Paul A. Miller,
Legislative Counsel, The Transportation Alliance
Question 13. A rising concern with Transportation Network Companies
(TNCs) is the strength of their background checks for drivers. This
concern has been doubled by troubling reports like those from Eugene,
Oregon, where drivers passed Uber and Lyft sanctioned background
checks, but then failed law enforcement's background checks. It makes
Americans not trust your companies. Do you believe fingerprint
background checks are the remedy to this problem?
How are fingerprint checks different than those already being done?
And why weren't they used from the beginning?
Answer. This is one of our greatest concerns. When a passenger is
assaulted in any vehicle providing transportation service for-hire, it
impacts all carriers. When you have 6,000 reported assaults on
passengers by Uber drivers, the public isn't going to just feel unsafe
riding in an Uber, they will feel unsafe in any vehicle for hire. It's
for this very reason that our industry has been pushing so hard for
fingerprint background checks. This isn't the magic solution that will
eliminate all bad actors, but it will go a long way toward preventing
serious harm.
Part of the challenge is that we aren't regulated at the Federal
level, nor do we feel we should be. Each state and/or local
jurisdiction may have different rules. Some require fingerprint
background checks, but some--especially smaller jurisdictions--do not.
When it comes to passenger safety, we do believe there should be one
standard when it comes to background checks. For decades, our
association has stood strongly behind, and advocated fervently for, the
well-founded belief that safety starts with a fingerprint-based
national background check. This would make the process uniform and
effective, and would help prevent the staggering number of assaults
reported to Uber by their passengers. There is a federal role here,
especially as it relates to federal grants and contracts, for which we
do support a fingerprint background check requirement.
Question 14. Do you believe TNCs should implement fingerprinting
regardless of whether they receive federal transportation contracts?
Answer. Yes. We are pushing this to be the industry standard and,
as stated above, have made that our clear position for decades. We are
urging Congress to set the tone in this area by making it a requirement
that any company receiving a federal grant or contract to provide
passenger ground transportation be required to have its drivers pass a
national fingerprint background check. We believe that once the federal
government makes it a requirement, many more states and local
jurisdictions will follow.
Question 15. You assert that TNC concerns over the expense of
fingerprint checks and the possibility of discrimination are unfounded.
But fingerprinting has historically subjected Black Americans to well-
documented bias. Now, black men and women are statistically more likely
to lose their jobs simply because the FBI has inaccurate data.
Do you consider this a risk for communities of color?
Answer. I don't. There is no evidence to prove that a person
seeking to drive would be discriminated against because of race. Our
industry is predominately made up of persons of color and yet we have
not experienced problems getting drivers fingerprinted and licensed to
provide passenger transportation service for-hire. Remember that the
vetting process that governs the vast majority of our members' fleets,
provides a clear legal and administrative means of appealing an adverse
decision on driver licensing. Financial cost is also not an issue here,
since the cost of a fingerprint background check is less than $100. For
any business owner, this is simply a reasonable business expense to
operate a business in the safest manner possible.
Question 16. Should TNCs ignore these concerns of discrimination to
implement this technology?
Answer. I don't think any concerns of discrimination should ever be
dismissed lightly when they are legitimate. As I stated in my response
to question 15, our industry is predominately made up of people of
color, so I find it hard to understand Uber's claims of discrimination.
Uber's claims cannot be supported when they admit to having rejected
76% of driver applicants between 2017-2018. The real question is how
many of those drivers were people of color who were wrongly
discriminated against because of these companies' own flawed background
checks, which, as stated above, lack any clear legal or transparent
appeals process.
Questions from Hon. Lloyd Smucker to Paul A. Miller, Legislative
Counsel, The Transportation Alliance
Question 17. Throughout the course of the hearing, Uber and Lyft
drivers were repeatedly bashed as representatives from the taxi and
limousine industry attempted to paint all drivers as responsible for
the faults of a few bad apples.
To better understand the safety dynamics of all ride-sharing modes
of transportation, can you provide statistics on the numbers of
assaults, murders, and rapes that were committed by on-duty taxi or
limousine drivers?
Answer. There are no reliable national statistics that accurately
capture the whole of the industry. That is because there is no federal
database that tracks sexual assaults according to various industries,
including the taxicab industry. However, as a trade association that
has represented the professional fleet operators of this industry for
103 years, transporting billions of passengers each year, we have never
in our existence seen such an appalling and alarming number of sexual
assaults. If such a high rate had existed, we certainly would have seen
evidence of this in media reports covering such heinous crimes.
Instead, it was only when Uber and Lyft came into widespread use that
we saw near daily media reports of such crimes.
Question 18. The hearing made clear to me that the taxi and
limousine industry would like to level the playing field with TNCs with
respect to federal regulations.
What regulations would you support eliminating or scaling back in
order to improve competition among different modes of transportation?
Answer. We believe that fingerprinting of drivers should be a
prerequisite to any company--whether Uber, Lyft, or any other private
sector company offering passenger transportation for-hire--in securing
any federal passenger transportation contract. But in terms of a level
playing field, we believe that we should be allowed to compete fairly,
and that righting one of the greatest imbalances in our industry in
terms of insurance provisions is vital. There is no reason why an Uber
driver working full-time should pay $500 a year for vehicle insurance,
when insurance for a full-time taxicab costs $5,000 or more. Both
vehicles and drivers perform the exact same function.
Question from Hon. Mike Gallagher to Paul A. Miller, Legislative
Counsel, The Transportation Alliance
Question 19. In my hometown of Green Bay, Wisconsin, the Brown
County Tavern League has participated for two years in a partnership
with Lyft Concierge--a program by which you can remotely request rides
for anyone through Lyft. Don Mjelde, President of the Brown County
Tavern League, notes that during Packers games, taxis are busy. A
second form of reliable transportation is critical for safety. Some
proposals to regulate TNCs would require a user to be physically
present with a working cellphone when a TNC vehicle arrives. For
example, you couldn't be at home buying a ride for your friend.
How can we work to allow Lyft Concierge to continue partnering with
my home county while still addressing other safety concerns?
Answer. Nothing being proposed by us (like fingerprint background
checks) would impact the program in Green Bay. In fact, implementing
fingerprint background checks would make the program even more
effective because passengers would have a higher certainty that they
will arrive safely home. We agree safety has to be a top priority
today. If local officials are going to partner with local
transportation companies in their communities to provide their citizens
with safe transportation options, they have to be exactly that--safe.
We would be happy to have a more detailed dialogue with you on this
topic if you'd like, but what we are proposing would not have any
impact on the current program in your community.
Questions from Hon. Peter A. DeFazio to Larry I. Willis, President,
Transportation Trades Department, AFL-CIO
Question 1. On December 6, Uber released long-awaited safety data
in its ``US Safety Report.'' \1\ Among other findings, Uber received
nearly 6,000 reports of sexual abuse to varying degrees between 2017
and 2018.
---------------------------------------------------------------------------
\1\ https://www.uber-assets.com/image/upload/v1575580686/Documents/
Safety/UberUSSafetyReport_201718_FullReport.pdf
---------------------------------------------------------------------------
Mr. Willis, what are your initial reactions to Uber's report and
these findings?
Answer. Uber's report comes as no surprise. As highlighted in TTD's
report, The Cost of Doing Business: Why lawmakers must hold the ride-
hailing industry accountable as they undermine their workers and play
by their own rules, companies like Uber, Lyft, and Via have invested
millions into ensuring their industry is subjected to as few
regulations as possible. The inevitable result has been repeated safety
incidents with no accountability or oversite.
Question 2. Is Uber's safety report useful? Are there ways to make
it more useful?
Answer. Uber's safety report sheds important light on the lack of
corporate culture focused on safety in this industry, and highlights
exactly why the ride-hailing industry should be subject to strict
federal, state, and local oversight. We should not count on the
industry to self-report and self-regulate when it comes to the safety
of their passengers and other road users.
Question 3. TNCs consider themselves to be a technology company,
not a transportation provider. As such, the TNC regulatory framework is
relatively novel.
Are TNCs held to the same workforce standards as other forms of
transportation?
Answer. It is evident to us that companies like Uber, Lyft, and Via
are not subject to the same workforce standards as other forms of
transportation. These transportation companies masquerade as a tech
companies and Uber has gone so far as to claim that their drivers are
not core to their business model in order to skirt California's AB 5
law. While I think sober people recognize that this notion is a joke,
the result is employees with no workplace protections, no right to
organize, and wages that often are below minimum wage in the cities in
which they are operating. In particular, as these companies continue to
form partnerships with public transit agencies, we believe that
Congress must hold them accountable.
Question 4. Would TNCs be held to a different standard if they were
regulated as a transportation provider?
Answer. We believe they would, for the above highlighted reasons.
Question 5. What standards should regulators apply to TNCs? How
does this vary between the local and Federal level?
Answer. First, we believe Uber, Lyft, and Via must correctly
classify their drivers as employees. Denying their workers the basic
rights that employees deserve may be core to their business model, but
it is not core to the American ideals of receiving good pay and
benefits in exchange for your time and energy. Second, while we have
not weighed in on regulations in general, we believe that any
recipients of Title 49 dollars in partnership with public transit
agencies must be held to the same standards as transit operators,
including drug and alcohol testing. Third, given the serious concerns
about safety and equity surrounding these companies, we believe they
must turn over safety and ride data to federal regulators under any
arrangement with a public transit agency to ensure proper oversight and
accountability.
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Larry I. Willis,
President, Transportation Trades Department, AFL-CIO
Question 6. As you know, some TNCs assert that their drivers aren't
employees of their companies, rather independent contractors that offer
transportation services. This creates roadblocks to fair and robust
wages, as well as good benefits for the drivers. Additionally,
companies get to often circumvent any liability should problems arise
because of a problematic driver.
Can you expound on the dangers of these companies shrinking from a
responsibility to fairly pay their driving partners, and from issues
that may jeopardize passenger safety?
Answer. We simply do not believe that employers should be allowed
to misclassify their workers in the hopes of eking out a profit. The
shareholders and wealthy venture capitalists who currently fund these
companies must not stand on the shoulders of their drivers to keep
their own heads above water. If they cannot even meet wage
responsibilities under the law and still earn a profit, they should not
be in business. This business model should not be acceptable to the
American people and it should not be acceptable to lawmakers who
represent them.
Question 7. Should more states introduce legislation similar to
that of California's AB-5, how do you anticipate the labor practices of
TNCs to shift, if at all?
Answer. We do believe AB 5 is a model for other states to follow
and furthermore, we believe that Congress must immediately pass the PRO
Act. We already know that companies like Uber and Lyft plan to invest
more than $100 million into fighting AB 5 in California. Their entire
business has been built on defining and operating under their own
regulatory structure, and we do not expect them to give that up.
Question 8. Uber and Lyft have historically used arbitration
clauses with their so-called ``contractors'' in their employment
contracts. This prevents ride-hail drivers from holding the companies
accountable before a jury of their peers when the companies break the
law. Sexual assault cases, wage theft, and antitrust violations would
all be sent to arbitration, rather than federal or state court.
How do individual arbitration clauses keep drivers from having
their cases heard?
Answer. A response was not received at the time of publication.
Question 9. Why do you believe Uber and Lyft have insisted on
including these clauses in contracts with parties with considerably
less negotiating power?
Answer. A response was not received at the time of publication.
Question 10. How have drivers been fighting these clauses?
Answer. A response was not received at the time of publication.
Questions from the Majority-Side Subcommittee to Lyft
Uber, Lyft, and Via were invited to be witnesses at the hearing and
declined the invitation. Following are questions for the record from
majority-side members of the subcommittee to Lyft, along with their
answers.
* Please indicate whether any of the policies or protocols
described in response to the questions below vary by State.
