Petition for Waivers and Variances Memorandum

Standard

Mailed to Transportation Director Avelino Gutierrez and Sen. Cisco McSorley

Re:      Restoring Adequate Taxi Service
Petition for Waivers and Variances

Continue reading

Advertisements

How to Beat, or at Least Compete With, UBER

Standard

The Motor Carrier Act regulates ‘passenger carriers’ for public safety and ‘adequate’ service. However, under both Articles 3 and 7 regulations for ‘rideshare’ apps and taxis, service is ‘inadequate.’
Both TNC’s and Taxis Inadequate Within Each Business Model
Lyft and Uber [TNC’s] are limited to Smartphone app credit card customers and cannot service cash and landline business.
On the other hand, the 2013 NM legislature ‘broke up’ the two state-regulated taxi monopolies, but now none of the resulting five (or six) smaller fleets are large enough to service the Albuquerque-Rio Rancho territory. Service times are often ’45 minutes to Never.’ Customers complain their phone calls ring without being answered. Customers, frustrated with vague promises of service, order from multiple companies, taking two or three taxis ‘out of service’ for one call.
Google ‘taxi albuquerque’ and there are two dozen listings, plus a dozen for Rio Rancho. (See Exhibit A)
The problem is there are only five cab companies for Albuquerque and one based in Rio Rancho. Confusing? You bet! This letter addresses that problem as well as suggesting how certified taxi companies can compete with Uber.
Improving Taxi Service So That All are Adequately Served
As mentioned above, Uber can’t take calls from landlines or from cash customers; that business is left to taxis. We can’t fight Uber and changing the law is burdensome in time and money. So, only alternative is how to help taxis reach the same level of service as Uber for their market.
While the TNC Act, codified in §7 of the Motor Carrier Act (NM Stat § 65-7-7 (2016))
specifically denies the NMPRC jurisdiction, Uber and Lyft are operating under bare-bones regulation and rules. Except for insurance and a $10,000 annual fee, TNC’s are essentially unregulated.
The disparity begs the question of constitutional ‘equal protection’ violations voiding the TNC Act (See Exhibit B), Supremacy Clause pre-emption , and Uber (its app permitting crossing of state lines) blatantly ignoring Federal Motor Carrier Safety Rules.
I cannot predict the result of a 14th Amendment ‘equal protection’ challenge to the TNC Act (NMSA Ch 65 §7), but a safer solution is selective deregulation of taxi rules and regulations ‘in the public interest’ through waivers and variances.
Waivers and Variances
The technology exists, an Interactive GPS Map that can be linked through any taxi website and dispatch office. That technology will improve service five ways:
1) Proximity Dispatch Logistics assigns the taxi closest to the customer, increasing efficiency.
2) Customers who visit or are directed to the website(s) can use the Interactive Map to call the closest cab driver directly, without going through a dispatch office.
3) All taxi companies tracked on one map will make five ineffective small companies as efficient as one large company.
4) Customers who call the closest driver will get a ‘verbal contract’ for service, and not be tempted to call multiple companies.
5) As customers find or are redirected to the website, by advertising, telephone hold messages, and by the drivers themselves, traditional telephone dispatch offices will become more efficient and provide better service. More simply put, if a customer doesn’t want to be put on hold, or wants to talk to the driver, they have the option to use the Interactive GPS Map.
Conclusion:
If taxi companies can operate with the same logistics as Uber, they can compete while providing equal service to landline, business, and cash customers.
Legal Issue
Personal cars used as ‘taxis’ is possible under the ‘lease of certificate’ rule, as confirmed by former Director of Transportation Ryan Jerman.

How to Challenge Uber without Legislation or Litigation
Uber’s TNC Act and the Motor Carrier Act are both codified under Chapter 65 (NMSA). However, it is unconstitutional for two similar services (transportation of persons) to be regulated by different laws. That is a violation of the NM Constitution, §18 equal protection clause.
Does the state legislature have a legitimate interest and over-riding constitutional policy that permits such disparities between Articles 3 and 7? No.
The 2016 Transportation Network Services Act created a deregulated taxi and limo service in direct conflict with existing Motor Carrier Act rules; the rationality for permitting unvetted drivers and uninspected vehicles to operate as commercial carriers of passengers being a popular ‘ridesharing’ app. That app was so popular, and the rides so cheap in comparison to taxis, that the state ‘shelved’ enforcement of Motor Carrier safety regulations and let Uber drivers operate uninsured for two years.

