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Colorado Springs taxi drivers seeking level playing field with ridesharing services

March 19, 2017 Updated: March 20, 2017 at 6:30 am
Caption +
Taxi drivers wait in line for passengers Friday, March 17, 2017, at the Colorado Springs Airport. (The Gazette, Christian Murdock)

When local taxi driver Chuck Peahl pays off the lease on his cab, he's thinking of stripping off the yellow paint and trading in his toplight for a new job.

Peahl and other taxi drivers in the area feel that they are losing their livelihood to ride-hailing smartphone apps Uber and Lyft. The companies, also known as "rideshare" services, have risen in popularity in recent years among those who believe they are a cheaper, more convenient alternative to taxis.

Peahl estimates the competition from the companies has cost him $20,000 to $25,000 in income annually. But it's not the decline in business that infuriates him and his fellow drivers - it's the differences in regulatory standards for cab companies and ride-share corporations, which they say have an unfair advantage because the regulations they face aren't as stringent and their drivers don't have to pay the same costs.

"We've got nothing against competition, but everything has got to be on the same playing field," he said.

Regulations not created equal

Peahl, who drives for Yellow Cab, was one of more than a dozen taxi drivers who asked the Colorado Springs City Council at one of its regular meetings last month to consider subjecting Uber and Lyft drivers to the same licensing requirements they must meet.

Cab drivers pay the city $97 each year - a fee that covers the renewal of their business license and a background check - but the requirement doesn't apply to Uber and Lyft.

The council has asked the City Clerk's Office to provide more information about the differences in state and local regulations and report back in June, after the April 4 municipal election.

State regulations are also not created equal. Taxi companies are held to higher standards on background checks, the hours they can legally work and the physical examinations to determine fitness for driving.

Cab companies and ride-hailing apps are both regulated by the Colorado Public Utilities Commission but are categorized differently. Taxis are considered common carriers - a subgroup that includes sightseeing and shuttle services - while Uber and Lyft are classified as Transportation Network Companies, or TNCs.

In 2014, Colorado became the first state to pass legislation creating a set of rules for TNCs, defined in statute as companies "that use a digital network to connect riders to driver for the purpose of providing transportation." According the National Conference of State Legislatures, 43 states have laws governing TNCs.

But the Public Utilities Commission enforces a "broader scope of rules" for taxi companies, said Terry Bote, a spokesman for the agency.

"While many of the rules by which TNCs are governed are similar to motor-carrier rules, the regulatory standards are not the same," Bote said in an email.

The commission authorizes taxi companies to operate within certain areas of the state, but can't limit where TNCs function, Bote said.

The agency also approves fare rates for taxis, but allows TNCs to charge whatever rates they like, as long as they disclose how the fare is calculated and offer a fare estimate.

The lack of limitations allows for a key part of Uber's and Lyft's business models: Surge pricing, which means that base rates are increased when there are few drivers on the road relative to customers using the apps to request rides.

This helps the companies keep fares low when supply exceeds demand, which helps draw customers who may have otherwise taken cabs.

"We believe that people should have the option to use ride-sharing if it's more reliable for them and if it's more convenient for them. In many cases, it is," said Taylor Patterson, a spokeswoman for Uber. "It's really a new model for how to move from place to place, and I think people are finding they prefer the convenience."

Declining business

Peahl is not the only one to see the effects of Uber and Lyft on the local taxi industry.

From 2011 to 2014, cab companies in Colorado Springs took an average of 562,000 trips each year, according to annual reports filed with the Public Utilities Commission. In 2014, when Uber and Lyft began operating in the city, cab companies reported taking 556,427. That number dropped to 479,662 in 2015, the most recently available data shows.

The totals do not include Pikes Peak Cab company, created in August 2015.

One driver who used to have a dozen customers a day at Fort Carson said he now only gets infrequent calls. Another, who services customers at the Colorado Springs Airport, said the rise of TNCs has cut business by half.

"There was a time in the cab business when a driver who was willing to work could net $1,000 to $1,200 a week. Those days are long gone," said James Hall, another Yellow Cab driver who's worked in the industry since 1994. "Now it's down to about $300 to $450 a week."

In October, Hall spent roughly a week working for Uber and found earnings comparable to what he makes as a cab driver, although he was able to pocket hundreds more because he was working 15 hours a day instead of the 80 hours that taxi drivers are limited to working within an eight-day period.

"It's just as bad as Yellow Cab," he said. "You have to work 15 hours a day to make any money, if you're going to do it as a livelihood."

Local Uber driver Mike Beck said he typically works about 20 hours and takes home roughly $350 each week when he's working in Colorado Springs. But, if he drives up to Denver, he can make up to $1,000 working 35 to 40 hours a week, which he does in addition to his full-time job as a computer programmer and web designer. On St. Patrick's Day on Friday, he made 36 trips in 12 hours.