Government Regulation:
Question 1. Your company has been cited as supporting preemption of
local TNC regulations. At the hearing, Mayor Freeman-Wilson, President
of the National League of Cities, provided the opposite view, arguing
for more flexibility for cities.
Do you oppose TNC regulation at the local level, and if so, why?
Please provide specific examples of the types of local regulations Lyft
opposes.
Answer. Lyft does not oppose regulation at the local level in
principle, and in fact has worked extremely hard to be a partner to
state and local governments in developing smart regulations designed to
promote economic development, build strong cities and communities, and
protect consumers and the environment. There have been instances where
Lyft has opposed proposed regulations that it believes to be
inconsistent with these goals.
For example, Lyft has opposed certain regulations that would impose
excessive licensing requirements or operation fees on drivers because
we believe that high barriers to entry threaten part-time economic
opportunities for those seeking to supplement their income by driving.
This is especially true for the 76 percent of Lyft drivers who drive
fewer than 10 hours a week on our platform. Such requirements also can
create confusion and uncertainty for drivers who operate in multiple
cities and localities within a state. As another example, we have
opposed certain data-reporting requirements that implicate the privacy
of our riders.
Question 2. Do you support State level regulation, and if so, why?
Answer. Yes, Lyft supports efforts by states to develop statewide
policies concerning TNCs, including the permitting and operation of
drivers who use TNC platforms. The absence of a statewide regulatory
framework can lead to a patchwork of inconsistent local regulations, as
well as cause undue burden on drivers.
Question 3. How much money has Lyft expended to date, in total,
opposing regulation of your company at the local, State, and Federal
level?
Answer. Lyft focuses our resources at the local, state, and federal
levels to engage government. We often support increased government
action, although sometimes oppose it. In many cases, Lyft's efforts to
partner with governments to develop regulations do not fall neatly into
supporting or opposing, as there are instances in which Lyft has
advocated for modifications of proposed legislation, and so we are
unable to track spend specifically related to opposition.
Public Safety:
Question 4. The hearing highlighted the growing number of news
reports of alleged assaults on passengers who utilize TNCs. At the
hearing, Paul Miller, Legislative Counsel with the Transportation
Alliance, noted that when a taxi driver is involved in an accident or
alleged assault against a passenger, not only are local police on-site
but the taxi commission conducts oversight as well. For TNCs, alleged
assaults or crimes are not documented as TNC-related, even if reported
to local authorities. The only comprehensive data source of passenger-
reported assaults and other incidents against Lyft drivers resides with
your company.
Do you support making the number of reported crimes perpetrated by
drivers against passengers you have received publicly available?
Answer. Lyft maintains the information that drivers and riders
report concerning safety incidents and provides that information to law
enforcement to assist law enforcement in investigating whether a crime
has been committed. We publicly report information concerning the
inquiries we get from law enforcement in our Law Enforcement Request
Transparency Report [https://lyft-assets.s3.amazonaws.com/helpcenter/
Lyft_Info_Request_Report_2018.pdf].
In addition, Lyft reports information concerning safety incidents
and driver deactivations to its regulators where required by state or
local law. Lyft is supportive of regulators sharing this information
with other TNC companies. For example, in Chicago, TNCs are required to
report driver deactivations, and the Business Affairs and Consumer
Protection agency shares information concerning safety-related
deactivations with other TNCs.
Question 5. Do you support local authorities tracking incidents
that occur on hailed rides in order to provide law enforcement with
better data to inform their public safety strategies?
Answer. Yes, we support and defer to local authorities on whether
and how to track rideshare- and taxi-related incidents.
Question 6. Do you track the type and frequency of passenger-
reported crimes perpetrated by drivers you receive? If not, please
explain why.
Answer. Lyft maintains information concerning all incidents that
drivers and riders report to it, including rider reports regarding
incidents with drivers, and provides that information to law
enforcement to assist law enforcement in investigating whether a crime
has been committed. In addition, we publicly report information
concerning the inquiries we get from law enforcement in our Law
Enforcement Request Transparency Report [https://lyft-
assets.s3.amazonaws.com/helpcenter/Lyft_Info_Request_Report_2018.pdf].
Question 7. Please provide data on the total number of incidents
involving alleged crimes against riders by drivers you have received,
to date, broken down by type.
Answer. Lyft does not assign rider reports into categories of
``alleged crimes.'' When we receive a report concerning a safety
incident, Lyft conducts an internal assessment to determine the
appropriate response, including, for example, driver deactivation, and
maintains the information collected in the initial report and gathered
from our inquiries. As indicated elsewhere in this letter, Lyft also
works cooperatively with law enforcement to provide information to
assist in efforts to investigate any reported crimes concerning the
incident.
Question 8. What is your specific process for reviewing alleged
incidents of violence, assault, or harassment reported by Lyft
passengers? What is your specific process for reviewing complaints and
alleged incidents by Lyft drivers? What is your specific protocol for
when and how to refer incidents to law enforcement?
Answer. We take every allegation of harassment very seriously and
our dedicated Trust & Safety team investigates each incident and makes
a determination based on the evidence available, such as statements
from involved parties, past ratings, user feedback, and police reports
where applicable. Throughout this process accounts are often
deactivated in order to ensure the safety of the community.
Except where required by law, Lyft does not initiate reports to law
enforcement because we believe it is imperative for individuals to have
agency regarding how and with whom they share their experiences. It is
our policy, in instances when an individual makes a report to law
enforcement and law enforcement seeks information from Lyft, to respond
to all valid requests, by providing information and data in accordance
with applicable laws (including reporting rules and regulations) and
with our privacy policy. These responses are handled by our dedicated
Law Enforcement Response team, which also operates twenty-four hours a
day, seven days a week.
Law enforcement can contact this team directly at [email protected] when
seeking assistance with their investigations. When law enforcement
provides us with a valid legal request such as a warrant, subpoena or
court order, we work with the requesting officer to ensure that all
responsive records are provided as soon as possible. More information
regarding Lyft's law enforcement policies and procedures can be found
on Lyft's Help Center [https://help.lyft.com/hc/en-us/articles/
115012925607-Law-enforcement-requests] and also in our most recent Law
Enforcement Request Transparency Report [https://lyft-
assets.s3.amazonaws.com/helpcenter/Lyft_Info_Request_Report_2018.pdf].
Question 9. What is your specific protocol to follow up with
drivers who have been accused of harassment, assault, or violence? What
is your specific protocol to deactivate a driver?
Answer. Both riders and drivers can report incidents to our
dedicated Trust & Safety team, available twenty-four hours a day, seven
days a week. We investigate each incident, including by collecting
additional information from the involved parties and working with law
enforcement where appropriate, in order to decide what action is
needed. Lyft may put the involved users' accounts on hold during its
investigation. Where Lyft determines that the driver no longer meets
our driver qualifications or otherwise believes that deactivation is
necessary to protect the safety of the Lyft community or third parties,
Lyft deactivates the driver.
Driver and Passenger Verification:
Question 10. During his testimony, Congressman Smith informed the
Subcommittee that anyone can go online and purchase Lyft signage to
place in their cars in order to appear as drivers. A quick search on
Amazon revealed several options of Lyft signage and lighting for under
$10.
Does your company trademark the Lyft signage and lighting features
drivers use in their cars when working?
Answer. The Lyft emblems/placards and Lyft Amp that Lyft provides
to authorized Lyft drivers (``Lyft Trade Dress'') are the only items
drivers are authorized to display in their vehicles to identify as Lyft
drivers. These materials are only provided to authorized drivers and
are not made available for purchase. The Lyft Trade Dress bears the
LYFT logo, which is Lyft's registered trademark in many jurisdictions
worldwide (including the U.S.) for a variety of goods and services,
including rideshare. Lyft also has trademark and design patent filings
specifically covering the Lyft Amp (the lighted device Lyft provides to
qualifying drivers to display on their dash board). In addition, Lyft
has filed trademark applications in several jurisdictions for the LYFT
logo and LYFT wordmark covering lighting devices.
Question 11. If so, have you sought to enforce your trademark to
control who can sell or use these signs? If not trademarked, please
explain why.
Answer. Yes, Lyft takes a number of actions to control the use of
the Lyft Trade Dress and prevent its sale. First, Lyft controls the
distribution of the Lyft Trade Dress, limiting it only to authorized
drivers, and does not make the Lyft Trade Dress available for purchase.
Second, per its Terms of Service [https://www.lyft.com/terms] (see
Section 11), Lyft prohibits drivers from renting, leasing, selling, or
otherwise redistributing the Lyft Trade Dress, and from granting any
third party any right, permission, license, or sublicense to use the
Lyft Trade Dress, as well as other restrictions detailed in that
section.
Lyft is aware that Lyft Trade Dress (as well as counterfeit Lyft
signage and lights) has been offered by unauthorized third parties on
Amazon and other online marketplaces. Lyft regularly engages with these
online marketplaces and demands that they implement proactive blocking/
filtering fixes to prevent the marketing or sale of these items.
Several of the major marketplaces have taken action in response,
including the implementation of filters, to help prevent the listing
and sale of these unauthorized and counterfeit items. However, filters
are not 100% effective, and unauthorized and counterfeit sellers are
sometimes able to evade them by altering images, using typos and
misspellings, and avoiding key terms. As a back-up measure, Lyft and
its third-party professional brand enforcement vendor proactively
monitor these marketplaces on a daily basis and send takedown requests
to the platforms to immediately remove any offending items that they
identify.
Additionally, Lyft has supported legislation in a variety of
jurisdictions to increase the penalties for impersonating a rideshare
driver.
Question 12. Do you require drivers to display signage in their
vehicles when providing rides? If so, what are the exact requirements,
where do drivers procure the signage from, and what oversight do you
conduct to ensure drivers are displaying the required signage
correctly?
Answer. Once approved as an authorized driver, drivers receive,
either in person or via mail, a Lyft `Welcome Kit' containing their
Lyft emblems. For those drivers who rent a vehicle through Lyft's
Express Drive program, the vehicle already has a Lyft emblem in place.
The Welcome Kit explains proper placement of the emblems and instructs
that the emblems are legally required in many states. Additionally,
information about emblem placement is provided on Lyft's Help Center,
available here [https://help.lyft.com/hc/en-us/articles/115013082088-
New-driver-welcome-kit#emblem].
Lyft includes a photo of every driver in the app, so passengers can
easily identify them, and we also show the make, model, license plate
number, and color of the car in the app ahead of a passenger being
picked up. After a ride is matched, Lyft sends two unique notifications
to the passenger, urging them to check and confirm the license plate
number before entering a vehicle.
Additionally, hundreds of thousands of drivers also have the Lyft
Amp on their dashboards, which lights up to match the color shown in
the passenger's app, and it illuminates the passenger's name upon
entering the vehicle.
Question 13. Additionally, do you require drivers to verify that
the correct passenger has entered the car? If so, what is the process
required? If not, please explain why.
Answer. After arriving at the pickup location, drivers are required
to acknowledge in-app that they have picked up the named rider. The
driver sees the rider's name and photo (if the rider has chosen to
provide one), and then has the ability to cancel the ride if the
appropriate passenger is not there. Driver acknowledgement of pick-up
is a necessary step that a driver must take before the driver can start
the trip.
Question 14. How will you verify passengers when your vehicles are
autonomous and there is no driver? Is the proposed solution when you
utilize autonomous vehicles applicable to today's vehicles?
Answer. Our current testing and deployment of autonomous vehicle
technology includes a safety driver who engages with passengers. While
we cannot speak to the exact structure and make-up of future business
models, we can confirm that passenger safety and verification is core
to the development of our products.
Background Checks:
Question 15. During his testimony, Mr. Miller urged Congress to
require industry standardized fingerprint-based background checks as
part of any Federal contract awarded to TNCs. Lyft has actively opposed
the use of fingerprint-based vetting.
Why do you oppose fingerprint-based background checks for Lyft
drivers?
