Uber has hit a red light in the City of Auburn.
“I found out Uber was pulling up stakes only a few hours before it actually happened,” said Gary Maxwell, who has been driving for Uber since it launched in Auburn in August 2014. “Initially, my stomach dropped.”
Uber, a self-described “technology” company that allows users to book rides via a mobile app, sent emails to drivers and customers late Wednesday afternoon announcing that it would be hanging up its keys at midnight on Thursday.
“Tomorrow we'll be temporarily suspending operations in Auburn while we work toward a statewide regulatory framework for ridesharing,” the letter to Auburn Uber users states. “We simply will not operate under regulations that do not allow us to provide riders a positive rider experience and offer drivers the best economic opportunities.
“Despite the new standard for safety we've set with our multi-layered background checks and $1 million commercial insurance policy, the Auburn City Council rushed through burdensome regulations that don't make sense for this new option, and make it impossible for ridesharing to exist in the city,” The letter continues. “It's disappointing that Auburn City Council chose not to join the ranks of over 20 U.S. jurisdictions that have welcomed new transportation alternatives like Uber and created sensible regulatory frameworks for ridesharing.”
On Jan. 6, the Auburn City Council passed an ordinance placing companies like Uber that allow users to book rides via an app under the same regulations as other “vehicle for hire” companies such as taxis within city limits. The ordinance sets requirements in regard to possessing commercial insurance, paying city licensing fees, identifying vehicles with appropriate signage, having drivers obtain background checks before being hired and more. Since Uber began operating in Auburn over the summer, local taxi companies have spoken publicly about how the company was not being held to the same standards that they were required to adhere to.
An Uber representative who addressed the council in December warned that requiring Uber drivers to possess commercial insurance rather than allowing them to operate under the policy that Uber has in place could prevent the company from being able to operate in Auburn. As per Uber’s request, the council agreed to table the ordinance until the Jan. 6, 2015 council meeting to give the city time to negotiate with Uber lawyers.
According to city officials, however, the ordinance passed on Jan. 6 did not differ from the one on the December agenda.
“As we’ve said during the six months or so that we’ve been working with Uber, we’re happy for them to do business in Auburn,” said David Dorton, Director of Public Affairs for the City of Auburn. “There are, of course, regulations that any vehicle/driver providing rides for money has to follow, regardless of whether the ride is booked through an app or by hailing a taxi. These regulations promote safety and ensure a level playing field for all vehicles for hire.
“Uber has chosen to leave the market even though there are drivers locally who had gone through the licensing process and met local requirements,” Dorton continued. “Whether or not they want to operate in Auburn is their business decision to make. We hope they’ll see that the value of the Auburn market is worth following the same rules required of other companies who provide the same service.”
The Uber perspective
While the city supports equating all vehicle for hire companies, Uber representatives contend that new technology should warrant a new regulatory structure altogether to sustain that new technology.
“While 21 U.S. jurisdictions have created permanent regulatory frameworks that recognize ridesharing as a new transportation alternative, Auburn has chosen to put forth burdensome regulations that disregard our innovative business model,” said William Guernier, General Manager for Regional Expansion for Uber. “We hope other local communities and the state legislature see the need for ridesharing in Alabama, and create sensible regulations that embrace opportunity and choice.”
An Uber representative told the Opelika-Auburn News Thursday that there were three main issues the company had with the ordinance. First, the company explained that Uber already requires that its drivers undergo background checks—ones that go back seven years, which is more than the city requires; thus, having to go through the city’s background check slows a process that is already in place above and beyond the city requirements, the Uber representative explained.
Also, Uber asserts that because its drivers use vehicles that are also driven for personal use to transport passengers, they should not be required to have the same commercial insurance as taxi companies as outlined in the new city ordinance. Uber covers a driver for up to $1 million from the time a ride is booked to the time riders are dropped off. In between rides when a driver has the app on but no passengers are in the car, Uber covers the driver under a contingent policy. The city ordinance would require the commercial policy to continue during this time rather than the contingent policy. Both Uber and the city require that drivers also uphold personal insurance policies.