One Year Later: How Driving for Rideshares Really Works

Standard

Customers love Rideshare, especially since 2015 when Uber dropped its rates by half to 85 cents/mile.

Now, some drivers enthusiastic with the old rates traded in their old cars for new ones. With monthly payments and higher insurance, they either had to drive more hours or have their cars repossessed.

So, there is your driver bending over backwards to get that 5-Star rating (below 4.6 and he gets fired), but how much is he really making?

Using figures from September, 2017 (Uber only became ‘legal’ in New Mexico March of 2016), I drove about 60 hours and was paid $1264.36. Uber didn’t add a tipping option until August, but I make a little more than most drivers as I can accept Uber XL requests, which pays 3X that of Uber X. However, they are only a small fraction of requests.

Correcting the four pay periods for 4.4 weeks, let’s call it $1389, or $23/hour.

Subtract $362 in gas, and I am down to $17/hour.

However, what about ‘real’ deductions such as mileage depreciation, brakes, tires, oil, and ‘gap’ insurance (Uber’s insurance has holes in it, and your personal auto insurer requires a supplemental Commercial policy, for me about $66/month.)

That is $1389-$362 and in addition minus $414 for average maintenance costs and 7 cents/mile depreciation in resale. Now I am at $10/hour, or about minimum wage.

An Uber X driver proudly showed off his $1100 paycheck from Uber, which he made over 87 hours. However, once applying deductions . . . his depreciation at 5 cents/mile, he only made $6.60/mile.  That is way less than minimum wage.

How about using the Federal Standard Mileage Deduction on your 1040?

In my case, for the month of September, I show a loss of $97. My estimate for 2017 is a net profit of $2000, or $2.75/hour . . . but that includes tips and some really big XL runs that paid out $1.43/mile compared to Uber X’s 63 cents.

$2.75 per hour . . . luckily, thanks to low maintenance costs and having a vehicle that holds resale value (top-of-the-line Ford Expedition) I actually made about minimum wage . . . and tips were less than 5% of the total fares . . . tips would really make a big difference, but from its beginning, Uber discouraged tipping.

In fact, they hid the ‘tipping option’ on the Rating Page. Only 1 in 4 passengers bother to take the time to ‘rate’ the driver, so . . . about 1 in 20 Uber customers bother to tip.

Why should they? With about 200 drivers using the Uber app, they will probably never see that driver again.

What about Lyft? Lyft ‘fired’ me for refusing calls so far away I had to burn a gallon of gas just to make the pickup. At an average income of $7/ride, the $2/gallon expense didn’t make economic sense . . . and most riders don’t tip, which would really help with the gas folks . . .

Lyft ordered me to pick up the rides, even if I lost money doing it. I refused, so they ‘deactivated’ me.

What do you think about that?

Call-A-Cab is now UBERIZED

Standard
suv1

Uber In Luxury for X or XL, Lyft and Lyft Plus

NO MORE TAXIS — It was four years ago Call-A-Cab cobbled together its website with travel information and, most importantly, a GPS map tracking available taxis and your location. You just clicked on the closest cab and the map autodialed the cabbie.

The logic of this was obvious; that the closest cab would give the fastest service, and talking directly to the cab driver cut out the dispatcher and confirmed pickup instructions.

Obvious, yes, to customers who tried it; but not the cab companies.

May 2014, a year after Call-A-Cab was launched, Uber and Lyft entered the Albuquerque market and their app was lauded by the press and welcomed by the Mayor. (The Albuquerque Journal refused to write a story about Call-A-Cab!)