Answer. At this time, Lyft does not employ these types of checks
because of their current limitations. In a fingerprint-based background
check, an individual's fingerprint is searched across the FBI
fingerprint database to determine whether there is a match and if so,
to identify records associated with that fingerprint in the FBI's
database. These records, however, are arrest records, and frequently do
not include information about the disposition of the arrest (i.e.,
whether charges were brought or whether any conviction resulted).
Moreover, according to a GAO report \1\, the fingerprint database
itself is incomplete and not fully up-to-date. Many states have
estimated that 50% or less of their arrest records lacked final
disposition, and the FBI has noted that it is not possible for states
to have 100% complete records. That is why we believe that the Lyft
background check approach is more comprehensive and thorough than
fingerprinting.
---------------------------------------------------------------------------
\1\ https://www.gao.gov/assets/670/668505.pdf
---------------------------------------------------------------------------
Further, looking at arrest records disproportionately disadvantages
minorities and communities of color who are more likely to come into
contact with the police. In fact, former U.S. Attorney General Eric
Holder wrote [https://drive.google.com/file/d/0B953p-
cRQOA0a1Aya3JiRHJrSlEwYnlJUUdtS0ZWcnZpRUpz/view?usp=sharing] that,
``requiring fingerprint-based background checks for non-law enforcement
purposes can have a discriminatory impact on communities of color. With
nearly 50 percent of African-American men and 44 percent of Latino men
arrested by age 23 nationwide, the practice of denying work based on
law enforcement records with incomplete and inaccurate information
disproportionately disadvantages people who have been arrested.''
The National Employment Law Project (NELP) [https://www.nelp.org/
publication/wanted-accurate-fbi-background-checks-for-employment/]
estimates that more than 600,000 workers a year could be harmed in
their job search when the FBI background check excludes post-arrest
information that may benefit applicants in their search for employment.
As noted above, arrest records often are not updated with disposition
information reflecting whether the individual was charged, tried, or
convicted, with the effect of making some applicants look as if they
have been involved in criminal activity, when in fact they have not.
Thus, in addition to the limitations on the completeness and accuracy
of information derived from fingerprint-based background checks, there
is a concern that such checks could have a disparate impact on minority
communities, and therefore be inconsistent with Lyft's value of
upholding diversity in our driver community.
Question 16. How much has your company spent on lobbying activities
to oppose local initiatives to require fingerprint-based background
checks by police, such as in Austin, TX?
Answer. At this time, Lyft does not use or support the use of
fingerprint-based background checks because of the limitations and
concerns described above--which include concerns that go to Lyft's core
principles and its fierce commitment to fighting for better
opportunities for people.
Lyft has advocated for its beliefs on this issue, including by
investing in its efforts to educate lawmakers and the public on the
deficiencies of fingerprint-based background checks, in Austin and
elsewhere.
It is important to note, however, that we did return to Austin in
2017, and since then have been operating successfully with our
traditional name-based background checks, working in partnership with
city officials.
Question 17. How much do the third-party background checks you
currently utilize cost?
Answer. Lyft utilizes several third-party partners to screen
applicants and drivers. The pricing of these contracts is negotiated,
highly sensitive, and provides information about these partners that is
trade sensitive and confidential.
Question 18. How much does a comprehensive fingerprint-based
background check cost?
Answer. As set forth above, Lyft does not use fingerprint-based
background checks. In the context of its purchase of name-based
background checks, pricing is negotiated between the parties. Because
Lyft does not use fingerprint-based background checks it has not
negotiated pricing for such checks, it is not in a position to provide
information on actual costs for this type of check, and would expect
that costs would vary depending upon the scope and volume of the
services. However, to be clear we oppose fingerprint-based background
checks for the reasons described above. Cost has never been a factor in
our decisions to not pursue these types of checks.
Question 19. Would the cost of fingerprint-based background checks
for every Lyft driver currently operating in Austin be greater or less
than the amount you paid for lobbying activities in Austin to oppose
the regulation?
Answer. Lyft's concerns with fingerprint-based background checks
for driver candidates are not rooted in the cost of these background
checks to the company. As addressed above, at this time, Lyft does not
employ or support these types of checks because of their current
limitations and the concerns they raise in relation to Lyft's core
principles. For this reason, we felt it was important to invest in
lawmaker and community education in Austin and elsewhere to advocate
regarding our strong concerns with requiring fingerprint-based
background checks for TNC drivers.
In addition, we believe that our existing approach--using initial
and annual name-based checks provided by Checkr and ongoing monitoring
provided by First Advantage--provides a comprehensive and thorough
framework for applicant-screening and driver-monitoring, and one that
is far superior to the information available from fingerprint-based
checks.
Question 20. What specifically do the third-party background checks
you utilize cover, and what specifically is not included that is
covered in a fingerprint-based check?
Answer. Lyft's background check is a comprehensive name-based
criminal screen, which uses an applicant's personally identifiable
information (``PII''--name, date of birth, Social Security Number) to
search for criminal history. Based on the applicant's Social Security
Number, Lyft's provider, Checkr, locates prior address history and
aliases from credit header data and other public records. Checkr then
conducts a National Criminal Records Check, which is a name-based
search of a multi-jurisdictional database that combines publicly
available and purchased criminal records compiled from a variety of
state, county, and other proprietary sources. Using the applicant's
PII, address history, and any data from the National Criminal search,
Checkr conducts a County Criminal Records Check--searching all felony,
misdemeanor, and pending criminal records for all relevant counties
associated with the applicant. In addition, information is gathered
from a State Criminal Records Check, a Federal Criminal Records Check,
a Sex Offender Registry Check, and a Global Watchlist Records Check,
which searches various domestic and international government watchlists
including the FBI's Most Wanted Lists, Interpol's Most Wanted Lists,
and other sanctions lists.
Active drivers are all re-screened and must undergo this Checkr
background check at least every year. In addition, since April 2019,
all active drivers have been enrolled in Lyft's continuous criminal
monitoring program with First Advantage. This product uses a different
national criminal records database, as well as national arrest and
warrant databases, to search for new criminal records and immediately
notify Lyft of disqualifying convictions and pending cases.
In contrast to Lyft's comprehensive and multi-tiered criminal
screening processes, fingerprint-based background checks are generally
limited to a search of the government (FBI) fingerprint database. The
database is intended for use by law enforcement to aid with
investigations. It is not well-suited to assess eligibility for
contractorship. The database is reliant on the FBI's timely receipt of
fingerprint information from states and municipalities; and there are
significant gaps in this as many states fail to report all records or
fail to do so in a timely manner. In addition, fingerprints are often
linked to records that show an arrest, but are missing the final
disposition of the case. This means a fingerprint-based background
check may not show that the arrest never led to charges, or that the
charges were later dismissed or resulted in acquittal. Also,
fingerprint background checks will not find criminal records where
fingerprints were either not taken, were lost, or otherwise not filed
with the record.
Driver Wages:
Question 21. Several Members raised the issue of employee
classification and driver wages at the hearing. In his testimony, AFL-
CIO Transportation Trades Department President Larry Willis stated that
many drivers who work for ride hailing companies make less than the
minimum wage of the city they are operating in. Your company's own
estimates claim that Lyft drivers make an average of closer to $21 per
hour.
Are your average reported wages of $21 per hour net of any expenses
a driver is responsible for under your business model? Please provide a
list to the Committee of all expenses, such as vehicle maintenance and
fuel, for which Lyft drivers are responsible, as well as an itemized
list of fees your company collects from driver fares.
Answer. Our national average hourly earnings has actually increased
and is now $29.47 per hour \2\ gross when drivers are booked, including
tips. Booked time is calculated from the time a driver accepts a ride
request to the time the driver drops off a passenger. Expenses vary
depending on when, where, and how much someone drives. See below for
average per mile expenses, which comes to approximately $5-6 per hour.
Additionally, tips on the Lyft platform are $2.36 per hour on average.
Drivers have earned well over $500M in tips [https://blog.lyft.com/
posts/500-million-in-tips] since Lyft's start.
---------------------------------------------------------------------------
\2\ Lyft, Sharing the Ride with Lyft [https://medium.com/sharing-
the-ride-with-lyft/what-you-can-make-driving-with-lyft-f9a840cc20d9],
Laura Copeland April, 2018
Driver Expenses \3
------------------------------------------------------------------------
------------------------------------------------------------------------
Mileage Based Depreciation $0.05
Gas $0.12
Repair & Maintenance $0.13
----------------------------
Total $0.30/mile
------------------------------------------------------------------------
lyft fees
---------------------------------------------------------------------------
\3\ Zoepf, The Economics of Ride Hailing: Driver Revenue, Expenses
and Taxes, MIT CEEPR Feb, 2018. Note, we remove insurance cost from
their Repair & Maintenance & Insurance cost because insurance is a
fixed cost. Our Repair & Maintenance figure is in line with ``AAA's
Your Driving Costs 2019''
---------------------------------------------------------------------------
Lyft does not collect any fees from driver earnings. Driver pay is
calculated based on the time and distance of a ride. Drivers receive a
base rate when they start the ride, and can collect bonuses and tips on
top of that. This provides drivers with a consistent earnings
experience regardless of what the rider pays.
Classification:
Question 22. In the lawsuit Jessica Harris v Uber, Uber's defense
argued that they are not a transportation company, but rather a
technology company with independent contractors.
Does Lyft consider itself a transportation or technology company?
Answer. Lyft is regulated in most jurisdictions as a
``Transportation Network Company,'' or ``Transportation Network
Provider.'' The word ``network'' is the pillar that distinguishes us
from transportation companies. We are not simply a taxi dispatcher with
an app built on top. The software that powers our platform, managing a
double-sided marketplace (i.e. network) by dynamically meeting supply
and demand in real time, is extraordinarily hard to build and maintain.
It's why we employ over 2,000 software engineers and developers whose
job it is to keep the rideshare platform running and improving every
day.
The platform itself is a technology, and a very sophisticated one.
That network technology is the innovation that our company pioneered.
It powers everything that separates us from a transportation company--
from enabling drivers to decide when, where, for how long, and for whom
they drive, to tearing down barriers for communities long underserved
and without historical access to affordable, reliable transportation
options. The platform technology is the source of the flexibility that
drivers demand, and the accessibility that riders have come to love and
depend on.
Question 23. If every driver on your platform quit tomorrow, how
would you continue to provide service for your customers?
Answer. The truth is that drivers can quit and do quit driving on
our platform all the time. Our driver marketplace is highly fluid, and
that is because drivers like the ability to choose when, how and where
to work. If drivers on our platform are not satisfied, they can drive
for other platforms, or not at all; they have a wide range of choices
and can change platforms or log off with the tap of a screen. We have
to compete to attract drivers to our platform every day, just like we
compete for riders. That's why we work hard to show drivers that we've
built a reliable, flexible, platform for earning when and where it
works for them. It's why we strive to provide drivers on our platform
with the best customer service, the best software product, and the best
earning opportunities in our industry. Because the product we have
built has provided tremendous value for riders and drivers both, we
welcome discussions with legislators and regulators about how to
provide meaningful new legal frameworks that both protect drivers and
their earnings, and guarantee their ability to work with the
flexibility that our platform provides.
Question 24. If your business model is dependent on drivers
generating a profit from ride hailing services, how do you justify
classifying drivers as independent from your company?
Answer. On the Lyft platform, 91 percent of drivers drive fewer
than 20 hours per week, 76 percent drive fewer than 10 hours per week,
and the median driver spends just 10 weeks of the year driving with
Lyft. Our drivers choose to work with us as a supplement or alternative
to traditional jobs with scheduled shifts and set locations. Consider
parents who want to work flexible schedules while children are in
school; students who want to earn money in between classes; retirees
who drive for a few hours a week to supplement fixed incomes and for
social interaction; or military spouses and partners who frequently
relocate.