Along the same vein, because Uber drivers use their personal vehicles, the company claims that the ordinance’s vehicle identification requirements are not fair to ask of drivers. The ordinance states that at all times vehicles for hire must have the words taxi, vehicle for hire or the name of the company displayed on at least one door on each side of the vehicle with letters sized no less than three inches in height.
Drivers, users react
Maxwell said he began driving for Uber in order to earn steady income and to pay college tuition for two children after his family moved to the area from Germany, where his wife was stationed in the Air Force.
After his initial shock of being notified on Wednesday that he would no longer be able to driver for Uber, Maxwell described feeling “numb” as he picked up his first set of passengers on what would be his last night—passengers that he had become familiar with over the course of the fall 2014 semester.
“Numbness became sadness as I dropped them off at their destination,” Maxwell said. “They told me they were sad as well, because they had come to rely on Uber for safe transportation and they thought the taxis were difficult to find, smelled bad, were expensive and in some cases, creepy. Rinse and repeat all night.”
Both Maxwell and Uber driver Matthew Bourguignon listened to customer outcry about the cessation of the app-based ride-for-hire service in Auburn.
“Some people were extremely verbally upset,” Bourguignon said. “A lot of people were just disappointed. Several of them were saying, ‘Let us know how we can help. We want Uber to come back.’”
Auburn resident Greg Frazier is a frequent Uber user who was upset to hear that it was suspending its operations Thursday.
"Uber leaving town is almost as confusing as it is upsetting," Frazier said. "Uber brought supplemental income to those looking for extra work while simultaneously providing consumers a service at more than competitive pricing. The last time I checked, free market economics and the act of creating jobs were American ideals, but apparently not in this case."
Bourguignon began working for Uber in November in order to garner start-up funds for his on-location computer repair business, On Site Computer Services of Auburn. Though he holds a part time job with a tech staffing company, he said he still spent about 40 hours a week working for Uber.
“I needed a job that would allow me to make ends meet, hopefully give me some extra cash to play with to get another business started, and still have the flexibility to have time to work the other business,” Bourguignon explained.
Upon receiving Uber’s email on Wednesday, Bourguignon felt emotional about not only losing a job, but losing a job that he had come to enjoy.
“My reaction was extreme disappointment,” he said. “The money was good with Uber, but I really enjoyed the work. I had a really great time with it. Auburn is a really great place for something like Uber. Most of the people that we worked with were fun, were friendly. I gave rides to some people who really didn’t have a whole lot of other options.
“I brought one guy to the doctor when his car was broken down,” Bourguignon continued. “He was the very first person I thought of.”
Maxwell also describes how the nature of the work itself is something he will miss—something he realized on his last night as a driver.
“More passengers, more goodbyes, more sadness and thoughts I may never see these student friends again, kids my own kids’ ages, and hear the, 'thank you!'s that follow getting them home safely, or to a social gathering or football game,” he said. “It got very personal very fast for my riders and for me. I was driving the second it started and I was driving the second it ended. It isn't just a loss of income for me; it's also a loss of fulfillment.”
Below is the letter in its entirety that Uber sent to users Wednesday to announce that it would be closing its Auburn operations:
First off, we wanted to say thanks for riding with Uber, and for your support over the past several months as we worked to make a home for Uber in Auburn. While it's clear that riders like you value access to safe, innovative ways to move around town, unfortunately the City Council has not embraced ridesharing.
Tomorrow we’ll be temporarily suspending operations in Auburn while we work toward a statewide regulatory framework for ridesharing. We simply will not operate under regulations that do not allow us to provide riders a positive rider experience and offer drivers the best economic opportunities.
Despite the new standard for safety we've set with our multi-layered background checks and $1M commercial insurance policy, the Auburn City Council rushed through burdensome regulations that don't make sense for this new option, and make it impossible for ridesharing to exist in the city. It's disappointing that Auburn City Council chose not to join the ranks of over 20 US jurisdictions that have welcomed new transportation alternatives like Uber and created sensible regulatory frameworks for ridesharing.
We hope the state legislature sees the need for ridesharing in Alabama, and creates a statewide solution that embraces opportunity and choice, and enables you to ride again in the future. We'll keep you updated on our progress.
Again, we appreciate your support, and thanks for riding Uber.
Click here for a graphic explaining Uber's insurance policy.