An "Uber" controversy hits New Orleans

Published: Jun. 24, 2014 at 9:49 PM CDT
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Uber is a technology company that would coordinate taxi and limo rides through a phone app, and it wants to break into the New Orleans market.

The company faces strong backlash from transportation industry leaders and New Orleans council members for certain services.

Tuesday, most council members in the transportation committee made it clear that they like the idea of the Uber Black service, but they do not like how it could open the door to other sorts of services, which are illegal, that Uber operates in other cities.

There are different types of Uber Services, and they all have different levels of oversight of drivers.

The service that Uber says it wants to implement in New Orleans is called Uber Black.

Uber Black is an app on your phone that would allow you to see the nearest taxi and limo drivers and request their service, so you're not on hold with a taxi service trying to get a cab and you don't have to try and wave one down on a corner.

"A request would go to a car, which would then come. You can see as the car drives towards you. You get a text saying your driver has arrived. You go to your destination, and at the end of the ride you're simply able to get out of the vehicle because your credit card is automatically charged," said Thomas Hayes, the GM of Uber New Orleans.

Uber Black contracts only with drivers who are already licensed to drive taxis, black cars or limos through the city.

The council's main concern is about UberX.

UberX is a separate service, one that the company is not suggesting it would necessarily bring to New Orleans.

It is a ride-share service, and it would not require drivers to be licensed through the city. At the meeting, council members reminded everyone that type of ride-sharing service is illegal.

Also, industry leaders worry how it would flood the market with those who aren't insured for taxi driving.

"The problem is that an individual driver just carries his own personal insurance, that is not going to cover him picking up somebody for a fare. So when he tries to make that claim with an insurance company, they're going to deny that claim and then Uber is going to deny anything else on top of it, so they never pay for any damage that's caused as a result of using their service," said Warren McKenna, III, and attorney representing three cab companies.

So why is the council concerned UberX would be implemented after Uber Black is introduced?

They said the company has brought UberX to other cities by adding the service to the app once enough people in a market already downloaded it, and they did so even though the ride-sharing service was illegal.

Earlier this month, an Uber spokesperson posted this on its Virginia blog: "You may have heard that Uber received a cease and desist letter from the Virginia DMV yesterday. We wanted to write to let you know that Uber will operate as usual."

Hayes stopped short of saying Uber would never implement UberX in New Orleans.

"We're all for consumer choice and we do think our products offer consumers and drivers a benefit no matter which product, and we're committed to continuing those conversations with the city, but for right now our objective is to get Uber Black up and running New Orleans," said Hayes.

Members of the city's transportation committee said Tuesday's meeting was the first of what will be many discussions with Uber and transportation industry leaders about implementing Uber Black and the enforcement and control concerns regarding UberX.

But there are changes to city laws that need to happen before Uber Black can go into affect. Those changes will drastically affect the way the city's limos operate and get paid.

Currently, there's a minimum amount of time someone can book a limo in New Orleans: 3 hours.

Also, fares must range between a maximum of $65 an hour, and a minimum of $35 an hour.

This means, with current hour and rate requirements, there's no way to pay less than $105 for a limo.

At the transportation committee meeting Tuesday, the mayor's office said it'd be in favor of a new fare structure for limos in order to facilitate technology companies such as Uber.

"We just feel like it's important to set a New Orleans framework around the changes in the for hire industry that will be able to have both the limos and taxis coexist in this new paradigm," said Ryan Berni, a representative from the mayor's office.

In order for Uber to operate in New Orleans, the fare limitations, among a few others, would have to be lifted so consumers can request service of a nearby limo or black car for an average ride.

"Right now, the ordinance does some things that will allow us to operate but it doesn't quite go far enough," said Hayes.

Limousine Livery Vice President Aaron Dirks said if hourly requirements are dropped, an entirely new fare structure will have to be put in place, which he said he may be okay with as long as new minimum fares do not take away from taxi business.

The mayor's office suggested a new minimum of $25/hour for limos, which Dirks said would be too low.

"There's a very important separation that must be maintained between the pricing for a taxi cab and a private car service to properly protect the environment from which the taxi cabs have to operate so that the drivers can make a living wage," said Dirks.

The taxi industry is also concerned because Uber is a technology company and would likely not have the same liability insurance coverage as a regular transportation company.

"There are regulations that are in place that are designed to protect the people that drive the vehicles and are designed to protect the people that ride in the vehicles. With Uber, you don't have that," said McKenna.

Uber is not the only company trying to incorporate technology into the taxi world. describes an app scheduled to launch in 15 cities. It will provide similar map and cab requesting services as Uber Black.

Within the month, New Orleans is supposed to be the first city the app launches in.

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