Drivers have the freedom, flexibility, and control to choose when
to work, how much they work, how often they work, where to work, and
ultimately whether to log on at all. Drivers tell us this is what they
value most about Lyft. Once on the platform, a driver never has to
accept any ride request and is never penalized for declining any given
ride request. Nor are there any required work minimums. Drivers are
also free to work for multiple rideshare platforms at the same time,
and many Lyft drivers choose to do so, something nearly impossible to
do in a traditional job.
Rideshare drivers have told us repeatedly that they do not want to
lose this freedom, flexibility, and control, and many would stop
driving if forced into the confines of a traditional job that they have
already chosen to avoid. As stated above, Lyft is a Transportation
Network Company and it is in the business of managing and improving the
double-sided marketplace that its platform technology pioneered. This
double-sided marketplace connects--and facilitates transactions
between--riders looking for rides, and drivers in the business of
providing them. This is true of any platform like ours that has to
build a double-sided marketplace. eBay, for example, could not exist
without both buyers and sellers. But that fact neither addresses nor
resolves the question of whether eBay sellers are employees of eBay. It
is why such a fact is not given great weight by federal employment
classification analyses. For that reason, several federal agencies,
including the DOL and NLRB \4\, have asserted that drivers who choose
to drive on a network platform like ours are doing so as independent
contractors.
---------------------------------------------------------------------------
\4\ https://www.dol.gov/whd/opinion/FLSA/2019/
2019_04_29_06_FLSA.pdf
http://apps.nlrb.gov/link/document.aspx/09031d4582bd1a2e
---------------------------------------------------------------------------
Transit Partnerships:
Question 25. At the hearing, Mr. Willis noted that according to
Uber's public filings, they are seeking new revenue streams, including
partnerships with public transportation agencies.
Is Lyft pursuing partnerships with public transportation agencies
as a new revenue stream?
Answer. Use of the Lyft platform to access public transportation
has always been part of Lyft's complete revenue stream, as Lyft riders
have long used our services organically to facilitate transportation to
and from the nearest public transit station. As noted, 25% of all our
rides nationwide are within 100 meters of a public transit station.
In 2018, we began to introduce mixed transportation trip-planning
capabilities in our app, including providing access to public transit
routes and timetables--providing people more options than ever to get
around. Today, riders can seamlessly request a Lyft as a first- or
last-mile solution during their transit journey.
We have partnered with transit agencies over the past four years,
either directly at an agency's request, or by winning a formal RFP
process. The circumstances under which these partnerships have come
about have been when transit agencies have approached us with their
needs.
Question 26. What specific types of partnerships does the company
envision with public transit agencies? Does this go beyond providing
first mile/last mile service, paratransit, or late-night service? Are
you seeking Federal transit funds to provide these services?
Answer. Our Transit Partnerships team is comprised of
transportation planners and service planners who work with public
transit agencies to better understand local needs and co-create bespoke
programs to support an agency's mobility goals. Lyft does not seek
Federal transit funds to provide these services.
Lyft is focused on helping transit agencies respond to solve
mobility gaps in their communities. We share this Committee's goal to
help empower local transit agencies to respond to challenges with
innovative solutions.
Questions from the Majority-Side Subcommittee to Uber
Uber, Lyft, and Via were invited to be witnesses at the hearing and
declined the invitation. Following are questions for the record from
majority-side members of the subcommittee to Uber, along with their
answers.
* Please indicate whether any of the policies or protocols
described in response to the questions below vary by State.
Government Regulation:
Question 1. Your company has been cited as supporting preemption of
local TNC regulations. At the hearing, Mayor Freeman-Wilson, President
of the National League of Cities, provided the opposite view, arguing
for more flexibility for cities.
Do you oppose TNC regulation at the local level, and if so, why?
Please provide specific examples of the types of local regulations Uber
opposes.
Answer. Uber supports regulation--whether at the local or state
level--that is in the best interests of TNC riders, drivers, and the
broader community. We do not oppose all regulation at the local level.
For example, Uber has been working directly with local and regional
regulators and transit authorities on our electric JUMP Bike and
Scooter products, and with our products designed to encourage riders to
take existing public transit. Instead, we evaluate all proposed laws
that would affect the TNC industry on their merits. Uber undertakes a
case-by-case evaluation of all proposed legislation, and cannot
categorically list the types of regulations we oppose. However, there
are instances where Uber has opposed local regulations that, in our
view, do not serve the best interests of TNC riders, drivers, and the
broader community. For example, Uber recently announced its opposition
to a proposed measure in the City of Chicago that would impose a $3.00
fee on TNC rides within certain parts of the City without equitably
applying those fees or fully considering the impact on communities with
already limited access to transportation options. In addition, Uber
opposed regulations in New York City that cap the number of for-hire
vehicles that may operate in New York City, which we believe will
ultimately hurt transportation access in the outer boroughs while
failing to meaningfully address congestion in Manhattan.
Question 2. Do you support State level regulation, and if so, why?
Answer. Generally speaking, TNCs such as Uber are regulated at the
state level, and Uber has supported state-level regulation. Regulation
helps to protect consumers, empower drivers, and unlock opportunities
for the wider industry. Because the rules governing transportation
services in most states were put in place prior to the emergence of
ridesharing technology, Uber has argued that new laws and regulations
are necessary to support new technology and new models.
Statewide regulatory frameworks can be a better conceptual fit for
TNC drivers than municipal or county-level regulatory frameworks. This
is because TNC drivers frequently take trips that cross city or county
lines. It can be extremely complicated for drivers to comply with a
patchwork of regulations that often emerge when cities and counties
adopt their own regulatory frameworks. For example, prior to the
enactment of a statewide framework in the State of Florida in 2017,
drivers who operated in South Florida had to comply with three distinct
regulatory frameworks in Miami-Dade County, Broward County, and Palm
Beach County, each with dozens of different requirements, even though
the work they provided and local considerations were nearly identical.
Another reason states seemed to quickly claim oversight of our industry
was because auto insurance is typically regulated at state levels, and
many state legislators chose to make policy on our nascent industry to
ensure drivers and riders would be protected with standards around
liability coverage, among other consumer protections.
Statewide regulatory regimes can also be a better conceptual fit
for TNC riders. Without a statewide regime, it may be infeasible for
TNCs to offer technology in more rural and remote parts of states. This
is because the costs of compliance with dozens of municipal regulatory
regimes can outweigh the benefits of extending technological reach to
areas where there are few riders and drivers. The adoption of statewide
regulatory regimes therefore enables TNCs to expand the reach of its
technology to more rural and remote areas, which have historically had
little to no access to for-hire transportation or other transit
options. For these and other reasons, 46 states and the District of
Columbia have enacted statewide regulatory regimes for TNCs.
While we believe that statewide regulatory regimes are generally
preferable, Uber has worked collaboratively with cities on TNC
regulations. Uber has supported regulations that protect riders by
enabling access to safe, reliable and affordable transportation at the
touch of a button--regulation that empowers drivers by providing
flexible economic opportunities built on existing skills, and
regulation that improves cities by authorizing ridesharing services,
which requires fewer, fuller, and more efficient vehicles than existed
prior to ridesharing. In addition, these regulations have led to
increased transportation access to historically underserved areas by
providing a platform that aims to lower barriers and remove obstacles.
We at Uber aspire to democratize mobility and work.
Specifically, Uber has supported regulations that:
Require TNC drivers to undergo a robust background check
process with defined standards set out in law;
Ensure that key safety information is communicated to a
rider via the app before a trip occurs, including the license plate
number and photo of the driver;
Provide pricing transparency to riders by requiring TNCs
to either show riders an upfront price or explain its fare methodology
before a trip occurs;
Require insurance coverage that far exceeds the
requirements for the taxi industry in most US jurisdictions; and
Prohibit TNC drivers from engaging in any type of
discrimination.
Question 3. How much money has Uber expended to date, in total,
opposing regulation of your company at the local, State, and Federal
level?
Answer. While Uber reports its lobbying expenditures in many
jurisdictions throughout the country, it is not required to delineate
as part of a lobbying activity report whether it has expended money
``supporting'' or ``opposing'' a particular proposal. Frequently it is
the case that Uber supports some aspects of a proposed bill and opposes
other aspects of it, thus making such a calculation impossible. It is
also often the case that Uber may support a proposal at one time and
then oppose the proposal after it is amended during the legislative
process.
Public Safety:
Question 4. The hearing highlighted the growing number of news
reports of alleged assaults on passengers who utilize TNCs. At the
hearing, Paul Miller, Legislative Counsel with the Transportation
Alliance, noted that when a taxi driver is involved in an accident or
alleged assault against a passenger, not only are local police on-site
but the taxi commission conducts oversight as well. For TNCs, alleged
assaults or crimes are not documented as TNC-related, even if reported
to local authorities. The only comprehensive data source of passenger-
reported assaults and other incidents against Uber drivers resides with
your company.
Do you support making the number of reported crimes perpetrated by
drivers against passengers you have received publicly available?
Answer. Uber has independently committed to publishing a safety
report this year that will include data on reported incidents of sexual
assaults and other serious safety incidents that occur in connection to
the Uber platform \1\. It is worth noting that both riders and drivers
may be reported as the perpetrators of such safety incidents in
connection with the Uber platform.
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\1\ Tony West, Turning the lights on, Uber Newsroom (May 15, 2018),
https://www.uber.com/newsroom/turning-the-lights-on/
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As part of that process, we've worked with the National Sexual
Violence Resource Center and the Urban Institute to develop and
implement an open-source Sexual Misconduct and Violence Taxonomy
globally and have been working with other companies to encourage shared
adoption. The taxonomy provides a way to classify incidents reported to
us with greater precision and consistency. Prior to this, no uniform
industry standard for classifying reports of sexual assault and
misconduct existed.
Uber believes that if we confront the issue of sexual violence and
count it consistently, we can make more progress to end it. We hope
this report can help other companies deliver best practices beyond to
prevent sexual violence.
Question 5. Do you support local authorities tracking incidents
that occur on hailed rides in order to provide law enforcement with
better data to inform their public safety strategies?
Answer. We are committed to supporting safety in our communities
and we are always looking to partner with local authorities and law
enforcement to help improve public safety. In some jurisdictions, we
are required to report certain incidents to local regulators. We
evaluate each proposal to determine whether it is tailored to meet the
policy purpose and protect individual privacy interests.
In addition, we have implemented robust processes to assist law
enforcement during investigations. We have a team of former law
enforcement professionals (e.g., former police officers, FBI, Secret
Service, and other trained security professionals) who are on call to
work with police 24/7 to respond to urgent needs and walk them through
how we can assist in an investigation. This team also works to
proactively educate law enforcement about how to reach us and get the
information they need through valid legal processes, and engages them
regularly. The team also receives and manages these requests.
In March 2017, Uber launched a law enforcement web portal to make
the process of obtaining information in guidance with the law easier,
faster and more secure for our partners in law enforcement.\2\ This
portal enables police to gather critical information securely and
quickly when and where they need it most. The portal enables requests
to be initiated either from a desktop in an office or on a mobile
device in the field.
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\2\ Mike Sullivan, Uber Shows How Tech Can Play an Ethical Role in
Both Privacy and Public Safety, Uber Newsroom (Oct. 11, 2017), https://
www.uber.com/newsroom/safety-and-security/
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We've also published Guidelines to make clear how we work with law
enforcement.\3\ For example, Uber ensures that any disclosure of
information is consistent with our internal policies and applicable
law. Uber also works to provide information as soon as possible (i.e.,
within an hour) for emergency and exigent requests, and, for a standard
request, we aim to provide information in 14 days or less.
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\3\ Uber Technologies, Uber Guidelines for Law Enforcement
Authorities--United States, WWW.UBER.COM, https://www.uber.com/legal/
data-requests/guidelines-for-law-enforcement-
united-states/en-US/.
