Ride Sharing Service Carries Controversy

Known for their trademark pink mustaches, Lyft ride services began operating in Lincoln and Omaha last April. (Photo by Ben Bohall, NET News)
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August 28, 2014 - 6:30am

Peer-to-peer ride sharing services are becoming more popular in metropolitan areas in Nebraska and across the United States.  The service has not taken off without controversy, though.


Jennifer, who asked to be referred to only by her first name, has lived in Lincoln for over 15 years. As a mother of three working part-time from home, the prospect of supplementing her income on the side was enticing.

“It makes it a little easier than having to sit there, and think of how we’ll have to nickel and dime and see where this is,” Jennifer said.

An intriguing chance to earn some extra money came when she began to see ads on Facebook for a company called Lyft.

“I saw that back when it was starting up in April and I kind of ignored it and pushed it to the side and thought, ‘Well, maybe I can see what that’s about,’” she explained.

The company was looking for drivers as part of their entrance into Lincoln and Omaha. Lyft is a peer-to-peer ride based service. The concept is simple: the company has operated through an app that’s allowed for communication between Lyft’s “drivers” and “passengers.”

After downloading the app and creating a profile, a user can request a ride from any designated Lyft driver. The interface of the app gives the passengers each driver’s name, make of vehicle, location, and a rating. That way, the person who’s requested the ride is able to figure out which driver is the closest and most reputable. Each passenger also has a profile with location and a rating, The idea is to make it easier and cheaper to find a ride when you need one, while also encouraging a safe environment for everyone involved.

Now, almost four months after she started, Jennifer has found herself working regularly as a driver for Lyft. And she has loved it. 

The company, along with others like it, has found massive success across the United States. According to a representative from Lyft, the company has had over 10 million rides to date and tens of thousands of drivers in over 65 cities across the U.S. But that success hasn’t come without its share of speed bumps along the way. In several states, including Nebraska, the operation is illegal.

Mark Breiner is the director of the Motor Transportation Department at the Nebraska Public Service Commission. Following Lyft’s launch, Breiner and the Public Service Commission issued a letter to Lyft ordering the company to stop operating in Lincoln and Omaha immediately.

“They’re transporting people that are vulnerable, or can be very vulnerable. In that type of a situation,” Breiner said.

“The biggest concerns that we have involve insurance matters,” Breiner explained. “Whether there’s adequate insurance, whether it covers passengers. Does it cover third parties? There hasn’t been any real showing, certainly not to the Nebraska Public Service Commission, despite numerous requests for insurance information, what insurance they have, how it might be applicable, whether it’s adequate or not, when does it kick in, when does it not kick in, what does it cover, what does it not cover?"

Breiner said the PSC also has had concerns regarding the background checks of drivers, as well as the safety and adequacy of vehicles.

Lyft has countered the PSC’s statement, saying company utilizes excess liability insurance coverage of up to one million dollars for their drivers - covering passengers and third parties. According to Lyft’s website, the company performs background checks, driving record checks, and vehicle inspections. Jennifer, the Lyft driver, said she’s been through all of that.

“We’ve all got insurance. We’ve all been through a background check." Jennifer said.  "There isn’t any question of if a person’s a safe driver, because we’ve all had to drive with another driver, initially. We have to submit insurance information- if it isn’t enough coverage, then you wouldn’t be accepted as a driver.” 

But Breiner and the PSC aren’t the only ones who have taken issue with Lyft’s recent entrance into Lincoln and Omaha. John Davis, director of operations for Happy Cab in Lincoln and Omaha says Lyft’s choice to avoid state law has proven to be a burden for traditional cab services.

““Well they’re a threat only in a way that they’re taking business away and they’re doing it illegally. They’ve been issued a cease-and-desist by the Public Service Commission and they’ve chosen to ignore that. They’ve gotten numerous warnings, they’ve chosen to ignore those,” Davis said. “They’re aware that there’s an open investigation by the PSC, but again, they’re continuing to operate. I think those are good questions for them, as to why they are choosing to not follow the process.  They’re very much informed. They’ve met with the PSC, but they’ve chosen not to apply, so why are they not applying?”

Davis says Lyft’s failure to comply with regulations and licensing has created an unfair playing field in both Lincoln and Omaha.

A compromise for all parties may come in the form of new legislation. State Senator Heath Mello of Omaha says he has followed the issue closely, and recently met with representatives from both Lyft and the PSC. He’s planning to introduce a bill when the state legislature reconvenes in January. 

“The private sector is well ahead of the public sector when it comes to the inventions and the innovation as it relates to technology and the use of technology, and business models that evolve around technology. The public sector has to catch up with where the private sector is leading us,” Mello said.

Mello adds the first step will come on September 11th, when the Legislature’s Transportation Committee plans to hold a special, all-day hearing on alternative transportation methods. The committee will hear testimony on the topic, and Mello said he expects representatives from Lyft, the PSC, and traditional cab services will all participate in the hearing. You can watch a live stream of the hearing starting at 10:00am (CT) from our website.

Jennifer said she’ll also attend the meeting, along with several other drivers from Lincoln and Omaha. In the meantime, she says she has no intention of giving up on her new job.

“For what everybody has said on it, that’s taken rides, it’s another option and everybody likes it so why tell people, ‘No, you can’t have what you like,’” she said.

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