D spanrlt ENTar C orrespondence Oprrca of THE Crrv ArtoRl. Ev TO: Mayor ]ordan Cify Council CC: Don N[arc, Chief of Staff Chief Tabor Kit Williams City Attorney Blake Pennington Assist ant City Attorney Patti Mulford Paralegal FROM: Kit Williams, City Atto DATE: Ioly 'I..4,20'J.4 RE: Uber, Lyft, etc. semi-taxi companies Arkansas cities have extensive rights to restrict and regulate taxis operating within their corporate limits. Fayetteville has chosen to do so by requiring inspection of all such vehicles and requiring special equipment and identification of such taxis. We require commercial liability insurance for commercial use of taxis to protect riders. This insurance is far more expensive than normal personal car liability insurance. We also require taxi drivers to apply for a permit and prove they have proper licenses. We conduct background checks of taxi drivers before issuing the required permit. We require all taxis "tobe kept safe and santltary." All of these numerous requirements and regulations have been enacted by the Fayetteville City Council to protect the health and safery of our citizens. The new internet "semi-taxi" companies like Uber and Lyft do not comply with any of these mandatory, public safety requirements. Many normal automobile liability insurance policy expressly exclude any coverage if the vehicle is being driven for commercial purposes such as a car-for-hire or taxi. Thus, if an accident occurs when someone has paid for a journey supplied by u person driving for Llber or Lyft, that person's
insurance might not pay for a passenger's serious injury, hospitalizattort, medical costs, loss of wages, etc. The policy probably would also not pay for any damages caused to the other driver. This morning, Little Rock sent a cease and desist letter to Uber and Lyft. I believe Fayetteville should also consider notifying these companies that they cannot operate in Fayetteville to offer or facilitate the offering of rides for hire unless and until they are awarded Certificates of Public Convenience and Necessity by the City Council and follow all the other rules and regulations for taxis in Fayetteville. It may be that the City of Fayetteville cannot directly regulate or restrict internet companies that arrange or facilitate drivers for hire in Fayetteville. Howevet, we certainly should be able to regulate any persons using such services to operate a clandestine taxi service in Fayetteville without authority and in direct violation of the Fayetteville Code. I will wait until aíter yorrr City Council meeting tomorrow night to send any such letter so that I can ask you at the end of the meeting if the City Council wants to propose amendments to our Taxi regulation code sections that would exempt Uber and Lyft operations from the taxi requirements and allow their operation in Fayetteville. Otherwise, I believe we should join Little Rock in an effort to restrict this unregulated taxi service before any of our citizens are hurt or exposed to liability or damages.
Ktr WITTIAMS Fxvrrrrvtrrp, Cttv AtroRhIeY Blake E. Pennington Assistant City Attorney Patti T. llulford Paralegal Phone 479.575.8313 citvatf orney@fayetteville - ar.gov I 13 W. Mountain Street" Suite 302 Fayetteville, AR 72701-6083 luly 1.6,2014 Lyft, Inc. c/ oeaftlr. Class Mail Corporation 548 Market Street San Francisco, CA 94104-540'1. c/o Registered Agent Incorporating Services, Ltd. 3500 S. DuPont Hwy Dover, DE 19901 IJber, Inc. c/o Rasier, LLC L82 Howard Street #8 San Francisco, CA 94105 Re: Status of Lyft and Uber in Fayetteville, Arkansas Dear Agents of Lyft and Uber: There are reports that your companies may be soliciting and offering rides in vehicles to passengers in Fayetteville, Arkansas. Because your drivers receive remuneration (no matter how characterized) which is also then shared with Yolr, these drivers and probably your company are in violation of Article IV Taxicabs of the Fayetteville Code (SS 117.30-117.49) and A.C.A. S '1.4-57-304. Afk. Code. Ann. SS 14-57-304-305 require that your companies apply for and obtain a permit to operate a taxicab service in the City of Fayetteville prior to operating here. Despite these legal requirements, your companies have not applied for nor obtained the required permits to
Lyfg Inc. and Uber,Inc. July 1.6,201.4 Page2 operate a taxicab service in Fayetteville, and your agents do not have the proper permits pursuant to S 117.32 of the Fayetteville Code to drive a taxicab or vehicle for hire in Fayetteville. There are several important reasons that your operation within the City of Fayetteville is suspect and probably dangerous for our citizens: (1) We do not believe that you are registered to do business in Arkansas nor have any offices here. (2) We are concerned that your operations here endanger our citizens because your taxisf vehicles for hire have not been inspected by the City Fleet Division to ensure they are in proper and safe condition. (3) We have concerns about proper liability insurance protection for any Fayetteville citizens riding in these taxis as well as other drivers or pedestrians that could be injuredby your drivers. As you must be well aware, most regular car insurance policies exclude any coverage if the vehicle is being used " for hire." (4) Your drivers have not been properly screened, approved and issued a permit by the Fayetteville Police Department. Although I have seen claims in the media that you provide temporary liability coverage for your drivers, no policies have been presented for our inspection (as required by S 117.33 Liability insurance of the Fayetteville Code). Your insurance company (if any) must be authorized to do business in Arkansas to ensure an injured passenger, pedestrian or other driver will be compensated for medical expenses, lost wages, etc. if an accident occurs for which your driver would be liable.
Lyft, Inc. and Uber, Inc. July 1.6,201.4 Page 3 I am sure you are aware of the injunction against your operation in St. Louis that was recently decreed by the Missouri State Judge for many of these same concerns. Taxi service for Fayetteville residents is an important service and will only become more important as more seniors stop driving their own vehicles but still need to go to the doctor, pharmacf, gtocery store, or entertainment venues. The City wishes to ensure the established record of safety and responsibility of our properly licensed taxi cabs is not undermined by uninspected, possibly uninsured and unsafe casual drivers for hire just so you can reap windfall profits from afat. Please do not attempt to operate or solicit or help drivers for hire to operate within the City of Fayetteville. With kindest regards, KIT WILLIAMS Fayetteville City Attorney CC: Mayor Jordan City Council