Question 6. Do you track the type and frequency of passenger-
reported crimes perpetrated by drivers you receive? If not, please
explain why.
Answer. We believe transparency fosters accountability. However the
decision to publish a safety report was a challenge, in part because
data on safety and sexual assaults across society generally is sparse
and inconsistent. In fact, as the first company to voluntarily report
on this information, there is no data to reliably or accurately compare
reports against ridesharing drivers versus taxi drivers or limo
drivers, or Uber versus buses, subways, airplanes or trains. And when
it comes to categorizing this data for public release, no uniform
industry standard for reporting has existed.\4\
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\4\ https://www.gao.gov/assets/680/678510.pdf
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But we decided we can't let all of that hold us back. So we worked
with experts in the field to develop a taxonomy to categorize the
incidents that are reported to us, whether reported by a rider or a
driver. We've open-sourced this methodology and made it available to
all in order to encourage others in the ridesharing, transportation and
travel industries, both private and public, to join us in taking this
step. For example, TripAdvisor is using the taxonomy to help guide a
study of safety-related incidents reported in reviews left by travelers
using their platform.\5\ By providing a roadmap, we feel that we can
help bring more accountability and therefore improve safety for
travelers overall.
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\5\ https://www.nsvrc.org/blogs/tripadvisor-and-business-case-
better-safety-information
Question 7. Please provide data on the total number of incidents
involving alleged crimes against riders by drivers you have received,
to date, broken down by type.
Answer. We have committed to publishing a safety report that will
include data on reports of sexual assaults and other critical safety
incidents in connection to the Uber platform. We've committed to
releasing this report by the end of the year.
This has been an intensive and complex effort given that no uniform
industry standard for categorizing and reporting this data previously
existed. So we had to create one. Again, turning to experts, we worked
with the National Sexual Violence Resource Center and the Urban
Institute to develop a system to categorize the incidents that are
reported to us. We've made this methodology available to all.
Question 8. What is your specific process for reviewing alleged
incidents of violence, assault, or harassment reported by Uber
passengers? What is your specific process for reviewing complaints and
alleged incidents by Uber drivers? What is your specific protocol for
when and how to refer incidents to law enforcement?
Answer. As ridesharing options like Uber have grown quickly over
the past several years and people are using them more regularly in
their daily lives, we know that we have a responsibility to cooperate
with law enforcement investigations, while also protecting the privacy
of our users.
The types of incidents our team handles encompass a wide spectrum,
and therefore there is no ``one size fits all'' approach to dealing
with them. We review each case individually based on the information
available to us.
We have a dedicated team--which was formed in July 2017--to address
any urgent issues. We created this specialized team to handle more
serious safety reports in an effort to implement targeted training and
improve how we support riders and drivers in these difficult
situations. We've elevated our training and designed a program centered
on victims so we can approach these situations with even greater care.
We also have a global law enforcement team made up of former law
enforcement professionals who have the expertise to handle requests
from public safety officials during active investigations.\6\ They are
on call to interact with law enforcement and share information quickly
when time is critical.
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\6\ Mike Sullivan, Uber Shows How Tech Can Play an Ethical Role in
Both Privacy and Public Safety, Uber Newsroom (Oct. 11, 2017), https://
www.uber.com/newsroom/safety-and-security/
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If we believe an individual is a danger to themselves or others, we
will take appropriate action that may include deactivation and helping
to facilitate reporting to law enforcement. In the case of a sexual
assault for example, we instruct agents to provide survivors with
contact information that will allow them to reach law enforcement, as
well as connect with crisis support services.
Not all survivors of sexual assault want to report to law
enforcement or contact a crisis center. Both survivors and sexual
assault advocacy experts have told us repeatedly that preserving
survivors' choice is critically important; it should be up to survivors
whether to share their stories, and that includes whether to report an
incident to law enforcement.\7\ We do our best to respect a survivor's
right to control with whom they disclose information. Several months
ago, we started looking into the process of implementing a customer
support protocol where we would advise that what is being reported may
be a crime to give people the option to allow us to contact law
enforcement on their behalf.
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\7\ @RALIANCEOrg, TWITTER (Sept. 25, 2019, 6:18 PM), https://
twitter.com/RALIANCEOrg/status/1177029586854588416
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Over the last two years, we've enhanced our investigative
responsive processes and Community Guidelines.\8\ Serious incidents
such as sexual assault are reviewed by our specialized team with an eye
towards a survivor-centric response, and our responses are developed
with guidance from advocates in this space. We give significant weight
to the statement given by a reporting party, as well as relevant facts
that our investigation may reveal, and take action in accordance with
the survivor's report and additional information we can collect through
this careful review process.
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\8\ Uber Technologies, Uber Community Guidelines, WWW.UBER.COM,
https://www.uber.com/legal/community-guidelines/us-can-en/.
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In addition, in partnership with RAINN, we created educational
videos that we send to riders and drivers if they are reported for
issues such as inappropriate comments or flirting.\9\
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\9\ Rape, Abuse & Incest National Network, RAINN--Uber, https://
www.rainn.org/uber.
Question 9. What is your specific protocol to follow up with
drivers who have been accused of harassment, assault, or violence? What
is your specific protocol to deactivate a driver?
Answer. As mentioned above, with any serious report of serious
sexual misconduct, we immediately remove the person in question's
access to the Uber app (i.e., rider or driver) while we review the
matter, which includes speaking with both the rider and driver
involved. We also work with police to support their investigation
through the appropriate process.
As mentioned above, we created a specialized team in 2017 to handle
more serious safety reports in an effort to implement targeted training
and improve how we support riders and drivers in these difficult
situations. We've elevated our training, designed a program centered on
victims so we can approach these situations with even greater care. The
types of incidents our team handles encompass a wide spectrum, and
therefore there is no ``one size fits all'' approach to dealing with
them.
We review each case individually based on the information available
to us. We give significant weight to the statement given by a reporting
party, as well as relevant facts that our investigation may reveal, and
take action in accordance with the survivor's report and additional
information we can collect. In serious cases, like reports of sexual
assault, Uber will permanently ban the account (driver or rider) based
on a single report whenever it's determined that the circumstances
warrant such action.
In addition, in partnership with RAINN, we created educational
videos that we send to riders and drivers if they are reported for
issues such as inappropriate comments or flirting.\10\
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\10\ Id.
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Driver and Passenger Verification:
Question 10. During his testimony, Congressman Smith informed the
Subcommittee that anyone can go online and purchase Uber signage to
place in their cars in order to appear as drivers. A quick search on
Amazon revealed several options of Uber signage and lighting for under
$10.
Does your company trademark the Uber signage and lighting features
drivers use in their cars when working?
Answer. Yes, Uber has filed for trademark protection for signage
and lighting features that Uber makes available to drivers for use in
their cars.
Question 11. If so, have you sought to enforce your trademark to
control who can sell or use these signs? If not trademarked, please
explain why.
Answer. Yes, Uber has enforced its trademark rights against those
who sell counterfeit signs and lights bearing Uber's trademark. Uber
has engaged the services of a vendor who seeks out such products being
sold on e-commerce platforms and submits requests to the platform
provider to remove the infringing products. This has resulted in the
removal of thousands of counterfeit products from the online
marketplace. Uber also reached out to the e-commerce platforms
individually to request that they provide assistance to affirmatively
block such product listings from going live in the first place.
Question 12. Do you require drivers to display signage in their
vehicles when providing rides? If so, what are the exact requirements,
where do drivers procure the signage from, and what oversight do you
conduct to ensure drivers are displaying the required signage
correctly?
Answer. Uber provides trade dress decals to drivers in all markets
where required by applicable law or regulation. All rideshare drivers
are required to comply with the regulations of the jurisdiction in
which they operate. In jurisdictions with trade dress requirements,
drivers may be subject to fines and other penalties for failure to
display trade dress.
Trade dress decals are only sent to drivers who have successfully
signed up with Uber after completing a background check, and shown that
they meet all applicable internal and regulatory requirements to drive
with Uber. Uber sends trade dress decals via direct mail to drivers'
home addresses, along with an informational bifold explaining how to
affix the trade dress decal in a compliant manner. In addition, Uber
provides drivers with information about the regulatory requirements of
each jurisdiction in which drivers operate, including any applicable
trade dress requirements.
Uber does not sell its trade dress decals or Uber beacon to anyone
on any platform and Uber's Terms of Service prohibit drivers from
selling trade dress. Further, every driver who signs up with Uber
agrees to comply with Uber's Community Guidelines, which state, in
part: \11\
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\11\ https://www.uber.com/legal/community-guidelines/us-can-en/
Never harm the business or brand by doing things like using
Uber`s trademark or intellectual property without permission.
Drivers should only use Uber trade dress that is distributed by
Uber. The use of unauthorized or third-party items--such as
lights, placards, signs or similar items bearing Uber's name or
trademark--may confuse riders who are trying to find their
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ride.
Question 13. Additionally, do you require drivers to verify that
the correct passenger has entered the car? If so, what is the process
required? If not, please explain why.
Answer. Uber has introduced new features to help improve and raise
the bar on safety for riders and drivers. For us, it starts with the
basics: getting in the right car. Matching riders to the correct ride
is essential to the core Uber service. Without a correct pairing,
riders would not reach their end destination, drivers could not earn
money through the Uber app, and Uber could not successfully connect the
16 million trips powered by our platform every day.
Uber encourages both drivers and riders to utilize the information
provided by the Uber app to ensure they are getting into the right
vehicle and picking up a confirmed passenger.\12\
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\12\ Wade Stormer, Check Your Ride. Every Time. Everywhere., Uber
Newsroom (July 23, 2019), https://www.uber.com/newsroom/check-your-
ride/
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As a rider, when an individual requests a trip through Uber, they
always get these key details that uniquely identify their ride: the
make and model of the car, the driver's photo, and the license plate.
If their driver arrives and does not match the information provided,
riders are asked to not get into the car and to notify Uber about the
issue. We can disable the driver's account immediately until the issue
is appropriately resolved.
Behind the steering wheel, Uber's real-time ID check feature
periodically asks the driver to take a selfie before being able to log
in to give rides.\13\ That selfie will be matched with the driver photo
on file. If the photos do not match, the person will not be allowed
access to the platform. Technologies like this can help ensure that the
driver using the app matches the account we have on file.
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\13\ https://www.theverge.com/2016/9/23/13030682/uber-driver-
selfie-facial-scan-fraud-security
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Moving forward, Uber has developed new technologies that will
continue to expand on these safety features, and set the standard for
the ridesharing industry: \14\
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\14\ Dara Khosrowshahi, An Operating System for Everyday Life, Uber
Newsroom (Sept. 27, 2019), https://www.uber.com/newsroom/everyday-life-
os/
RideCheck: In September 2019, Uber rolled out RideCheck
which is a technology that can detect a potential crash or an
unexpected long stop and then sends a proactive check-in to both the
rider and driver to offer assistance. Options are surfaced in the app
that provide quick access to key safety tools so riders and drivers can
take action and get the help that they may need.
Verify Your Ride: To make sure riders get in the right
car, they will soon be able to choose to receive a unique four-digit
PIN to verbally provide to their driver. The driver will only be able
to start the trip in the app once the correct PIN has been entered.
Moving forward, Uber is also developing new technology that uses
ultrasound waves to automatically verify the correct rider is in the
right car, with no PIN needed.
Improved Real-Time ID Check: In 2016, Uber announced
Real-Time ID Check, which helps ensure that the driver behind the wheel
matches the account in our system. We started with basic selfies, and
our most recent enhancement prompts a driver to perform a random series
of basic movements in real-time-blinking, smiling and/or turning their
head-to add another layer of security.