Fall of 2015 Uber reduced its fares from $1.60 to 85 cents a mile. Their fleet of drivers quickly surpassed Call-A-Cab, and the taxi companies supplying cabbies lost half their drivers. Call-A-Cab had almost kept up with Uber’s numbers, but suddenly dropped to only four tracked drivers.

Still, the cab companies refuse to adapt to ‘proximity’ logistics, using inefficient ‘zones’ and relying solely on phone operators, not peer-to-peer instant communication.

So, after years of work and over ten thousand dollars invested, Call-A-Cab is closing its doors. (Call-A-Cab’s LLC was officially Dissolved August of 2017, almost exactly four years after launch. One luxury SUV is available through http://www.breakingbadluigistours.com) Its aids to travelers will continue. You can find the fare calculator, Gill’s Thrilling Restaurant Reviews, public transportation schedules, and tourist links and points-of-interest. But, no more taxis.

Those who find Call-A-Cab are directed to visit the website and try the GPS map, or download the Lyft app with a $10 credit towards their first two rides.

In fact, I quit cab driving over a year ago and this month became an Uber driver.

Riders love my Expedition Limited, and my twenty-years of cab driving in Albuquerque allows me to advise and give good transportation to visitors and residents alike.

I will also be associated with Prestige Limousine Tours featuring Luigi’s Breaking Bad Tours, and Tours of Santa Fe and Acoma. You can set up tours by contacting me at the TAXIABQ website.

Tourist Information and New Mexico Tours

How a Class E License and the Supremacy Clause can Bring Uber Back under Motor Carrier Act Regulation

Standard

A New Mexico Class ‘E’ Chauffeur’s License will Solve Uber Safety Issues

The Transportation Network Services Act is Preempted by the Supremacy Clause

Predatory Pricing and Vertically Integrated Monopoly

Uber Contractors Operating Without Insurance

Synopsis:

The 2016 NM Transportation Network Services Act [TNSA] is only six-months old, but is fatally flawed.

It is in direct conflict with Federal Motor Carrier Safety Administration [FMCSA] regulations and definitions, and its insurance ‘scheme’ has gaps of non-coverage.

Especially as the Uber app facilitates interstate transportation, it is subject to federal laws the TNSA purports Uber exempt. Therefore, New Mexico’s TNSA is preempted by the Supremacy Clause.

New Mexico’s legislature was pressured into accommodating Uber, however, the Uber phenomenon is not a ‘new’ technology requiring special treatment. Uber did not invent GPS or first associate Smartphone GPS with a tracking app. Uber did, however, use Disruptive Marketing to take over local taxi business, forcing its way in while hiding from regulators in the ‘ether’ of the Internet, openly challenging state enforcement of regulations, business taxes; and while violating antitrust law.

In comparison, nine months prior to Uber, Call-A-Cab® launched a GPS taxi logistics ‘peer-to-peer’ website perfect for Smartphones, but also accessible by PC, tablet, and landlines. And Call-A-Cab did it legally.

The following analysis of the 2016 NM TNSA is not intended to put Uber out of business. Uber is a very popular Smartphone app. However, the State of New Mexico must modernize its Motor Carrier and MVD statutes in order to promote its legitimate interest in public safety, and end Uber’s monopolistic practices of predatory pricing and blocking competition.

The current Uber business model, as described in the TNSA, unfairly exploits its contractors and their vehicles, perpetuates monopolistic practices, and at times leaves drivers and passengers completely uninsured.

On the other hand, if the measures suggested in this analysis are adopted, Uber can continue doing business, its contract drivers will have more opportunities earn a fair income, and taxi companies and their drivers can participate as well.

In 2011, the first 4G LTE Broadband Smartphones were introduced (3G was not fast enough to handle streaming GPS data) and in 2013 Albuquerque taxi driver, Leonard Daneman, launched the Call-A-Cab® GPS Taxi Logistics website. https://taxiabq.com He also designed a GPS tracking website called GPS ON TIME. http://www.gpsontime.com

Uber and Lyft entered the Albuquerque market illegally in 2014 and in 2015 their Predatory Pricing practices decimated local taxi fleets. Call-A-Cab® was in striking distance of competing head-to-head with Uber, but Uber dropped their rates from $2.25 to 85 cents per mile. Call-A-Cab went from thirty subscribed drivers (our target for optimal logistics was fifty) to only four.

