Atlanta's taxi industry declares war on Uber, Lyft 

What's yellow and black, heavily regulated, and green with envy?

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DISRUPTION ERUPTION: The sudden growth in Uber’s and Lyft’s popularity raises the question of whether the taxi will — and even can, by law — innovate and keep up. - JOEFF DAVIS
  • Joeff Davis
  • DISRUPTION ERUPTION: The sudden growth in Uber’s and Lyft’s popularity raises the question of whether the taxi will — and even can, by law — innovate and keep up.

In recent years, the cab companies have awaited an effort led by Mayor Kasim Reed to overhaul the ordinances that regulate the industry. Recommendations, including the long-overdue collection of basic data about Atlanta cab service, are now sitting on the mayor's desk. In addition, the city's entire regulatory scheme has been called into question in a lawsuit filed by a group of taxi drivers who claim it's stifled competition and helped create a monopoly.

For more than a year, taxicab and limousine industry professionals have been quietly prodding elected officials on the city and state levels to pass legislation to regulate or start cracking down on the startups, which they claim are operating illegally. In their eyes, Uber and Lyft are no different than taxis.

"If you advertise for transportation and provide transportation, you are a transportation provider," Hewatt says.

The only difference, they argue, is that Uber and Lyft don't have to comply with the same fees and regulations as limousines and taxis. That includes everything from paying sales taxes and permit fees to requiring all company vehicles to look the same and post decals and information. Limos and taxis are also prohibited from offering loyalty programs or special promotions. More importantly, they allege, Uber and Lyft are public safety hazards.

Jeff Greene, vice president of the Georgia Limousine Association's board and the president of the 26-year-old limousine and black sedan company Greene Classic Limousines, says he and others are concerned that the companies are simply operating outside of regulations that have been put in place to protect the public. "We're not about putting them out of business," he says, "but we go through a lot of expense and time to comply with federal, state, and local regulations. And we feel they should do the same that we do."

The fact that Uber and Lyft are unregulated makes Fasil Muche, the owner of Crown Cab, which leases medallions to drivers, question the system.

"What are they?" he says, referring to the rogue app companies. "A taxi company? Driver referral service? Could I go get a helicopter and start transporting people? Would the city allow that? It just doesn't make sense that you have so many people operating without the proper license."

The startups are pushing back, even claiming that they go above and beyond what's required of the highly regulated taxicab industry.

"What we do for safety far exceeds what is required of taxis and limos," says Erin Simpson, a Lyft spokeswoman. "In Atlanta, the minimum liability insurance for taxis is $25,000. With Lyft, it's $1 million. If safety is indeed a concern, you could argue that Lyft's requirements are much more stringent."

Not so fast, argues Hewatt. What insurance company in its right mind would provide coverage to a new company with a business model that relies on noncommercial drivers shuttling people to and from for "donations"? Simpson declined to name the provider, saying the insurance coverage was the first of its kind created specifically for the company. Lyft would share the proprietary information with local regulators if asked, she said, as the company has done in other cities and states.

These gripes you're hearing, Uber and Lyft argue, are merely the death throes of an ossified industry, dinosaurs that still roam among us.

"Uber is injecting consumer choice and innovation into an industry that, to the detriment of consumers and drivers, hasn't evolved in decades," Hourdajian says. "Those who benefit from the status quo don't want to have to compete and don't want to have to innovate. In city after city, we've seen incumbent operators work behind the scenes — outside the light of day — to limit consumer choice and driver opportunity."

Starting in mid-2012, Hewatt and other transportation professionals began sounding the alarm on the burgeoning industry, particularly Uber. Through an Open Records Request, CL obtained more than 500 pages of emails and other documents between Hewatt, Greene, and other ground transportation executives to Cedric Burse, the director of the Atlanta Police Department's Vehicle for Hire division, which regulates taxicabs in the city.

On Sept. 24, 2012, 18 of Atlanta's taxicab and limousine executives and Burse gathered at the Atlanta Police Department's Vehicles for Hire division's office south of Turner Field to discuss a threat to all their businesses: Uber.

In the weeks leading up the meeting, Hewatt and other ground transportation professionals regularly emailed each other and Burse links to articles about Uber's entry into cities across the country. One subject line simply read: "Uber wants war."

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