Part-Time Uber Partner-Drivers Are Fundamentally Different From Existing Taxi Operations

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1 Mayor and Councilmembers: There was considerable discussion of requirements for TNC drivers at the Council B Session this week. The outcome of the discussion has resulted in a proposed ordinance with numerous flaws, that if enacted would force TNCs to abandon service in San Antonio. The proposed ordinance creates extensive, unnecessary requirements for parttime drivers, creates barriers to entry for drivers and significantly deviates from the standards set by every other Texas municipality that has enacted TNC regulations. Part-Time Uber Partner-Drivers Are Fundamentally Different From Existing Taxi Operations To be clear, the majority of Uber partners drive a few hours a week and use their own vehicles (which are inspected by the state of Texas) to make extra income and provide for their families. They are veterans, spouses of active duty military, retirees, teachers, and single parents. Uber creates a marketplace where these people can use their own car to provide a ride to their neighbors when, where, and how often they want, a strong contrast to taxi, where multiple full-time drivers drive one car 24 hours / 7 days a week with high mileage and significant wear and tear with the majority of the profit going to the taxicab company. Simply put, there is virtually no comparison between taxis and TNCs that use smart apps to connect riders looking for transportation to drivers that provide transportation. Transportation Network Companies Have Become Part Of Everyday Life Because People Recognize The Real World Problems The TNC Business Model Solve TNCs are a new and unique business model that uses smart apps and a driver/rider rating system to connect riders looking for transportation to drivers that provide transportation through an on demand, safe and cashless transaction. Today these apps have become part of everyday life and are being used by people in over 250 cities worldwide. In the beginning, they were used primarily by millennials like the ones we are trying to attract to San Antonio. But more and more, they are being used by people who need affordable and reliable transportation and previously were not served by taxis. The availability of affordable on-demand transportation has transformed everyday life for those who are struggling to make ends meet, the visually impaired, those who don t own cars and individuals on fixed incomes. The platform also offers many of these same people economic opportunities to drive on the Uber platform: The retiree that is worried about make ends meet on a fixed income and needs a flexible job a few days a

2 week, the single mom who needs to juggle taking care of her kids with trying to put food on her table. Uber is that economic freedom. Even those not on the platform benefit from Uber s presence in a city. In addition to the economic opportunity, Uber s entry into a community has been proven to significantly reduce DUI rates. One study revealed DUIs reduced by more than 10 percent in Seattle. Considering Bexar County witnessed 2,303 alcohol-related crashes in 2013, the city should welcome any partner willing and able to lower this rate. Finally, areas underserved by traditional taxis and public transportation become better connected to the city and expand access to individuals living in these underserved areas. Moreover, TNCs have processes in place to ensure both our drivers and riders are safe. For example, all drivers are subject to a three-step background check screening, which includes county, federal, multi-state and sex-offender database checks. These checks go back seven years, the maximum allowable by the Fair Credit Reporting Act. The Proposed City Ordinance Contains Numerous Anti-Competitive Driver Requirements That Deviate From The Task Force's Recommendations And Municipal Ordinances Passed In Other Major Texas Cities The City created a task force charged with devising workable solutions for the regulation of TNC drivers and the new and innovative TNC industry. The task force worked for over three months in good faith to reach consensus on many issues. Its recommendations however were substantially ignored in the proposed ordinance and other onerous requirements were added, including additional insurance and driver requirements, which were never discussed at the task force. Below is a just a partial list of some of the problematic driver requirements, many that are unique to this ordinance and far outside what other cities have approved in Texas and beyond: 1. Get a full physical and eye exam before driving, even though an eye exam is already required for a driver s license and any driver is already deemed physically able to drive on Texas roads because they have a valid Driver s License 2. Take a pre-scheduled drug test, when the best way to prevent intoxicated drivers is having a zero-tolerance policy and constant feedback loop via the app that would enable TNCs to suspend anyone suspected of driving under the influence until an investigation is complete 3. Be certified that you can read and speak the English language, even though communication of pickup and destination can be done in-app with turn-by-turn

