Web-based ride-sharing phenomenon may be coming to Chattanooga

Web-based ride-sharing phenomenon may be coming to Chattanooga

July 9th, 2014 by Alex Green in Local Regional News

Uber claims that its ride-share service UberX is faster, cheaper and more convenient than taxis. At first glance the benefits seem obvious. Riders can sign up for the mobil eapp and instantly request a ride. You can see how far away the closest driver on your phone. Enter your credit card info once and no cash is ever exchanged.

Photo by Laura McNutt /Times Free Press.


• Origins: Started in 2009 in San Franciso

• Reach: Today Uber operates in 70 U.S. cities and 40 countries.

• In the Southeast: Atlanta and Nashville are Uber cities.

Source: Uber

POLL: Would you use a ride sharing service?

Uber claims that its ride-share service UberX is faster, cheaper and more convenient than taking a taxi.

Simply put, it's ordinary locals driving their ordinary cars and giving people rides for money.

At first glance, the benefits seem obvious. Riders can sign up for the Uber mobile app and instantly request a ride. They can track nearby drivers on their phones. Enter their credit card information once and no cash is ever exchanged.

Since Uber started as a taxi and private car service in San Francisco five years ago, it has grown rapidly. It now serves 40 countries and 70 American cities, Nashville and Atlanta included. And the service could be coming to Chattanooga, with all of the hipness and baggage that it seems to inspire wherever it goes.

UberX has been advertising driver positions in Chattanooga for nearly three months and has tentatively hired a handful.

It's another trendy, Internet-born-and-bred sensation that seems like a natural fit in the self-proclaimed Boulder of the East, the world-famous Gig City.

"Chattanooga's on the innovative side of cities in the South," said Matt Patterson, COO of Bellhops, a Chattanooga-based moving company that employs college students and high tech to offer low prices and ease of access.

Patterson recently used UberX in Chicago and loved it. He said the wait was short and the trip was quick -- and cheap.

And that's a major part of UberX's shtick.

In Chicago, for instance, TaxiFareFinder.com estimates that a cab fare for the 6.3-mile trip between Willis Tower and Wrigley Field would cost $21.

UberX Chicago estimates the same trip would cost between $10 and $13.

"It's such an easy sell for the consumer," Patterson said. "I would be on the pro side of them coming to town."

But UberX isn't embraced by all.

Cab companies across the U.S. say UberX is an imposter, acting as a taxi without following regulations intended to assure that their drivers are licensed and insured and their vehicles are safe.

Insurance coverage among ride-share services has been a particular point of contention.

In mid-March, the Tennessee Department of Commerce and Insurance released a statement warning residents about ride-share insurance gaps that "can leave individuals in insurance limbo."

"The department wants Tennesseans to know that most standard auto insurance policies contain exclusions for livery or driving for hire," said Julie Mix McPeak, department director.

The release specifically mentioned ride-share services Lyft, Sidecar and UberX.

Chattanooga transportation officials have watched the feuds unfold and heard that the phenomenon is headed this way.

As always, one of the questions central to the conversation is this: Is it a taxi service or isn't it?

Labeling UberX a taxi service is an easy case to make, says Tim Duckett, owner of Millennium Taxi and Transport, a city-wide taxi company started in 2000, with 60 cabs currently in operation.

"If it walks like a duck and quacks like a duck, it's a duck," Duckett said. "You can't say, 'No, wait. I'm a chicken.' At the end of the day, somebody's getting paid for a cab ride."

He keeps tabs on the disputes between UberX and city governments around the nation.

Seattle just this week resolved a months-long dispute by dropping an attempt to limit the number of drivers that ride-sharing services can employ.

Chicago is in a feud over whether ride-share services, UberX specifically, should be able to pick up passengers at the airport, which is traditionally a cash cow for cabs.

Closer to home, Nashville police are ticketing UberX drivers because Uber reportedly told city transportation officials prior to its January entrance into the market that it would not adhere to taxi regulations.

Duckett said it's not that cab companies are afraid of what UberX will do to business.

"That's really not the case," he said. The case is market saturation."

Charles Topping, chairman of the city's transportation board, says Duckett has a point.

"We're pretty much at the limit, I believe," he said of Chattanooga's five cab companies and their 170 taxis.

The city transportation board keeps a close eye on the cab industry. The city sets fares and flat rates for certain areas. And Topping meets regularly with cab owners.

He said he would classify UberX as an illegitimate cab company and said such services are a growing problem here.

To combat them, the city is preparing an ordinance that will update taxi code and give the police department authority to tow and confiscate illegitimate taxis.

"Hopefully that will cut down on that some," Topping said.

Under Chattanooga's city code, at the time of registration with the city, cab companies are required to pay a $1,000, nonrefundable permit fee, then register a minimum of five cabs and pay a $50 fee per cab.

Every year thereafter, the permit fee costs $50 and each taxi $10.

All taxis are required to have a taximeter, striping, company insignia and easily identifiable numbers. Taxis must be accessible 24 hours a day and accept all riders. And they must have a physical location from which they are dispatched.

Most of those requirements are outside UberX procedure, and the company has rejected them in other places.

"It's going to be a problem," Topping said. "We don't know how we're going to address it yet."

Nashville officials have a few pointers learned from their bout with ride-shares.

Billy Fields, interim director of Nashville's transportation licensing commission, said since UberX arrived in January, the city has struggled to classify and regulate it and Lyft.

He said the city asked UberX to file as a taxi service and get proper permits, but the company refused.

"They said they did not believe they were subject to our licensing," he said.

So transportation officials have spent the last six months coming up with a plan B.

Nashville is now crafting local legislation specific to ride-shares.

Details were not available, but Fields said the city will identify UberX and Lyft as delivery -- not taxi -- services and regulate them accordingly.

He encouraged Chattanooga officials to examine their options.

"If I were in Chattanooga, or in any other city for that matter, I would see what other cities are doing and see what makes sense," he said.

It could be as soon as a week or two before UberX makes an official announcement about Chattanooga, according to newly-hired drivers.

But Uber is staying quiet about its interest in the city.

A company spokeswoman downplayed UberX advertisements specifically mentioning Chattanooga and said Uber often places ads to "measure the viability of UberX in different markets."

But she also said, "we are excited about the potential opportunity to connect riders and drivers in the Chattanooga area."

Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.