On-Trip Reporting: Riders no longer have to wait until
after they get out of the car to report a problem to Uber. Soon, riders
will see a ``Report Safety Incident'' option in their safety toolkit
(the blue shield icon) that will let them report a safety issue during
their trip. Uber's safety team will follow up after the trip. This is
part of our efforts to encourage reporting by multiple, convenient
channels for people to surface issues directly to Uber.
These new features build on the safety benefits that were already
part of our platform, including:
Designated Driver: Riders can push a button for a ride
and avoid drunk driving.\15\
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\15\ Uber Technologies, Impaired Driving--Community, WWW.UBER.COM,
https://www.uber.com/us/en/community/safety/drunk-driving-prevention/
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Driver/Car Information: Riders are given the driver's
name, photo, make and model of the car and license plate number when
they request a trip.
GPS Tracking: Each trip is GPS tracked so there is a
record of the trip and pertinent information is included on the receipt
and trip history. We are also able to share this information directly
with law enforcement to aid investigations where appropriate.
Share Trip Feature: Riders and drivers can share their
trip so friends and family are able to follow them on a map in real-
time, and know when they've arrived. Riders can also pre-program
contacts who they will be regularly prompted to share their trip with.
Cross-Street Feature: Riders can use cross-streets as
pick-up and drop-off locations for an added layer of privacy.
Two-Way Feedback: We have a two-way feedback system where
riders and drivers can rate each other and provide comments. Serious
issues that are reported are reviewed by our 24-7 support team.
Driver Hour Limits/Speed Alerts: We limit the number of
hours a driver can take trips on the app without going offline, and
drivers can set up in-app alerts if they are speeding.
Safety Toolkit: In May 2018, we centralized all key
safety information and features for riders and drivers into one place
in the Uber app. Riders can find safety tips and learn about driver
screenings, insurance and our Community Guidelines.
Question 14. How will you verify passengers when your vehicles are
autonomous and there is no driver? Is the proposed solution when you
utilize autonomous vehicles applicable to today's vehicles?
Answer. Our self-driving vehicles are still under development and,
where they are being tested on our test tracks and public roads, they
are being operated with trained safety drivers. We are not, at present,
offering rides to members of the public. When we offer rides to members
of the public, we anticipate relying on some of the same approaches we
use today, including providing the rider with the vehicle's license
plate number, make, model, and any other visible identifiers.
Currently, we are undertaking research on approaches to passenger
identify verification for our self-driving vehicles, including PIN
codes and in-cabin camera data.
Background Checks:
Question 15 (partial). During his testimony, Mr. Miller urged
Congress to require industry standardized fingerprint-based background
checks as part of any Federal contract awarded to TNCs. Uber has
actively opposed the use of fingerprint-based vetting.
Uber's comment. Uber conducts millions of rigorous criminal and
driving record screenings. While no background check is perfect, our
process is thorough, fair and relevant to the work in question. We are
always continuing to build and strengthen our screening process with
the guidance of our Safety Advisory Board, and by introducing
additional measures to improve safety.
Before a person is able to drive with Uber in the United
States,\16\ we complete a screening process that requires an
individual's full name, date of birth, social security number, driver's
license number, a copy of his or her driver's license, vehicle
registration, and vehicle insurance.
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\16\ In New York City, all drivers undergo the criminal portion of
Uber's background check process, as described in this response. Drivers
in New York City are licensed by the Taxi and Limousine Commission,
which also runs its own driving record and criminal history checks on
drivers.
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We work with Checkr, a third party background check provider
accredited by the Professional Background Screening Association. Checkr
runs a Social Security trace and checks the potential driver's driving
and criminal history in a series of national, state, and local
databases and court record repositories. These include the U.S.
Department of Justice National Sex Offender Public Website, the federal
PACER database, and several databases used to flag suspected
terrorists.
Upon identifying a potential criminal record, Checkr sends an
individual to review the record in-person at the relevant courthouse
or, if possible, pulls the record electronically. These screenings use
information that is maintained by national, state, and county level
authorities, whose processes may vary by jurisdiction. By verifying
potential criminal records at the source--the courthouse records--we
can help ensure that we are checking the most up-to-date records
available.
Beyond the initial screening, Uber proactively reruns criminal and
motor vehicle checks each year, regardless of whether there is a legal
obligation to do so. By conducting annual reruns everywhere in the
U.S., and expanding beyond jurisdictions where we are legally required,
we are committed to ensuring our screening standards are applied
consistently and continuously across the country.
Moreover, since July 2018, Uber has been among the first to invest
in screening technology that rapidly monitors and identifies new
criminal offenses through a number of data sources.\17\ As an extension
of Uber's screening process, this technology helps ensure there is
continuous reporting of new reviewable events that occur between
scheduled reruns. Consistent with our current criteria, if we are
notified of a new disqualifying criminal charge or conviction and the
driver no longer meets our standards or local requirements, the partner
will be blocked from the app. For disqualifying pending charges, the
driver will remain blocked from the app unless the charge is resolved.
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\17\ Dara Khosrowshahi, Getting serious about safety, Uber Newsroom
(Apr. 12, 2018), https://www.uber.com/newsroom/getting-serious-safety/
Question 15 (con't). Why do you oppose fingerprint-based background
checks for Uber drivers?
Answer. Fingerprint-based background checks should not be required
for a number of reasons. First, the FBI and state databases that are
utilized for fingerprint-based background checks have significant gaps
that reduce their efficacy and can lead to discriminatory outcomes for
communities of color. Second, as explained above, the process that Uber
currently uses is thorough, fair, and relevant to the work in question.
The FBI maintains a centralized repository--the Interstate
Identification Index (``III'')--to facilitate the sharing of criminal
history among states. The III houses federal criminal history
information as well as state criminal history information that the
individual states voluntarily report to the FBI. The III and similar
state-level repositories generate ``rap sheets,'' which are meant to
summarize an individual's criminal history. There are several
structural flaws with the III and state repositories that make them
incomplete and inaccurate sources. First, the repositories are often
missing final disposition information (i.e., whether an arrest resulted
in a conviction, acquittal, or something else). The federal repository
is missing disposition data for about 50% of its arrest records.\18\
And state repositories do not fare much better. In fact, a 2016 Survey
compiled by SEARCH--the national consortium for justice information and
statistics--shows that 30 states self-reported that less than 80% of
arrests in their state repositories have final dispositions and 17
states had less than 60%. Some states register well below 50%,
including Mississippi (14%), Louisiana (20%), and Colorado (21%).\19\
---------------------------------------------------------------------------
\18\ See Ellen Nakashima, FBI wants to exempt its huge fingerprint
and photo database from privacy protections, Wash. Post, June 1, 2016,
https://www.washingtonpost.com/world/national-
security/fbi-wants-to-exempt-its-huge-fingerprint-and-photo-database-
from-privacy-protections/
2016/05/31/6c1cda04-244b-11e6-8690-f14ca9de2972_story.html (reporting
that the FBI's figures show that 51 percent of all arrests in FBI
repository lack final disposition data).
\19\ U.S. Dep't of Justice, Bureau of Justice Statistics, Survey of
State Criminal History Information Systems, 2016, Table 1, https://
www.ncjrs.gov/pdffiles1/bjs/grants/251516.pdf; California State
Auditor, California Department of Social Services: Its Caregiver
Background Check Bureau Lacks Criminal History Information It Needs to
Protect Vulnerable Populations in Licensed Care Facilities, Report
2016-126, March 2017, at 43, https://www.auditor.ca.gov/pdfs/reports/
2016-126.pdf (finding that California Department of Justice is
missingdisposition reports for up to 40% of arrest records).
---------------------------------------------------------------------------
Because of this gap, the entities that use fingerprint-based
background checks to evaluate for-hire drivers often rely on rap sheets
that show an arrest event without corresponding disposition information
on whether the individual was ultimately convicted or acquitted. As the
FBI stated in a 2016 report, ``gaps in disposition reporting . . .
negatively impact the quality of information shared for employment and
licensing adjudications.'' \20\ While licensing agencies have different
processes for evaluating applicants with an incomplete criminal history
report, we are aware of at least some for-hire driver licensure bodies
that put the onus on the applicant with an incomplete rap sheet to
obtain a certified court record or other evidence showing they were not
convicted.
---------------------------------------------------------------------------
\20\ FBI, Disposition Task Force Best Practices Guide, Preliminary
Findings, April 2016, https://www.fbi.gov/file-repository/
disporev04082016tagged.pdf/view, at 1.
---------------------------------------------------------------------------
Obtaining a record to show that an arrest did not lead to a
conviction--in other words, to prove their innocence--often requires
traveling to a courthouse or arresting agency in another county or
state.\21\ And if an arrest did not result in charges, there is likely
no court record available; in that instance, the individual must seek
the record from a prosecutor's office or police department or file a
motion to expunge the entry on their rap sheet.\22\ These additional
barriers are problematic for anyone. However, they are particularly
problematic for minority communities--especially the African-American
community--whose members are arrested at rates far greater than their
representation in the general population.\23\ As former Attorney
General Eric Holder stated in a 2016 letter to Chicago officials
considering a fingerprint background check proposal for TNC drivers:
---------------------------------------------------------------------------
\21\ Madeline Neighly & Maurice Emsell, National Employment Law
Record, Wanted: Accurate FBI Background Checks for Employment, July
2013, https://s27147.pcdn.co/wp-content/uploads/
2015/02/Report-Wanted-Accurate-FBI-Background-Checks-Employment-1.pdf
at 18.
\22\ U.S. Dept. of Justice, Bureau of Justice Statistics, Improving
Access to and Integrity of Criminal History Records (July 2005), at 15,
https://www.bjs.gov/content/pub/pdf/iaichr.pdf.
\23\ Brad Heath, Racial Gap in U.S. Arrest Rates: `Staggering
Disparity', USA Today (Nov. 19, 2014), https://www.usatoday.com/story/
news/nation/2014/11/18/ferguson-black-arrest-rates/
19043207/ (reporting on 2014 study on 70 police departments across the
United States that found that African-Americans are arrested at a rate
ten times higher than those who are not African-American).
Requiring fingerprint-based background checks for non-law
enforcement purposes can have a discriminatory impact on
communities of color. With nearly 50% of African-American men
and 44% of Latino men arrested by age 23 nationwide, the
practice of denying work based on law enforcement records with
incomplete and inaccurate information disproportionately
disadvantages people who have been arrested.\24\
---------------------------------------------------------------------------
\24\ Letter from Eric Holder to Alderman Anthony Beale, (June 2,
2016), https://suntimesmedia.files.wordpress.com/2016/06/letter-to-
alderman-beale-june-2-2016.pdf.
Congressional leaders have also raised concerns about using
information from the FBI III for employment and licensing decisions.
Specifically, in June 2015, Senators Leahy and Grassley wrote FBI
leadership expressing their concern that employment and licensing
decisions were based on a criminal history repository that was missing
disposition information for 50% of arrest records, stating that it
``unfairly penalize[s] current or prospective workers.'' \25\
---------------------------------------------------------------------------
\25\ Letter from Sens. Patrick Leahy & Charles E. Grassley to Hon.
James B. Comey, FBI Director (June 26, 2015), https://
www.judiciary.senate.gov/imo/media/doc/2015-06-26%20CEG,
%20Leahy%20to%20FBI%20(Criminal%20History%20Record%20Information).pdf.
---------------------------------------------------------------------------
A second structural flaw with the repositories used for
fingerprint-based background checks is that they are missing some
criminal events altogether. One reason is that these repositories
typically only capture custodial arrest events, which are initiated
with a booking and fingerprinting. Non-custodial arrests (i.e., arrests
initiated through citations, summons, warrants, and indictments) often
do not make it into the repositories or, if they do, not until years
later. This issue has very significant practical consequences. For
example, as of late 2018, the Commonwealth of Virginia's state
repository was missing more than 750,000 records, including more than
300 murder convictions, 1,300 rape convictions, and 4,600 felony
assault convictions.\26\ These issues are not unique to Virginia; they
are prevalent in other state repositories.\27\ And since the FBI III
repository is based, in part, on state repository data, this issue also
infects the III.
