ITHACA, NY – Uber, the app-based ride-sharing service that has revolutionized the way people get around New York and other major cities, is making a push upstate which could include Ithaca.

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WGRZ Buffalo reports that Uber is targeting two major upstate markets: mid-to-large cities like Syracuse, Rochester and Buffalo, and college towns like Ithaca.

It’s currently illegal for the ride-sharing companies to operate upstate, but some state lawmakers – and Uber’s substantial marketing arm – are pushing for legislation that would open the market to them. The first attempt to pass these laws failed earlier this year, but neither Uber nor the legislators pushing the idea forward are giving up, according to an article from the Albany Business Review.

Ride-sharing: pros and cons

Ride-sharing services like Uber and its primary competitor, Lyft, claim to offer a number of benefits to cities where they operate. They have also been the subject of a great deal of criticism for business practices some consider unfair and exploitative.

A primary selling point ride-sharing companies bring to the table is job creation. Uber estimates it would create 13,000 jobs across upstate New York if it were legalized, according to a story from the Democrat and Chronicle.

The companies also promise better service. On the consumer end, ride-sharing services can be considerably more convenient to use than traditional taxi services. Users don’t have to deal with a dispatcher, payment is automated, and wait times for pickup are often shorter.

Uber has even gone so far as to promote itself as a reliable post-party”designated driver” for intoxicated college kids, according to a New York Times story.

A Mercedes S-Class in black, the color favored by Uber drivers. Photo by Jason Lawrence from Flickr.

Opposition to ride-sharing

While Uber and Lyft characterize themselves as disruptive technologies that are shaking up a stagnant market, those on the other side see things differently.

“Uber’s success is the result of illegal operation and the outsourcing of costs and risk, not the application of technology,” wrote John Kadar, president of Ithaca Dispatch, in a letter to Ithaca’s Common Council earlier this year.

Taxi companies are subject to heavy regulation. Drivers must be commercially licensed, and the companies must pay for expensive commercial insurance. According to the National Association of Insurance Commissioners, these policies tend to cost between $5,000 and $7,000 per year.

Regulation on ride-sharing services are considerably less strict. A Philadelphia journalist who went “undercover” as an Uber driver wrote “the application was just uploading my car’s information, banking details and my Social Security number for a background check. A couple weeks later, I got a text: I was in.”

Ride-share drivers rely on their own personal vehicle insurance policies, with limited supplementation from ride-sharing companies. A story from the San Francisco Chronicle suggests that insurance companies may deny personal insurance claims for accidents that happen while a driver is effectively acting as a taxi.

How is Ithaca preparing?

Kadar says that he and other upstate taxi companies will be sending their own lobbyists to represent their interests to the state legislature against those of Uber and Lyft.

“Uber and Lyft are lobbying the New York State Legislature to pass legislation that will pre-empt municipalities from regulating them like taxicabs are regulated,” Kadar says. “Our interest is to have a level regulatory playing field. The momentum is favoring Uber and Lyft. It will be a down and dirty struggle.”

Meanwhile, Ithaca officials have been working for several months on a revision of Ithaca’s current taxicab regulations. The original plan was not only to bring an out-of-date system current, but also to prepare for the eventuality that ride-sharing could come to Ithaca.

A plan was in place that would normalize the process for licensing new drivers and vehicle inspections. It would also require an insurance minimum for all vehicles for hire. These regulations were intended to place local taxi companies and ride-sharing services on a more level playing field.

However, the city has recently pulled back from this approach. “We currently are not authorized to regulate companies such as Uber… the issue is really complicated and I think that’s why the governor’s have stepped up and said, ‘We don’t think you can legislate this on a municipality to municipality level,’” said City Clerk Julie Holcomb, who has been heading up the effort.

“There really needs to be statewide regulations and then we’ll figure out how we need to amend our legislation from there,” she added.

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Michael Smith

Michael Smith reports on politics and local news for the Ithaca Voice. He can be reached via email at msmith@ithacavoice.com, by cell at (607) 229-0885, or via Google Voice at (518) 650-3639.