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DeFazio: Uber, Lyft need to ‘clean up their acts’

DeFazio said ride-hailing companies must change if they want partnerships with agencies using federal dollars

Chairman Peter DeFazio, D-Ore., left, and ranking member Rep. Sam Graves, R-Mo., conduct a House Transportation and Infrastructure Committee hearing in February 2019. DeFazio said the committee is still struggling on how to regulate ride-hailing companies like Uber and Lyft. (Photo By Tom Williams/CQ Roll Call)
Chairman Peter DeFazio, D-Ore., left, and ranking member Rep. Sam Graves, R-Mo., conduct a House Transportation and Infrastructure Committee hearing in February 2019. DeFazio said the committee is still struggling on how to regulate ride-hailing companies like Uber and Lyft. (Photo By Tom Williams/CQ Roll Call)

If ride-hailing companies Uber and Lyft hope to ever partner with agencies that use federal dollars, “they are going to have to clean up their acts,” the chairman of the House Transportation and Infrastructure Committee said Wednesday.

Noting reports of explosive growth of those companies as well as low-paid and unvetted drivers, the panel’s subcommittee on highways and transit is wrestling with how best to regulate a burgeoning industry that has recently advocated for federal dollars as it grapples with massive losses.

[Fintech Beat explores how Uber is much more than a ride-sharing company]

“This is not a sustainable business model,” said Chairman Peter A. DeFazio, D-Ore., adding that Uber posted more than $5 billion in losses in the second quarter of 2019, while Lyft reported $650 million in losses — “despite employing felons, sex predators, paying abysmal wages.”

DeFazio said the companies recently began reaching out to ask lawmakers to consider subsidizing their operations if they partner with transit agencies and local governments to provide connecting service to existing public transportation.

But while DeFazio said the committee will “certainly evaluate” the industry’s requests, he said reports of attacks on customers by unvetted Uber and Lyft drivers, as well as sub-minimum wage pay have not helped their cause.

Uber and Lyft, which represent about 98 percent of the ride-hailing industry, declined an invitation to testify Wednesday — a fact that DeFazio and other members brought up repeatedly during the more than two-hour hearing.

“The failure today of Uber and Lyft to appear is a telling sign that they don’t want to answer questions on the record about their operations,” DeFazio said, speculating that they didn’t show up because they didn’t want to discuss their public safety problems. In letters dated Oct. 14, DeFazio admonished Lyft and Uber executives for not attending the hearing.

In a statement, Lyft spokeswoman Campbell Matthews said the company has “has had many productive discussions with member offices of the House Transportation and Infrastructure subcommittee and are encouraged by the willingness to collaborate on meaningful solutions and policy.”

“They didn’t come to see me,” said DeFazio.

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‘Economic opportunity’

Matthews said the company “provides economic opportunity for drivers, and affordable, reliable transportation for riders.” The company screens driver-applicants for criminal offenses and driving incidents and hires a third-party company to conduct annual criminal background checks of drivers.

“We take this work extremely seriously and believe safety is fundamental to these efforts,” she said.

Uber, in a statement, said “we share Congress’ focus on keeping Americans safe on rideshare,” adding that they’ve beefed up their screening process and added safety features to their apps, including an emergency button for riders.

The House is considering at least one bill aimed at regulating the industry. Reps. Christopher H. Smith, R-N.J., and Tom Suozzi, D-N.Y., introduced legislation, that would push states to require ride-share vehicles to have front license plates and codes on back passenger-side windows that riders could scan on a smart device to verify their ride before getting in.

The bill would also require the GAO to study the incidence of assault and abuse of riders and drivers as well as the nature of background checks of drivers and state laws requiring such background checks.

Though no government statistics exist on the number of assaults on passengers or drivers, an April 2018 investigation by CNN found 103 Uber drivers had been accused of sexual assault or abuse.

The bill would also make it unlawful for anyone other than Uber or Lyft to sell a ride-sharing sign. Smith said Uber or Lyft signs are commonly available for sale online for as low as $10.

Last March, University of South Carolina senior Sami Josephson was murdered after ordering an Uber and being picked up by a different driver.

Paul Miller, legislative counsel for the Transportation Alliance, a trade association representing taxi companies, sedan and limousine fleets, airport shuttles and other transportation companies, urged the firms to use fingerprint-based background checks on drivers. Sen. Richard Blumenthal, D-Conn., has also called for such checks, and DeFazio urged their use in a 2015 letter to then-Uber CEO Travis Kalanick.

Other witnesses, including Larry Willis, president of Transportation Trades for the AFL-CIO, suggested reclassifying the contractor drivers as employees.

While Republicans on the panel largely agreed that passengers should be protected, some worried that reclassifying drivers could hurt their communities’ access to the programs.

“I worry reclassifying contractors takes away the flexibility drivers rely on to drive when they’re not at their main job,” said Rep. Carol Miller, R-W.Va., who said her rural district has relied on such services for both college students and the elderly.

Rep. Lloyd K. Smucker, R-Pa., said many Uber and Lyft drivers are simply people who want a part time job.

“The idea that I’ve heard in this hearing today bashing all Uber and Lyft drivers due to the criminality and horrific crimes of a few of them is insulting,” he said.

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