---------------------------------------------------------------------------
\26\ Tom Jackman, Va. Criminal database missing 750,000 cases used
for gun and background checks, crime scene investigations, Wash. Post
(Oct. 28, 2018), https://www.washingtonpost.com/crime-law/2018/10/28/
va-criminal-database-missing-cases-used-gun-background-checks-crime-
scene-investigations/.
\27\ U.S. Gov't Accountability Office, Criminal History Records:
Additional Actions Could Enhance the Completeness of Records Used for
Employment-Related Background Checks, GAO-15-162, https://www.gao.gov/
assets/670/668505.pdf at 21 (finding that 1.6 million dispositions in
one audited state could not be linked to an arrest because fingerprints
were not captured); Jeffrey Benzing, Pennsylvania Police Fail to
Fingerprint Thousands of Suspect Criminals, Public Source (June 29,
2014), https://www.publicsource.org/pennsylvania-police-fail-to-
fingerprint-thousands-
of-suspected-criminals/ (reporting that more than a dozen Pennsylvania
counties were missing fingerprints in at least 20% of cases); Jennifer
Sullivan, State Database Missing Some Criminal Information Used in
Background Checks, Seattle Times (June 15, 2015), https://
www.seattletimes.com/seattle-news/crime/state-database-missing-some-
criminal-information-used-in-background-checks/ (30% of records missing
in Washington repository due to missing fingerprints, including DUIs,
homicides, and rapes); U.S. Department of Justice, Bureau of Justice
Statistics, supra n. 19 at 20 (noting that ``[t]hirteen states cite and
release individuals without fingerprinting for all criminal offenses,
including felonies'').
---------------------------------------------------------------------------
Over the past five years, over 100 cities, counties, and states
have enacted laws governing TNC service. Many of these jurisdictions
evaluated whether they should require TNC drivers to undergo
fingerprint-based background checks and concluded that they should not.
In particular, we call your attention to the proceedings conducted by
the Maryland Public Service Commission in 2016 and the California
Public Utilities Commission in 2017. The Maryland PSC conducted a
three-month proceeding, with a multi-day hearing in which it heard from
law enforcement, academic, industry, and background check experts. At
the end of the proceeding, the PSC declined to impose a fingerprint
background check requirement on TNC drivers, finding that Uber's
process (as stipulated in the PSC's Order) was as ``comprehensive and
accurate'' as the fingerprint background check process.\28\ The
California PUC similarly declined to require TNC drivers to undergo
fingerprint-based background checks after finding that fingerprint
checks would not add a ``demonstratively greater level of safety.''
\29\
---------------------------------------------------------------------------
\28\ In the Matter of Rasier, LLC and Lyft, Inc., Case No. 9425,
Order No. 87957 (Md. PSC 2016) (case docket available at https://
www.psc.state.md.us/).
\29\ Decision on Phase III.B. Issue: Criminal Background Checks For
Transportation Network Company Drivers, Rulemaking 12-12-011, Decision
17-11-010 (Cal. PUC Nov. 13, 2017), http://docs.cpuc.ca.gov/
PublishedDocs/Published/G000/M199/K073/199073743.pdf, at 23.
---------------------------------------------------------------------------
Finally, we wish to respond to one point that Paul Miller of
Transportation Alliance made at the October 16th hearing. According to
Mr. Miller, ``name-based background checks are 43 times more likely to
have errors than fingerprint-based checks.'' Mr. Miller bases this
statement on a report prepared by taxi industry-affiliated advocates
titled ``One Standard For All,'' which in turn cites congressional
testimony about a 2007 audit finding that the TSA's Terrorist Watchlist
database had a 43% false positive rate. But the congressional testimony
cited by the taxi industry advocates made clear that the high error
rate was caused by data errors and other issues unique to the watch
list database.\30\ This testimony does not in any way support a
sweeping claim that name-based background checks are 43 times more
error prone.
---------------------------------------------------------------------------
\30\ The Progress and Pitfalls of the Terrorist Watch List, Field
Hearing before the H. Comm. on Homeland Sec., 110th Cong., 110-84
(2007) (Stmt. of Glenn Fine), https://www.govinfo.gov/content/pkg/CHRG-
110hhrg48979/html/CHRG-110hhrg48979.htm.
Question 16. How much has your company spent on lobbying activities
to oppose local initiatives to require fingerprint-based background
checks by police, such as in Austin, TX?
Answer. Uber contributed approximately $7.5 million to Ridesharing
Works for Austin in 2016. Ridesharing Works for Austin was a political
committee that supported a ballot measure opposing an Austin ordinance
that required TNC drivers to undergo a fingerprint-based background
check on top of other onerous regulations. That ballot measure failed.
Uber is not able to compile a figure for its political-related
spending on efforts to oppose fingerprint-based background checks
throughout the U.S. Under local and state lobbying reporting regimes,
Uber is not typically required to itemize the amount it spends lobbying
on legislative or regulatory proposals for fingerprint-based background
checks. To the extent Uber is required to itemize the legislation or
regulation it lobbies for or against, fingerprint-based background
checks have often been part of broader legislative or regulatory
packages, which means Uber has generally not specifically itemized
lobbying activity related to fingerprint-based background checks as
part of its lobbying disclosure reports.
Question 17. How much do the third-party background checks you
currently utilize cost?
Answer. This information is proprietary and commercially sensitive
information. We would be happy to work with the Committee to provide
this information in a format that ensure it remains confidential.
Uber's opposition to fingerprint-based background checks is not based
on the cost of those checks.
Question 18. How much does a comprehensive fingerprint-based
background check cost?
Answer. The cost of collecting and processing fingerprints can vary
as processing often includes a state fee and a federal fee.
Question 19. Would the cost of fingerprint-based background checks
for every Uber driver currently operating in Austin be greater or less
than the amount you paid for lobbying activities in Austin to oppose
the regulation?
Answer. It appears that the cost to procure a fingerprint-based
background check in Austin, Texas is $25.\31\ The cost for all drivers
in Austin to receive a fingerprint-based background check would be less
than the amount Uber paid for lobbying activities to oppose the
regulation. Uber's opposition to fingerprint-based background checks,
however, is not based on the cost of those checks.
---------------------------------------------------------------------------
\31\ Texas Dep't of Pub. Safety Crime Records Serv., Access &
Dissemination Bureau, Procedure for Review of Personal Criminal History
Record Information, WWW.DPS.TEXAS.GOV, https://www.dps.texas.gov/
internetforms/forms/cr-63.pdf.
Question 20. What specifically do the third-party background checks
you utilize cover, and what specifically is not included that is
covered in a fingerprint-based check?
Answer. Please see above for an explanation of our background check
process. The third-party background check that Uber utilizes does not
include a fingerprint component. In addition, neither Uber nor its
background check vendor are authorized to access the FBI's arrest-based
repository, which is described in Answer 15 above.
Driver Wages:
Question 21. Several Members raised the issue of employee
classification and driver wages at the hearing. In his testimony, AFL-
CIO Transportation Trades Department President Larry Willis stated that
many drivers who work for ride hailing companies make less than the
minimum wage of the city they are operating in. Your company's own
estimates claim that Uber drivers make an average of closer to $20 per
hour.
Are your average reported wages of nearly $20 per hour net of any
expenses a driver is responsible for under your business model? Please
provide a list to the Committee of all expenses, such as vehicle
maintenance and fuel, for which Uber drivers are responsible, as well
as an itemized list of fees your company collects from driver fares.
Answer. Uber wants to help drivers make informed choices, which is
why we provide information to drivers about when and where are the
busiest times and places to drive--with the goal of helping drivers
maximize the amount of time they have a paying rider. For example, the
app shows a Demand Heatmap of busy areas; however, drivers are under no
obligation to act on this information.
Drivers who earn money by using Uber platform are responsible for
the costs of operating their ridesharing business. These will vary by
driver, and how they choose to use Uber (including whether to use a
vehicle they already own, whether to buy, rent or lease a vehicle,
etc). Someone driving a hybrid vehicle will likely incur lower fuel
costs than someone with an SUV. Drivers may also incur additional costs
in the course of running their business (e.g., parking tickets, cell
phone expenses, optional `rideshare insurance') but it's worth noting
that Uber does not have visibility into these expenses. In some cities
or states, there may also be additional regulatory expenses, such as
licensing fees.
While it's true that these costs are borne by drivers, many of the
costs are tax deductible. Uber provides information to drivers about
their tax options and provides a tax summary that includes how many
miles they have driven while online with Uber.\32\
---------------------------------------------------------------------------
\32\ Uber Technologies, Tax Documents for Driver-Partners,
WWW.UBER.COM, https://www.uber.com/us/en/drive/tax-information/tax-
documents/.
---------------------------------------------------------------------------
Uber also seeks to help drivers minimize their costs by partnering
with third parties that provide discounts to drivers. For example,
drivers can receive up to 6.5% cash back on gas purchases at Exxon and
Mobil stations, and 25% off car maintenance with Car Advise.\33\ And
Uber has partnered with TurboTax to offer drivers free filing and
discounts on other services.\34\
---------------------------------------------------------------------------
\33\ Uber Technologies, Uber Pro Beta Terms and Conditions (August
1, 2019), https://www.uber.com/legal/rewards-program/uberpro/us-en/
\34\ Uber Technologies, Free and easy filing with Turbo Tax,
WWW.UBER.COM, https://www.uber.com/us/en/drive/tax-information/
turbotax-partnership/.
---------------------------------------------------------------------------
There are third-party estimates of the costs of driving. For
example, prominent ridesharing blogger The Rideshare Guy calculates the
cost per mile of driving at $0.195 for someone who owns a Toyota Prius
driving in San Diego, comprising per mile expenses of: \35\
---------------------------------------------------------------------------
\35\ Harry Campbell, How to Calculate Per Mile Earnings Instead of
Per Hour (Feb. 20, 2017), https://therideshareguy.com/how-to-calculate-
per-mile-earnings-instead-of-per-hour/
Depreciation = $0.061
AAA maintenance estimate = $0.06
AAA tire estimate = $0.01
Gas = $0.064
Drivers pay Uber a service fee, which varies from trip to trip.
It's the difference between what a rider pays and what a driver earns
on a trip, excluding tips, tolls, fees (including the booking fee),
driver promotions, taxes, and surcharges. Uber's service fee varies in
order to make upfront pricing work. Upfront pricing for riders is based
in part on the estimated time and distance of the trip, but drivers
earn based on actual time and distance. The service fee is lower if the
trip takes longer than predicted. The same is true for Uber Pool if
fewer riders than expected share the trip. Drivers still earn for the
actual time and distance they drive, regardless of the rider price. To
keep these commitments to riders and drivers, the Uber service fee
varies from trip to trip.\36\
---------------------------------------------------------------------------
\36\ Uber also notes that it collects several additional fees from
drivers, which are paid 100% from riders and thereforedo not affect
driver earnings. For example, riders pay a booking fee, which Uber
retains.
---------------------------------------------------------------------------
Drivers earn a fare from riders for every trip they complete. Fares
are based on preset rates for time and distance. These fares vary by
city and product (e.g., UberX, Uber Black) and are visible to drivers
at partners.uber.com. Drivers may also receive from riders: tips,
reimbursements for tolls, and additional fees for long wait times or
long pickups. Additionally, drivers may earn extra through promotions
like Quest (e.g., Complete 20 trips a week, earn an extra $50), as well
as surge pricing, which is dictated by marketplace activity and
consequently occurs in times and locations where demand is higher.
Drivers can see their earnings for each trip,\37\ as well as daily and
weekly summaries both in the app and online.\38\
---------------------------------------------------------------------------
\37\ Uber Technologies, How much can drivers make with Uber,
https://www.uber.com/us/en/drive/how-much-drivers-make/.