Beck, who has been driving for Uber for more than two years, watched the service's popularity explode after the company began operating in Colorado Springs. The app is often favored over taxi companies because of the price, he said.

"That's the biggest complaint I get from riders - that taxi cabs are too expensive," he said.

Rates among Colorado Springs' three cab companies - Yellow Cab, Pikes Peak Cab, and Springs Cab - vary slightly. Each company charges between $4.50 and $4.70 for the first mile, with each mile thereafter costing between $2.25 and $2.40.

For standard Uber and Lyft rides ordered in Colorado Springs when surge pricing is not in effect, customers pay a base fare of $1, a booking fee of $2.30, plus $0.16 per minute and $0.90 per mile. But when prices are surging, the price of a ride can double, triple, even quadruple.

Drivers for Lyft and Uber pocket between 75 percent and 80 percent of the fare. Customers pay by registering a credit or debit card to the apps, allowing them to be charged automatically after they are dropped off at their destination. The Lyft app has a built-in tipping feature. In January, Uber drivers in Colorado Springs began accepting cash payment.

When surge pricing is not in effect, an Uber ride from the Gazette's downtown office on East Pikes Peak Avenue to the Colorado Springs Airport would cost about $18.12, according to the app's fare estimator. The same route in a Yellow Cab would cost $31.70, without tip, according to a Yellow Cab online fare estimator.

Concerns about safety

Local cab drivers argue the limitations of existing TNC regulations put passengers at risk.

When someone registers to work for a cab company in Colorado, they must undergo a fingerprint-based criminal background check done by the Colorado Bureau of Investigation and the Federal Bureau of Investigation.

TNC drivers are not held to the same standards. The companies have the option to use a private company to perform national criminal record checks on its drivers. Uber and Lyft use Checkr and Sterling Talent Solutions, respectively, to administer the checks.

But their competitors point to cases across the country where Uber drivers have been accused or found guilty of crimes such as sexual assault.

In March 2015, a Denver Uber driver was arrested after allegedly trying to break into the home of a customer he had just dropped off at DIA. Another driver for the company was accused of sexually assaulting a passenger on Halloween night.

Colorado Springs police could not say if any drivers, working for taxi companies or TNCs, had been arrested for crimes in recent years.

Uber spokeswoman Patterson said drivers are vetted based on their Social Security numbers. She also cited safety features of the app, which provides customers with the name of their driver as well as the make, model and license plate number of their driver's vehicle. Drivers may also use a feature on the app to share their location and estimated time of arrival with other contacts in their smartphone.

"The safety mechanisms that we have in place are beyond what taxis have in place in their business," Patterson said.

Lyft has similar features, such as a 24-hour hotline for customers to call if they experience problems using the app.

"Safety of the Lyft community is our top priority," Scott Coriell, a spokesman for the company, said in an email.

Medical checkups

TNC and taxi drivers must be medically examined every two years to ensure they are physically fit to drive, but the state Legislature is considering a law that would nix the requirement for TNC drivers.

Standards for the physical examinations required of TNCs and taxi drivers are not quite the same. For example, a taxi driver's examination must be administered by a doctor certified by the Department of Transportation. The drivers must also pay for the examinations, which range in price from $40 to $100, said Scott Holisky, general manager for Yellow Cab in Colorado Springs.

"The physical and the background check are two key tools for the government, whether it be city or state, to monitor who's in the cab driving your citizens around," Holisky said. "We both pick up a passenger from point A and deliver them to point B. Anything that applies to a cab company, especially when it's concerning safety, should apply to a TNC."

Hours of Service requirements for taxi and TNC drivers also differ slightly. Taxi drivers are limited to driving 16 hours at a time and cannot exceed 80 hours in eight days. A TNC driver may drive for up to 12 hours at a time - and, unlike the stipulations for taxi drivers, the limit does not include hours worked at other jobs.

Uber does not prevent drivers from exceeding the hours of service requirements, said spokeswoman Patterson.

Lyft spokesman Coriell said the company's app will automatically shut off when a driver reaches the state's maximum hours of service.

Both spokespeople said the vast majority of Uber and Lyft drivers work part time and use the app as a way to make money to supplement their regular income.

Compared to other states, Colorado's regulations for Uber and Lyft are fairly standard and more strict, said Douglas Shinkle, transportation program director at the National Conference of State Legislatures.

"Most of the state laws are very similar," he said. "We're starting to see a few more states perhaps move toward stricter requirements or looking to refine their existing laws or regulatory frameworks."


Contact Rachel Riley: 636-0108

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