While Call-A-Cab’s website redirects about $10,000 in taxi customers to three cab companies, no cab company will adopt Call-A-Cab’s GPS logistics to its dispatch office. Yellow Cab liked Call-A-Cab and eventually computerized its dispatch office, but at that time did not appreciate the value of Call-A-Cab’s peer-to-peer website; which is unfortunate because it would have put Yellow Cab a year ahead of Uber and Lyft.

Why A Class E License

UBER can be subjected to state and federal Motor Carrier safety regulations simply by adopting the Class E Chauffeur’s License into New Mexico law.

IN ADDITION, once Uber is brought into compliance, existing taxi companies and drivers can participate and profit while providing superior services to the public, not just smartphone users.

Uber has fatal flaws. Its insurance scheme at times leaves Uber drivers uninsured. In addition, Call-A-Cab’s GPS website does what Uber can’t: it can distribute calls both through taxi dispatch and directly to drivers from business landlines, accept cash fares, and its interactive GPS Logistics Map can specify types of vehicles and passenger capacity.

The Class E Chauffeur’s License

A good model to follow is the law used by the state of Missouri. They force Uber into the federal definition of ‘for hire,’ require ‘taxi’ license plates, and also control proof of commercial insurance. Some states require periodic vehicle inspections. Commercial vehicle inspections can be monitored by taxi companies who are already organized to facilitate Motor Carrier Act compliance.

Taxi Companies Will Not Just Survive, But Profit

Taxi companies not only lease taxicabs, but micromanage Motor Carrier Act compliance. The state Class E license application would take over the initial driver tests, checks, and inspections; the taxi companies would then take over compliance oversight charging a monthly fee to both Uber and taxi drivers using personal cars for commercial passenger transport.

Uber created the Transportation Network Services Act [TNSA] to avoid taxes and obstruct regulation under federal and state Motor Carrier laws, however, that in itself may be its undoing:         

Question:       Is New Mexico’s 2016 Transportation Network Services Act [TNSA] preempted by the Federal Motor Carrier Safety Administration [FMCSA]?

Answer:          Yes. A state statute must not conflict with, contradict, or obstruct enforcement of federal law. Under public policy and legitimate state interest, commercial interstate transportation of passengers is subject to federal and state safety regulations.

Conclusion:    A New Mexico Class E license would facilitate ‘for hire’ drivers meeting New Mexico Motor Carrier Act, FMCSA safety, and commercial insurance regulations.

Discussion:     Generally speaking, a state statute is preempted by the Supremacy Clause if it violates, contradicts or obstructs enforcement of federal law. Azar vs Prudential Insurance Company, 68 P.3d 909 (2003) 133 N.M. 669 2003-NMCA-062[1]

The New Mexico Motor Carrier Act regulates commercial transportation as public policy; the state having legitimate interest in the safety and welfare of citizens using ‘for hire,’ or commercial cars and taxis. State Motor Carrier regulations follow FMCSA guidelines.

These regulations, from which Uber declares itself exempt, apply to Uber even more considering Uber operates not only locally but as an Interstate Carrier. Just set your Uber app’s destination from Albuquerque to Denver or El Paso, and you will see for yourself.

The following section of Uber’s 2016 Transportation Network Services Act [TNSA] is in conflict with Federal law:

SECTION 3. NOT OTHER CARRIERS.–Transportation network companies and transportation network company drivers shall not be subject to the Motor Carrier Act or deemed[2] to provide any transportation service as defined in the Motor Carrier Act. A transportation network company driver shall not be required to register a personal vehicle as a commercial vehicle or vehicle for hire.[3]

Federal Motor Carrier Safety Regulations; General

  • 390.5: Definitions. Driver means any person who operates any commercial motor vehicle. . . . For-hire motor carrier means a person engaged in the transportation of goods or passengers for compensation;

 As followed by the Missouri Class E License:

Individuals who may need to obtain a Class E license include:

  • Daycare employees.
  • Uber or Lyft drivers.
  • Limo drivers.
  • Taxi drivers.
http://www.dmv.org/mo-missouri/special-licenses.php#Class-E-Drivers-Licenses

Uber’s Predatory Pricing and Monopolistic Insurance Scheme

Uber’s proprietary app and insurance are essentially ‘non-compete’ conditions in their driver contract creating a Vertically Integrated Monopoly. There is no reasonable non-fleet commercial insurance available for other business models and Uber drivers aren’t insured if they stray from the Uber app.