3 navigation. (Note: there are a number of deaf and mute drivers on the platform in other cities. Would they not be allowed on the platform?) 4. Complete a defensive driving course even though it is not required for drivers on the roads in the state of Texas 5. Have the vehicle subject to expensive, random checks even though they would also be required to have a third-party inspection by an ASE certified mechanic On top of going through the TNC s thorough background check, the driver must also complete a 10 point fingerprint background check, even though the TNCs complete certified 3rd party background checks. The driver must also pay around $160 annually to the City of San Antonio in addition to the ~$150 in cost of all the requirements, equating to over $300 per driver, just to make themselves available to provide a service to other members of the San Antonio community. It is important to stress that these are all unnecessary hoops to go through for someone simply looking to utilize their car for some part-time work and help their fellow San Antonians move around the city. Cities like Austin have reviewed the TNCs safety and security protocols and deemed this marketplace safe and secure without the need of duplicative and/or unnecessary requirements. The Proposed City Ordinance Sets Insurance Requirements Excessively Beyond Those Required Of Taxis And Deviates From A Clear Consensus Amongst Other Texas Cities Like Austin, Dallas and Houston TNCs currently carry insurance that is protective of public safety and is specifically designed to cover the risk presented by the rideshare industry and is issued by a financially strong insurance carrier. Uber s ridesharing insurance coverage provides end-to-end insurance coverage for partner drivers at all times during their use of the Uber smartphone application. This covers the driver's liability (a) while a driver is logged into the Uber smartphone application and available to receive ride requests; (b) from the time a driver accepts a trip request through the app; and (c) through the completion of the prearranged ride, until the passenger reaches his or her final destination and exits the vehicle. Uber already voluntarily offers the following insurance protection: $1MM in primary automobile liability coverage from the moment a driver accepts a ride request, is en route to pick up a requesting passenger and at all times a requesting passenger is in the car. This is more than 10x the amount of liability coverage taxis are required to carry in San Antonio. Liability coverage of $50,000 for bodily injury per person up to $100,000 per

4 incident when the app is on and a ride has not even been accepted in the event a driver s personal policy denies coverage or coverage is otherwise unavailable. This exceeds the amount of coverage required for all motor vehicles under Texas law. To be crystal clear: there is no gap in coverage. By comparison, taxis are only required to carry $30,000 for bodily injury per person up to $60,000 per incident (the state minimum). Moreover, they are allowed to self-insure, which gives them additional financial incentive to deny claims and has created alarming issues in cities like Dallas. Uber would support the same insurance requirements currently in place in Houston and Austin and those recently proposed in Dallas. This is a workable model that creates consistency across major cities in Texas and represents a compromise approach that was reached after lengthy study and debate. Balanced approaches like this have encouraged the insurance industry to develop additional personal lines products for TNC drivers. Recently, personal lines insurers have filed such product offering in four states, and we expect many more will follow. Uber In Good Faith Has Actively Participated In The Dialogue Surrounding The Creation Of The Proposed Ordinance, Yet The Proposed Ordinance Largely Ignores The Recommendations Of Both Uber And The TNC Task Force Uber has been at every meeting and has been working cooperatively on trying to reach a compromise ordinance. Uber has participated in good faith on similar ordinances across Texas and was able to reach viable solutions with both the cities of Austin, Houston and shortly Dallas. Austin and Houston both understood the economic benefits of more options and, having successfully implemented compromise ordinances that work for both TNCs and taxis alike. It is likely that Dallas will adopt a similar ordinance next week, which would leave San Antonio as the only major Texas city that does not welcome the benefits of ridesharing. This is only to the detriment of San Antonians looking for additional economic opportunities and safe, affordable on-demand transportation. Rather Than Seeking A Viable Solution, The Proposed Ordinance Contains Numerous Roadblocks That Do Not Enhance Public Safety The proposed ordinance in San Antonio contains procedural roadblocks that do not enhance public safety; rather, their sole function would be to eliminate transit options for its citizens, protecting a taxi system that has not met the needs of San Antonions. Over

5 7,500 persons have signed an online petition in favor of providing this option to our citizens. A vote next week in favor of the proposed regulations will likely result in Uber closing their operations in San Antonio. The only people to benefit will be those who own the taxi companies. Many of our local companies have weighed in on this issue, arguing that new transportation options are important to attract and keep our younger citizens. Please consider what message this will send to those doing business and seeking to do business in San Antonio. Uber is operating across the world with one primary goal in mind providing a safe, efficient transportation alternative and economic opportunity for all. It has adopted industry leading insurance coverages designed for rideshare drivers that far exceeds those provided by the taxi industry, and its current vehicle inspection and driver requirements background checks are state-of-the-art and designed for the unique rideshare industry. Thank you for your consideration. Leandre Johns General Manager, Uber