Business
4:06 pm
Tue June 17, 2014

A View Of The Ride-Share Debate From The Backseat Of Both Sides

Originally published on Tue June 17, 2014 8:33 pm

Local governments across the U.S. are struggling to decide how to handle new ride-sharing services, which are often at once popular and unrelated — or even illegal. Odette Yousef of WBEZ reports on the debate in Illinois, trying to determine the answer to one important question: What makes ride-share services different from taxis?

Copyright 2014 Chicago Public Radio. To see more, visit http://www.wbez.org.

Transcript

ROBERT SIEGEL, HOST:

When the company, Uber, announced its valuation last week, a lot of eyebrows went up. In case you missed it - $18.2 billion. Uber is a smartphone app that connects people with rides in taxis, black cars, even people who drive their personal cars.

There are several other ride-sharing apps out there. Tech Investors eager to jump on board, but cities and states are not big fans. There were a lot of questions about what makes these services different from highly regulated traditional taxis. And that debate has been especially fierce in Illinois.

Odette Yousef of member station WBEZ spent a day riding with a cab driver and an evening riding with a ride-share driver to find out.

ODETTE YOUSEF, BYLINE: In Illinois, the real fight is right here on Chicago's roads.

SAIED SARVINEHBAGHI: I've been doing this for a long time. There's nothing wrong with apps, but as long as they use cars that are registered and legal, like cabs or limos.

YOUSEF: Saied Sarvinebaghi has driven cabs in Chicago for 35 years. He converses easily with his passengers. Lately, his conversations often turn to the subject of his new competition - ride-share drivers.

SARVINEHBAGHI: Soon they take over the business - they destroy the cab business.

YOUSEF: Unlike most Chicago cabbies, Sarvinebaghi owns his medallion - that's a city license to operate his cab. Medallions have gone for as much as $360,000 each. Sarvinebaghi won his in a lottery, but he still spends a lot to keep it.

SARVINEHBAGHI: This car, $33,000, I paid it. I'm paying the car payment. I'm paying - right now, I'm paying like almost $600 a month insurance. You add all this up - stickers, fees, taxes, gas - you add all this up, it's kicking me and costing me money.

YOUSEF: Chicago makes cab owners like Sarvinebaghi buy a new car every four years. His is just a few months old, still smells new and is spotlessly clean. He's also required to take credit cards, even though he loses 5 percent when he does. Expenses included, Sarvinebaghi made about $11 an hour the day I rode around with him. Turns out, it's much easier to be this guy.

DAN BURGESS: Chicago history - these are little rough, but we'll see how you do.

YOUSEF: Dan Burgess - or as he calls himself, Trivia Dan.

BURGESS: A half mile in length, what East-West Chicago Street is named for an Italian aviator?

YOUSEF: Burgess' real job is his trivia company. He uses ride-sharing to promote it. Burgess drives for UberX, Lyft, and Sidecar nearly every weekend. All he does is open the apps on his iPhone and the ride requests start coming in.

BURGESS: All right, Monroe - Min is at State and Monroe.

YOUSEF: Riding with Burgess is fun. Trivia winners get scratch off lottery cards. Passengers on Lyft get to sit up front. There's no physical exchange of money, the apps take care of payment. So when passengers get where they're going, they just pop out.

UNIDENTIFIED PASSENGER: Thank you.

BURGESS: See you. All right. So I just got a text already saying that was 15 percent prime time. So Lyft has a promotion going on tonight, so I got time and a half on that.

YOUSEF: Oh, and that's another big difference between Burgess' job and Sarvinebaghi's. Sometimes ride-share companies hike up their fairs to several times the normal rate. Burgess thinks ride-sharing and taxis are different enough to merit different roles.

BURGESS: This is a casual experience. I might go a month without giving a ride, so why should I fall into the same strict rules as a real cab?

YOUSEF: But the truth is, what Burgess does is illegal. He's using his personal car for public transport. It's clean but it's also 9 years old. It doesn't have a medallion. It hasn't been registered or inspected by the city. Burgess hasn't been fingerprinted for a criminal background check, and he doesn't have commercial taxi insurance. With none of those expenses, Burgess made more than my cab driver - $14 an hour this night.

Lawmakers both in Chicago and the state while they want to show they're innovation-friendly, they also have to protect public safety. Chicago recently passed rules that leave ride-share companies' business models relatively untouched. But they may soon be preempted by rules from the state that will likely narrow the differences in regulation between ride-share cars and cabs. For NPR News, I'm Odette Yousef in Chicago.

MELISSA BLOCK, BYLINE: You are listening to ALL THINGS CONSIDERED from NPR News. Transcript provided by NPR, Copyright NPR.