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Growing ride-sharing industry facing challenges

PHOENIX – The people at uberX describe their business as a ride-sharing network: You simply download their smartphone app and request a ride.

If you think it sounds a lot like a taxi service, uberX Phoenix General Manager Steven Thompson will say you’re wrong. His company touts itself as a technology firm, not a limo or taxi service.

In Phoenix and Tucson, Thompson said they have “hundreds of drivers on the roads” and no shortage of customers, “because they know it’s safe, convenient, reliable and affordable.”

But not everyone’s sold. Kevin Tyne, director of Arizona’s Department of Weights and Measures (DWM), which oversees the vehicle-for-hire industry, believes uberX is operating illegally.

“In the eyes of the department, it is illegal,” Tyne recently told a House committee. “We have been civil-penalizing drivers out in the field that are operating outside the standards that are currently in the law, with regards to insurance, which is absolutely an area of violation.”

Current Arizona law requires taxi, limo and livery drivers to be licensed through DWM. In addition to drug testing and background checks, the DWM also requires commercial liability insurance. Experts say personal car insurance will not cover accidents if a vehicle is being used in a commercial capacity.

Mike Pinckard, president of Glendale-based Discount Cab, said his company pays for commercial liability coverage for all drivers.

“So, regardless of whether he’s [a driver] working for Discount Cab at the time or he’s driving to the grocery store, that vehicle’s covered,” Pinckard said.

Thompson said the company itself is covered, if an accident should occur.

“Personal commercial insurance policies are extremely expensive and most of our drivers work part-time,” Thompson said.

Instead, he explained that the company has an excess $1 million policy that covers accidents during rides.

Insurance isn’t the only issue being debated. uberX is pushing a bill that would define its business differently than taxi, limo and livery companies. While it claims to offer extensive safety checks and coverage, Thompson said uberX does not want to be regulated by the DWM.

“We said that we would provide our documentation to them if there is an audit or need for that,” Thompson said.


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