Uber: Will Georgia Welcome Cutting Edge Technology or Regulate It, Discourage Competition, and Hurt Consumers

Your Georgia Desk:

Our Editor, Todd Rehm, included this story on Uber in our morning e-mail.  It is worth a stand-alone post:

When I visited our nation’s capital city last year with my Republican Leadership for Georgia class, several classmates and I took a Lincoln Town Car from Reagan National Airport to our hotel for a total of about $9 per person, luggage included. It was the first time I ever used Uber, an iPhone app that helps you summon and pay a taxi, executive sedan or SUV.

Uber has since come to Atlanta, and like Tesla, has run into a regulatory regime that appears to discourage competition.

There was a time when, if you needed a lift home from the bar, to the doctor’s office, or to the airport, your only private option was a cab company. Now you can just open a free app on your phone and instantly find a ride from a handful of companies. And not just any ride, but a clean, even fancy, and quick-to-arrive ride for roughly the same price as a cab.

Atlanta’s taxicab industry has been watching from the sidelines, waiting for the companies with the silly names but alarmingly similar business models to be forced to comply with the same regulations they’re legally required to follow.

A turf war between cabs and the flashy transportation upstarts has erupted in cities across the United States, including Los Angeles, Washington, D.C., New York, and, now, Atlanta. The taxicab industry is sick of the car services poaching its business, not paying the fees, and driving around town picking up fares without any oversight. These companies are to taxicabs what blogs were to newspapers, digital cameras to film, and Airbnb to hotel chains. Uber co-founder Travis Kalanick has built his career on creating such disruptive business ventures.

For Atlanta’s taxi industry, the infusion of new, unregulated vehicles was a shock. The path to becoming an Atlanta taxi driver is not an easy one. Men and women who want to drive cabs must pay a $75 application fee and $20 for fingerprints and a background check to be approved for a permit. They must also complete an annual daylong training session that includes a review of the city’s taxi ordinance. On top of that, they must already be partnered with a city-recognized taxicab company that owns a Certificate of Public Necessity and Convenience, or what’s commonly known as a medallion. Basically, a license to operate a taxi.

The city has created 1,600 medallions, nearly all of which have been sold. The city possesses the final 46 and plans to hold them because it considers there to be an overabundance of taxis in Atlanta. You’re more than welcome to buy one on the open market. The current going rate is around $65,000, a steep price, albeit a fraction of what you’d pay in New York City where they can run closer to $1 million. Most people lease the medallions, which, depending on what type of company they choose to work for, can cost as much as $775 a month. Full-service companies, which provide and maintain the vehicle, can charge as much as $600 a week.

Cab drivers are required to get their fingerprints checked every year. Vehicles must be inspected twice annually.

And State Representative Alan Powell (R-Not Atlanta) wants to require Uber and other new services to comply with the same burdensome local regulations that have created a major metropolitan area almost devoid of taxi cabs. Seriously, when is the last time you used a taxi in Atlanta? The State Capitol would seem a natural area for taxis, as lawmakers and lobbyists head to lunch every day, but you never see them unless someone has ridden in from the airport.

In response, Hewatt and his colleagues have started a behind-the-scenes push to do what other cities across the country have done: regulate companies that act like taxis but swear up and down they’re not. Uber and Lyft have hired high-powered lobbyists to defend their interests at City Hall and under the Gold Dome. So have the taxicab and limo executives. They’ve also found an influential state lawmaker who sees the merits of their arguments. If the Old Guard gets their way, the technology companies might have to follow some set of rules. If it doesn’t, the checker cabs and limos could face an uncertain future.