Updated: April 30, 2014 at 6:43 pm
Uber, a San Francisco-based ride-sharing service available in more than 100 cities worldwide, will expand to Colorado Springs on Friday, just eight days after competitor Lyft started service in the area.
Uber uses a smartphone application to connect drivers - all independent contractors - with riders. The application charges riders a fare that is generally 25 percent less than traditional taxi services charge, said Will McCollum, general manager of Uber's Denver-area operations.
The company had been studying the Springs for possible expansion "for quite some time," McCollum said, but decided to go ahead with it after legislators approved a bill Tuesday that authorizes ride-sharing services like Uber and Lyft.
"We have been watching how this market has been doing, such as how many users have downloaded our app, and we wanted to eliminate any doubt about the legality of our operation, so with the approval of the legislation it gave us the confidence to expand," McCollum said. "This legislation creates a whole new classification of vehicle - it is not a taxi or limo."
The legislation, Senate Bill 125, authorizes the ride-sharing services, requires them to get a permit from the Colorado Public Utilities Commission and follow state rules on safety conditions, insurance requirements and driver qualifications. The services must provide liability coverage from the time a fare has been hailed until the passenger has been dropped off, and commercial coverage when they are logged in but haven't been hailed.
The bill now goes to Gov. John Hickenlooper.
San Francisco-based Lyft Inc. began operating April 24 in Colorado Springs. The primary difference between the two services is that Uber drivers charge specific fares, while Lyft drivers don't charge for the rides they provide. However, Lyft suggests a donation at the end of the trip.
Uber will begin service Friday afternoon after sending an email Friday morning to area residents who have downloaded and opened its application, but McCollum called the expansion a "soft launch" that would start gradually and build up to a formal rollout May 21. All who download the application can get five free rides worth $25 or less during the first two weeks the service is offered, ending at 11:59 p.m. May 16.
Uber's Colorado Springs fares will be the same as Denver's: $2.14 per ride, plus 19 cents a minute, $1.57 a mile and a $1 "safe rides" fee. The minimum fare is $5.70 with a $10 cancellation fee.
Lyft's suggested donation, according to its website, is $1.50 for a pick-up, plus $1.60 per mile, 30 cents per minute and a $1 "trust and safety" fee. There's a $5 minimum and a $5 cancellation fee.
Yellow Cab of Colorado Springs charges $2.50 for the first 1/12th of a mile, 20 cents for each additional 1/12 of a mile and 20 cents for each 32.7 seconds of waiting time. Springs Cab charges $2.50 for the first 1/9th of a mile, 25 cents for each additional 1/9th of a mile and 43 cents per minute of waiting time.
Brad Whittle, senior vice president of Veolia Transportation on Demand, which owns Yellow Cab operations in Colorado Springs, Denver and along the Front Range, said Wednesday that Uber and Lyft are operating illegally in the state until Hickenlooper signs the legislation.
"All regulated transportation providers in Colorado have full-time commercial insurance coverage even when the vehicle is being used for personal reasons," Whittle said. "It is tough for us to compete because taxi companies are heavily regulated but these new companies use private cars to operate just like taxis but they have very different regulations."
Uber drivers must use vehicles that were manufactured in 2005 or after, and must pass a screening process that includes background and driving record checks, insurance verification and inspection of the vehicle used to provide the service. McCollum said drivers can earn "well into $20 per hour" providing the service, but he declined to reveal how many Uber has recruited.
Uber started in 2009 in San Francisco and expanded into Denver as its 15th city in August 2012. It has since added professionally driven limo and sport-utility vehicle service to its Denver operation. It added Beijing as its 100th city last week.
The company will monitor the growth of its basic service, UberX, in Colorado Springs to determine whether to expand the limo and SUV services here, he said.
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