Uber should lose its place in the taxi regulatory queue

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The Soapbox

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It's your turn.
It’s your turn.

Uber CEO Travis Kalanick once used the cover of Ayn Rand’s novel Atlas Shrugged, one of the sacred texts of the modern libertarian movement, as his avatar on Twitter. Ayn Rand studied German philosopher Friedrich Nietzsche, and Kalanick’s behavior is evocative of two of the protagonists of Atlas Shrugged, John Galt and Hank Rearden, literary prototypes of the Nietzschean “Übermensch” (frequently translated into English as “Superman”).

The Randian Übermensch’s personal philosophy of “It’s my way or the highway!” could be the corporate motto of Uber in its dealings with regulators. This may be the reason that Kalanick chose the name Uber for his ride-sourcing company, which seeks to “disrupt” the taxi industry as thoroughly as John Galt disrupted the world in Atlas Shrugged.

However, Manchester, NH, is not a fictional setting.

Background Checks

One of the questions that has troubled state and city regulators, including the majority of the members of the Manchester Board of Mayor and Alderman (BOMA), is why Uber will not acquiesce to their reasonable requests for a more thorough investigation of their drivers’ backgrounds. These BOMA members want Uber to use the Interstate Identification Index (Triple I), a national database of criminal histories maintained by the FBI and the National Crime Information Center, rather than the third-party provider Hirease, which handles Uber’s background checks in New Hampshire.

Critics of their proposal for tighter background checks claim, “Taxi drivers commit crimes, too.” That’s true, but there are procedures in place to prevent that. Without those regulations, there would be more incidences of crime perpetuated by cabbies. The stringent market entry controls of the taxi industry work to weed-out misfits from the job applicant pool. With thScreen Shot 2015-04-28 at 2.59.47 PMe loss of those entry controls with the advent of ride-sourcing, the possibility for malfeasance grows exponentially along with the number of entrants.

Triple I is not fingerprint-based as is the Live Scan background check system that many states and municipalities mandate for taxi cab drivers, but both are “dynamic” databases. Dynamic databases contain up-to-date criminal records from every municipality, county and state. Such a database is superior to those accessed by Hirease when running record searches on prospective drivers. Those databases are neither as timely or as thorough.

Triple I, which is used by the New Hampshire State Police and the Manchester Police Department, offers up-to-the-day it-is-used coverage. It covers the entire history of the person being researched, whereas a Hirease check only goes back seven years. Furthermore, Triple I is economical, costing only $25.

So then: Why doesn’t Uber agree to BOMA’s request that it use Triple I? If it had, it would be legally operating in the City of Manchester today.

IMG_6489Remarkably, Uber has threatened to pull out of cities that did mandate Triple I and fingerprint-based checks, and even allegedly pulled out of San Antonio, Texas. “It’s my way, or the highway!”

In Manchester, Uber did not cease operations once its agreement with the City was effectively terminated by BOMA, and its drivers now are operating illegally as gypsy cabs. One can reasonably surmise that is how Uber has behaved in other cities where it spurned attempts at regulation. Sources say there are concerns that Hirease’s background checks of drivers currently serving Manchester were not actually conducted, and that Uber doesn’t know how to properly access New Hampshire criminal records.

Follow the Money

Mark “Deep Throat” Felt famously told Bob Woodward of the Washington Post to “Follow the money” to unearth the truth about the Watergate scandal. Following the money reveals a company that went to the capital markets and is the premier ride-sourcing company in terms of financial clout. Uber is flush from a recent investment of $258 million and has a valuation estimated as high as $40 billion. Forty billion!

So what has it done with that cash? Uber is hiring drivers. It is trying to sign up as many drivers as possible, regardless of their criminal backgrounds, and get them out on the road ASAP.

I believe this is the key to explaining Uber’s “The public-be-damned!” philosophy. Uber is attempting to throttle potential competitors by taking a commanding share of the ride-sourcing business as fast as possible so it can box out other companies such as Lyft and Sidecar from Manchester and other cities. By immediately dominating as many markets as it can, Uber’s suzerainty over app-hailed vehicles-for-hire will dry up capital for its competitors.

“Über” means “Over” in German, and a suzerain is an overlord.

Charlie Baker’s Proposal

If you consider my logic suspect, consider this: Uber East Coast general manager Meghan Joyce said that her company supports Massachusetts Governor Charlie Baker’s proposed ride-source regulations mandating a background check through the Commonwealth’s Criminal Offender Record Information (CORI) system. Unlike Triple I, which reports nationwide on all offenses for the life of an applicant, CORI only covers the Commonwealth and has a statute of limitations on crimes that are not murder, manslaughter, or a sex offense. For misdemeanors, CORI only goes back five years, and 10 years for a felony. (Hirease’s background checks only go back seven years.)