The insurance scheme approved for the Transportation Network Services Act is not standard commercial insurance, but an electronically controlled scheme tied directly to the Uber app. Unless they have their own commercial insurance, Uber drivers have limited or no insurance under some circumstances while in Part A and B.

In addition, if an Uber driver takes a ‘personal’ call, they are operating with ZERO liability insurance. These are serious ‘gaps’ in Uber insurance and underwriters in some states are scrambling to create ‘gap insurance.’ But, that is not good enough.

Also in violation of Antitrust law is Uber’s past year of dropping their rates from $2.25 to 85 cents per mile. Not only is this incredibly exploitive of Uber drivers and cars, it is Predatory Pricing according to both state and federal Antitrust law.

Predatory Pricing is a foreign corporation using below cost prices with the intent[4] to take over a local market (predation), knowing that increasing prices without competition will recover their losses (recoupment).[5]

A pricing scheme secondary to Uber’s predation is their refusal to collect gross receipts taxes from fares collected through the app, or pay gross receipts on commissions paid out to drivers.[6] Uber evaded taxes from their inception, but legalized their tax fraud scheme in the vague language of the 2016 TNSA, Section 18:

SECTION 18. CONTROLLING AUTHORITY.–

  1. No municipality or other local entity may impose a tax on or require a license for a transportation network company, a transportation network company driver or a vehicle used by a transportation network company driver where a tax or license relates to providing prearranged rides or subjects a transportation network company to the municipality’s or other local entity’s rate, tax, license, entry, operational or other requirements, except for generally applicable business licenses or taxes.

This is unfortunate and unfair to legal taxi companies, and Call-A-Cab. The only way to correct this inequity is to preempt and or repeal the TNSA through the Supremacy Clause. 

Added: November 13, 2016–Desoto Cab Company of San Francisco agrees with my year of complaints against Uber’s Predatory Pricing and on November 2, 2016 filed Desoto vs. Uber in Federal Court. See Desoto Cab Co vs Uber Technologies

Summary of a Statutory Solution:

  1. Class E License — Uber drivers fall under the federal definition of ‘for hire’ and must apply for a Class E Chauffeur’s License. That would resolve the federal and state safety issues now ignored by Uber. Federal preemption under the Supremacy Clause would void Uber’s TNSA exemptions.
  2. With a Class E License and reasonable non-fleet (half the operational hours) ‘for hire’ commercial insurance, GPS ‘peer-to-peer’ logistics will be available to all citizens including hospitals, hotels, bars, restaurants, and anyone using just a landline.
  3. It is known nationwide that Uber’s commercial insurance has holes in coverage. Many states are scrambling to create ‘gap’ insurance.[7] Once the Class E license is law, the insurance companies must provide an appropriate commercial insurance policy (not a ‘gap’ patch) for ‘personal’ cars used for-hire. At about half the rate of fleet taxis leased ‘24/7,’ this insurance will be affordable as a fixed business cost for all but the most ‘part-time’ drivers.
  4. These solutions will permit both Uber and Taxi drivers to accept calls through Call-A-Cab’s GPS Logistics, or any other competing dispatch services for independent contract carriers.

I would appreciate your interest in my years of research and building Call-A-Cab. The next step, with your support and approval, is scheduling a presentation before the NMPRC.