\38\ Id.
---------------------------------------------------------------------------
A 2019 study by economists at Stanford University, using internal
Uber data from January 2015 to March 2017, found that the median active
driver on Uber received gross earnings of $21 per hour spent on the
Uber app.\39\ This is the amount earned before subtracting the service
fee that drivers pay to Uber, as well as any expenses drivers incur,
such as fuel and vehicle maintenance as discussed in more detail below.
---------------------------------------------------------------------------
\39\ Cody Cook et al., The Gender Earnings Gap in the Gig Economy:
Evidence from over a Million Rideshare Drivers (2018), https://
web.stanford.edu/ diamondr/UberPayGap.pdf.
---------------------------------------------------------------------------
A 2018 survey of 1200 ridesharing drivers by the Rideshare Guy, a
prominent TNC blogger, found average hourly earnings after Uber's
service fee, but before other costs, of $16.90 per hour.\40\
---------------------------------------------------------------------------
\40\ Harry Campbell, 2018 Uber and Lyft Driver Survey Results--The
Rideshare Guy (Feb. 26, 2018), https://therideshareguy.com/2018-uber-
and-lyft-driver-survey-results-the-rideshare-guy/
---------------------------------------------------------------------------
Earnings vary significantly by region and are generally correlated
with driver's business choices, local wages, and the cost of living.
When comparing ridesharing earnings to alternative work options or
minimum wages, it is more appropriate to look at average hourly
earnings in a specific city, as a study conducted by Princeton
Professor Alan Krueger does.\41\
---------------------------------------------------------------------------
\41\ Cook, supra n. 39.
---------------------------------------------------------------------------
It is also important to note that using all time online when
calculating hourly earnings may underestimate earnings by overstating
what is counted as `working time'. There are three components to time
online with Uber: time logged into the app before a trip request has
been sent or accepted (`period 1'), time having accepted a trip request
and while en route to pick up a rider (`period 2'), and time with a
rider on trip (`period 3'). It is important to consider that,
typically, period 3 is the only time in which a driver is earning. When
online (i.e., in period 1), drivers have no obligation to take a trip
and may never even receive a trip request if there are no riders
looking for rides in their area; they can also unilaterally choose to
ignore or reject trips offered to them. They may be at home, doing
other work, logged into or taking a trip through another app, or on a
personal trip across town while driving with the Uber app on.
Similarly, as a traditional worker may commute to their job, and is not
compensated for doing so, an independent driver on Uber may leave the
app on while `commuting' to where they want to drive.
Classification:
Question 22. In the lawsuit Jessica Harris v Uber, your defense
argued that Uber is not a transportation company, but rather a
technology company with independent contractors.
If every driver on your platform quit tomorrow, how would you
continue to provide service for your customers?
Answer. Uber Technologies, Inc. is a technology company that
creates technology-based marketplaces connecting marketplace actors in
a variety of sectors. The Uber Eats technology connects restaurants
with independent couriers able to deliver food to eaters. Uber Freight
technology connects companies with freight shipments to independent
truck drivers. Uber Elevate is developing innovative aviation
technologies to facilitate the aerial delivery of goods and people in
urban environments. Uber's Advanced Technologies Group is developing
self-driving vehicle technology and software. JUMP technology connects
people to electric bike and scooter rentals in cities around the globe.
In all of these businesses, Uber is developing innovative technology to
help facilitate the movement of people and goods.
Uber's ridesharing software creates a marketplace that is relied
upon by two distinct groups. If every driver stopped using the Uber
ridesharing platform tomorrow, riders would not be able to connect with
drivers through the Uber app. Similarly, if all riders stopped using
the Uber platform tomorrow, drivers would no longer be able to provide
their ride services to any riders through the Uber app. This is the
bilateral nature of all marketplaces, including technology-driven
marketplace platforms (e.g., eBay, Etsy, Craigslist, Airbnb).
Question 23. If your business model is dependent on drivers
generating a profit from ride hailing services, how do you justify
classifying drivers as independent from your company?
Answer. It is common for marketplaces to derive revenue from
transactions executed in the marketplace, including where the issue of
employment is not controversial. For example, eBay charges sellers
``final value fees'' which are calculated as a percentage of the value
of the item's sale. Etsy has a similar fee arrangement for sellers
engaging in its marketplace. Similarly, Uber charges drivers a per-
transaction service fee in exchange for a driver's use of Uber's
technology-based marketplace.
There are many reasons why drivers are classified as independent
and not employees of Uber. Drivers unilaterally choose if, when, where
and how to use the Uber app. There is no exclusivity, and many drivers
find customers through multiple apps or offline dispatchers. There is
no quality application process. There is no minimum commitment or
obligation to work or to connect to the Uber app, and there are no
required schedules or management. In the United States, 45% of drivers
spend less than 10 hours per week on Uber. During the rest of their
active time, they may be using other ridesharing applications, or
engaging in work via other means.
Independence is not only the ability to choose if and when to work.
It is also the freedom to change those decisions in real time.
Individuals using Uber can log in and out of the app to suit their
preferences or to adapt to unforeseen circumstances, like picking up a
sick child from school. A 2019 study indicates that the value derived
from such flexibility is quantifiable and the real-time adaptability is
particularly valued by drivers.\42\ A 2018 survey conducted by
prominent blogger The Rideshare Guy found that 75% of drivers do not
want to be classified as employees, and prefer being independent
contractors.\43\ In fact, several previous rulings have found that
drivers' work is outside the usual course of Uber's business, which is
serving as a technology platform for several different types of digital
marketplaces.\44\
---------------------------------------------------------------------------
\42\ M Keith Chen et al., The Value of Flexible Work: Evidence from
Uber Drivers. Technical report, Nat'l Bureau of Econ. Research (2017),
available at https://www.nber.org/papers/w23296
\43\ Harry Campbell, 2018 Uber and Lyft Driver Survey Results--The
Rideshare Guy (Feb. 26, 2018), https://therideshareguy.com/2018-uber-
and-lyft-driver-survey-results-the-rideshare-guy/
\44\ Eisenberg v. Uber Technologies, Inc., No. BS166561 (Cal. Sup.
Ct. Feb. 21, 2017) (order granting petition to confirm arbitration
award); Gollnick v. Uber Technologies, Inc., No. CGC-15-547878 (Cal.
Sup. Ct. Oct. 10, 2017) (notice of entry of order granting petition to
confirm arbitration award); Dorr v. Uber Technologies, Inc., No.
BS172342 (Cal. Sup. Ct. Mar. 9, 2018) (order granting petition to
confirm arbitration award); Biafore v. Uber Technologies, Inc., No.
BS172429 (Cal. Sup. Ct. Jul. 11, 2018) (notice of entry of order
granting petition to confirm arbitration award).
---------------------------------------------------------------------------
Transit Partnerships:
Question 24. At the hearing, Mr. Willis noted that according to
Uber's public filings, Uber is seeking new revenue streams, including
partnerships with public transportation agencies.
What specific types of partnerships does the company envision with
public transit agencies? Does this go beyond providing first mile/last
mile service, paratransit, or late-night service? Are you seeking
Federal transit funds to provide these services?
Answer. Over the last several years, Uber has recognized that
technology can increase the effectiveness of public transportation.
Uber has built lasting partnerships with public transportation agencies
around the country and demonstrated how the use of Uber's technology
can reduce operational costs, extend the reach of transit, and improve
service for all riders, including those with disabilities.\45\ From
contracting with the Massachusetts Bay Transportation Authority (MBTA)
to create a technology platform for on-demand paratransit service in
Boston; \46\ to working with Pinellas County, Florida (PSTA) to create
a technology platform to reach areas traditionally out of reach to
conventional transit; \47\ to collaborating with Denver's Regional
Transit District (RTD) to integrate public transit journey planning and
payment options directly through the Uber app,\48\ each partnership
puts public transportation at its core to incentivize multimodal trips
and to reduce the current dependency on private vehicles.
---------------------------------------------------------------------------
\45\ Uber Technologies, Partnering with Transit Systems,
WWW.UBER.COM, https://www.uber.com/us/en/community/supporting-cities/
transit/.
\46\ Mass. Bay Transp. Auth., On-Demand Paratransit Pilot Program,
WWW.MBTA.COM, https://www.mbta.com/accessibility/the-ride/on-demand-
pilot.
\47\ Pinellas Suncoast Transit Auth., Direct Connect, WWW.PSTA.NET,
https://www.psta.net/riding-psta/direct-connect/.
\48\ Regional Transportation District, Uber Collaboration--RTD-
Denver, WWW.RTD-DENVER.COM, https://www.rtd-denver.com/projects/uber-
collaboration.
---------------------------------------------------------------------------
These engagements and integrations are representative of what part
of Uber's technology facilitates: expanding transportation access and
providing riders and drivers with the best options available for every
journey. For many trips, taking public transportation is faster and
cheaper than any other form of travel, and we want to give riders a
seamless way to access that option within our app. Through our
technology, Uber is helping to bring historical transit systems into
the future by exposing transit systems to potentially new riders via
our app and helping customers more easily take the train or bus. And
we've already seen real-world progress.
Uber's journey planning feature, which enables riders to see many
options--including public transit--in one place, has already helped
nearly half a million riders complete a transit trip using the Uber
app.\49\ Given these positive trends, Uber plans to launch transit
journey planning in ten more cities by the end of 2019, doubling our
current number of cities. These encouraging numbers also extend to our
transit payment integration partnerships, which provide Uber riders the
ability to purchase their transit ticket in the Uber app. To date,
Uber's ticketing option in Denver has sold over 12,000 tickets for the
city's transit system, with 55% of users continuing to purchase their
tickets via Uber the month following their first in-app purchase.\50\
---------------------------------------------------------------------------
\49\ Joe Rubino, Uber and Lyft have made Denver a testing ground,
The Denver Post, Sept. 11, 2019, https://www.denverpost.com/2019/09/11/
uber-lyft-denver-testing-ground/
\50\ Carolyn Said, Uber adds public transit to Bay Area app, San
Francisco Chronicle, Sept. 26, 2019, https://www.sfchronicle.com/
business/article/Uber-adds-public-transit-to-Bay-Area-app-
14469895.php
---------------------------------------------------------------------------
Moving forward, as the growing trends of mass urbanization and new
shared mobility services continue to change cities' transportation
landscapes, we aim to expand on our existing partnerships with public
transit agencies by introducing multimodal trips--a combination of
ridesharing, electric bikes and electric scooters, and public
transportation--to create an optimal route for a consumer that can be
more affordable than routes that do not incorporate public
transportation.
The federal government has long played a leading role in improving
transportation efficiency by promoting agile, responsive, accessible,
and seamless multimodal service inclusive of transit through enabling
technologies and innovative partnerships. Through its successful
Mobility on Demand (MOD) Sandbox Demonstration program, the Federal
Transit Administration (FTA) has revealed that innovations in shared
mobility and mobility on demand can increase transportation
effectiveness by ensuring that transit is fully integrated and a vital
element of a regional transport network that provides consistent,
reliable and accessible service to every traveler. Of the eleven
initial grant winners, TNCs--including Uber--were partners in nine of
the projects, indicating that transit agencies are increasingly
contracting with TNCs to help facilitate first-and last-mile service to
core transit routes, to connect on-demand paratransit access, to expand
service to the community during time periods when it is less efficient
to run fixed route transit, and to increase demand response options.
To date, the MOD Sandbox Program and the recently-announced
Integrated Mobility Innovation (IMI) Program are the only sources of
federal funding Uber has utilized, or applied for, to demonstrate how
our technology can complement, expand, and improve existing public
transportation operations. We hope to continue our work with Congress
and the Federal Transit Administration (FTA) to build upon these
programs to facilitate the widespread deployment of proven mobility
solutions that expand personal mobility for all travelers.
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