One of the problems with ride-sourcing reported nationwide has been the sexual harassment and stalking of women passengers, crimes that do not reach the level of a sex offense. Another has been robbery. CORI and Hirease will not reveal these crimes if they occurred outside their statute of limitations, or took place out of state. In the case of Hirease, the criminal record of someone who was imprisoned more than seven years ago and recently was freed likely will not appear on their background check.

Meghan Joyce said that Uber also supports Baker’s call for closing its liability donut hole by requiring that all ride-source drivers carry a $1 million insurance policy. Uber’s insurance only covers a driver while actually ferrying a fare. Drivers are responsible for insurance covering the trip to pick up the fare and the post-drop-off period, where the driver navigates the streets while awaiting another customer. Many insurance companies will not cover an accident incurred while using one’s vehicle as a ride-source driver.

Uber is ready to concede to the Commonwealth of Massachusetts because Boston fought it so hard when it entered that market. The Hub’s regulators waged a grudge match that finally got Uber to agree to provide the trip data needed to verify Uber’s regulatory compliance. A hardline brought the would-be overlord to heel.

Local sources estimate that a switch from Hirease to Triple I might disqualify a majority of Uber’s applicants. If Manchester allows Uber to continue to use Hirease with no mandate for Uber to provide driver information (yet another regulatory stipulation Uber has resisted nationwide), there is no way to know if background checks were even conducted. South of the border, Uber will go along with CORI, which is still less stringent than Triple I, as it will not winnow out as many applicants and thus allows Uber to put more drivers on the road than Triple I would.

Free Market Competition

Alderman Garth Corriveau.
Alderman Garth Corriveau.

On his Facebook page, Alderman Garth Corriveau, the big Uber supporter on BOMA, said, “Free market competition benefits all consumers.” The problem with Garth’s statement is that Uber isn’t exactly known for promoting “free competition” once it is in a market.

Uber not only seeks a monopoly position in the ride-sourcing market, but its unregulated “gypsy cabs,” upon entry into a market, put intense pressure on taxi and limo operators, eroding their market share and better positioning Uber for achieving its sought-for role as overlord.

Once established, past practices indicate Uber will try to maintain market share by using dirty tricks to hurt competitors. It will start reducing driver income, a practice that accelerates when it dominates a market as drivers have nowhere else to go. Ironically, the dirty tricks and falling incomes that characterized the “taxi wars” of the 1920s and ’30s created the anarchy that caused the industry to be regulated in the first place.

Taxi Regulatory Queue

Academic research indicates that dispatch taxi services (as opposed to hail taxis and cab stands where taxis queue for customers) require a more flexible regulatory approach. In reality, Uber is a dispatch taxi service and ride-sourcing should be regulated. BOMA members know there is a niche for ride-sourcing and are willing to permit the market to develop while ensuring public safety. However, since Uber has proved a selfish bully in the process of drafting new rules, BOMA should consider it a taxi that lost its place in the queue.

Uber should be cut out of the process it gamed by the elected officials it has openly defied. BOMA should go back to the drawing board and draft its own ordinance embracing the best practices of other municipal regulators. A new ordinance should mandate Triple I background checks; the sharing of trip date with the City to ensure ride-source drivers obey the rules; a privacy regulation covering trip and customer data; and a minimum of $300,000 in commercial insurance for drivers to close the “donut hole” in Uber’s policy coverage.

Ride-sourcing is now a part of Queen City life and is here to stay. The question now is whether the proper and prudent regulation of this new market will be achieved in the interest of the citizens of Manchester by the elected officials who represent them, or whether a stripped-down regulatory regime will be imposed on us by an outsider: Whether our interests will win out over the selfish interests of our would-be overlord Uber.

Uber’s pursuit of profits must not be allowed to take precedence over public safety.

John Hopwood
John Hopwood


Jon Hopwood is a freelance editor and writer who lives in the West Side’s Ward 10 and appears weekly on Manchester Public TV on “Ward 13,” which airs Sunday evenings at 9p.m. and throughout the week. The Queen City native is the Manchester Elections Examiner on examiner.com.

Manchester Ink Link welcomes your submissions to The Soap Box, a place where you can express your opinion on just about anything. Send submissions to Editor Carol Robidoux at robidouxnews@gmail.com, subject line: The Soapbox. Please include a brief bio and recent photograph of yourself.


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About this Author


Carol Robidoux

PublisherManchester Ink Link

Longtime NH journalist and publisher of ManchesterInkLink.com. Loves R&B, German beer, and the Queen City!