 

[1] {30} Federal law may preempt state law under the Supremacy Clause, U.S. Const. art. VI, cl. 2, by “express provision, by implication, or by a conflict between federal and state law.” New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 654, 115 S.Ct. 1671, 131 L.Ed.2d 695 (1995); Hennessy v. Duryea, 1998-NMCA-036, ¶ 6, 124 N.M. 754, 955 P.2d 683. “The purpose of the preemption doctrine is to allow Congress to promulgate a uniform federal policy without states frustrating it through either legislation or judicial interpretation.” Largo v. Atchison, Topeka & Santa Fe Ry. Co., 2002-NMCA-021, ¶ 6, 131 N.M. 621, 41 P.3d 347. Courts, however, apply a strong presumption against preemption, particularly in areas of law that are traditionally left to state regulation. Hennessy, 1998-NMCA-036, ¶ 8, 124 N.M. 754, 955 P.2d 683; Montoya v. Mentor Corp., 1996-NMCA-067, ¶ 7, 122 N.M. 2, 919 P.2d 410. {31} “Whether federal law preempts state law is generally a question of congressional intent.” Srader v. Verant, 1998-NMSC-025, ¶ 7, 125 N.M. 521, 964 P.2d 82. “`When Congress has considered the issue of preemption and has included in the 921*921 legislation a provision expressly addressing the issue,’ we need only identify the domain expressly preempted by the federal statute and may infer that matters beyond that domain are not preempted.” Hennessy, 1998-NMCA-036, ¶ 6, 124 N.M. 754, 955 P.2d 683 (quoting Montoya, 1996-NMCA-067, ¶ 8, 122 N.M. 2, 919 P.2d 410).

[2] Deem, vb. 1. To treat (something) as if (1) it were really something else, or (2) it has qualities that it doesn’t have . . . Black’s Law Dictionary, Seventh Ed. 1999

[3] See also TNSA §§ 2, B. (2) and 2, C.

[4] Uber CEO Kalanick made it publicly known he was out to destroy ‘big taxi.’ http://recode.net/2014/05/28/travis-kalanick-uber-is-raising-more-money-to-fight-lyft-and-the-asshole-taxi-industry/

[5] Below-cost pricing intended to eliminate specific competitors and reduce overall competition is known as predatory pricing. Section 2 disallows this conduct. In Brooke Group Ltd. v. Brown & Williamson Tobacco, 509 U.S. 209 (1993), the U.S. Supreme Court devised a two-part test to determine if predatory pricing had occurred. First, the plaintiff must establish that the defendant’s production costs surpass the market price charged for the item. Second, the plaintiff must establish that a “dangerous probability” exists that the defendant will recover the investment in above-cost inputs. In Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc. (05-381) (2007), the Supreme Court said that this test also applies when determining if a predatory bidding scheme exists.

[6] New Mexico Taxation and Revenue could find no gross receipts tax filings for Hinter-NM, LLC, Uber’s registered business name in New Mexico. See Connie L. Dayton, CPS, CFE, CFF, Forensic Tax Auditor, 505-841-6687 connie.dayton@state.nm.us

See  http://uberpeople.net/threads/uber-and-lyft-car-insurance.60340/

Call-A-Cab is Two Years Old Today

Standard

Today, August 6, 2015, is Call-A-Cab’s two-year anniversary.

Yes, it was launched in 2013 almost a year before Lyft and Uber hit town.

Call-A-Cab was created to dissolve the backup in dispatch phone lines, allowing customers searching Google for ‘taxi’ service to open a website and click to the GPS Map; that map showing real-time locations of cabbies, just a click away from calling and talking to . . . no Dispatcher.

So, while some customers stayed on hold for 5 to 10 minutes waiting for a dispatcher, those who clicked on the GPS Map had a taxi confirmed and on the way in 10 seconds.

That’s it folks. Now, why more cabbies aren’t subscribing to Call-A-Cab GPS tracking and taxi companies aren’t advertising the hell out of Call-A-Cab . . . I don’t know . . . maybe they want UBER to win.

Call-A-Cab at https://taxiabq.com is a Limited Liability Company and Federally Trademarked. Its GPS tracking system is through GPSONTIME at http://gpsontime.com

newbutton CLOMPASSwTEXT copy