Technological Disruption, Monopoly and Politics in the For-Hire Vehicle Industry

In the rapid growth of the online gig economy, especially with the unprecedented growth of Uber in the transportation industry, many workers feel squeezed and at times dehumanized by a business structure that promises independence but often leaves them at the mercy of increasingly powerful companies. There is nothing wrong with being an independent contractor or working in the "gig economy", but there is a problem when the entity in question is named Uber.

Drivers are becoming increasingly dissatisfied and disillusioned by Uber......and no wonder why. Because Uber is not the Salvation Army and is not out to create jobs, but is out to continue to overly inflate the value of their company and then cash out via an IPO. Don’t be foolish, Uber is not looking to be "your private driver", but looking to steal your money via surge pricing (and place you in danger in the interim), destroy full time jobs, destroy existing businesses and upend the for-hire vehicle industry for the worse. People may not be, or may never have been satisfied with yellow cabs, but at least they are regulated by the NYC Taxi and Limousine Commission. This means that the vehicle has been inspected and deemed to be safe for operation and the driver has been vetted and deemed to not be a dangerous driver.

Ask any Uber driver in New York City and they will tell you that they have been relegated to being glorified taxi drivers and their recent protests and strikes are evidence of the cracks in the floor beneath Uber. Uber drivers have finally begun to speak out against the company that lies to them and the public. Uber makes false promises to its drivers and lulls the public into a false sense of security in the use of its service. Uber wants to have its cake and eat it too. They want to completely control their drivers, but keep them classified as independent contractors. This is so because if the Uber driver were classified as an employee, then Uber’s business model would be completely upended. Lawsuits against Uber have been filed all around the country, but the most prominent is one pending in Federal Court in San Francisco. Drivers there are claiming benefits under the Fair Labor Standards Act, which only applies to employees and not independent contractors. Whether the Uber drivers will ultimately prevail in the lawsuit is irrelevant because the reality is that Uber is likely to settle this case in the end. This is what will happen because Uber cannot afford to have an adverse ruling from the Courts that would threaten its muti billion-dollar venture.

By all definitions and in all reality, under New York law, Uber drivers are employees and are entitled to certain protections, but this would be the death knell to Uber, so in the meantime Uber will continue to churn its PR machine (via a former political strategist best known as the campaign manager for President Obama's 2008 presidential campaign) and will continue to pay its lobbyists for access to politicians who now favor Uber (after the political contribution is made) all with the intent on neutralizing the threat that Uber drivers currently pose to its business. Politicians are pro-Uber because they do not want to be seen as anti innovation, anti-competition and/or against technological advances. What these politicians should be focusing on is simple. They have been charged with protecting the health, safety and welfare of its citizens. Despite their clear obligation, New York politicians all have made it clear that Uber is here and it is here to stay. The playing field is not level and the politicians in NYC have completely abandoned the traditional car services that have served the local communities of the 5 boroughs of NYC for decades. These mom and pop shops will soon be gone just like the bodegas of the past. Barnes and Nobel is in and the little bookstore in the neighborhood is gone. Or just like in the move “You’ve Got Mail……. Tom Hanks’ Fox Books and his chain of "mega" bookstores is in and the independent bookstore run by Meg Ryan, The Shop Around The Corner, is out.

The yellow cabs may have become what they are today (run down second class vehicles with a second class service for hire) because the City of New York and the cab owners always held a monopoly over these medallions. At their height, before Uber, the cost of a medallion (the plate attached to the hood of each yellow cab is NYC) was north of one million dollars. Today that number is significantly less, all to the dismay of the banks that lent monies to the medallion owners with the belief that the monopoly they held over the economy that required on demand transportation would continue to be in their pockets forever. Some say that the medallion owners and the banks that lent them money deserve it because the advent of Uber made these cab owners come to the harsh realization that they are no longer needed, or not needed nearly as much as they were before and they should have used technology to their own advantage before Uber was born. Well, the yellow cabs are a day late and a dollar short. That train already left the station. Yellow cabs are in short supply and always will be, but the need for them is decreasing every day. This is not only bad for the for-hire vehicle industry, but bad for the City of New York as a whole, as it is the City that reaps the financial benefits of selling each one of these medallions. The NYC political machine may not care right now because it is still sexy to support Uber. But when Uber shows its true colors and completely upends an industry that has provided safe and reliable transportation to generations of New Yorkers and millions of visitors, what will the politicians do then?  

Make no mistake, Uber and its founders are true geniuses, but lets not be foolish to think that they are operating as a not for profit organization to create jobs and better the economy. As soon as Uber makes its next big move, we will all have to take a bite out of reality and deal with the disaster that lies in its wake. I have my opinions about what that next move may be, but use your imagination and come to your own conclusions. Either way, some disruption caused by Uber to the for-hire vehicle industry was for the better, but remember the old adage about the law….it should remain stable, but not stand still. I believe the same holds true for the for-hire vehicle industry. Change over the past few years has been good, but the politicians (who are usually lawyers) that enable Uber to operate unimpeded and even encourage their disruptive conduct, should keep the legal adage in mind. The for-hire vehicle industry should not stay idle and must change with the times, but if things keep going the way they have been of recent, we may all find ourselves with an inferior for-hire transportation industry in New York City……and then who will the politicians blame?

Uber Drivers in New York City Protest Fare Cuts

Personally, I am not a fan of unions in the for-hire vehicle industry, but as far as I am concerned, let the Uber drivers protest and strike till they are blue in the face. Uber portrays themselves as the Salvation Army that out to help the working class people and create jobs. They do noting of the kind. All they are doing is taking full time jobs away from traditional limo drivers as well as taxi drivers and making it into a part time industry for all. Uber loves the PR they get for allegedly helping the senior citizens of the world find work after retirement by just using their cars for some extra cash. The answer to what they are doing will not stare anyone in the face, but think about it for a while and speak to some people who works in the industry and you will find out that Uber is the anti-christ. They would likely rip your heart out with a spoon for a few extra pennies per ride.......and they actually do with their surge pricing. Its amazing how people don't understand why their trip from Wall Street to Water Street (a few blocks away) cost approx $500.00. How can someone agree to pay for a service in advance without knowing how much it will cost at the end and without knowing what Uber's surge pricing is. Do people often go into a jewelry store and take a gold necklace to the counter and say "Ill take it" without knowing how much it is and whether the jeweler is going to charge you double or triple the amount simply because, at that particular moment, supply is low and demand has high. But this is just financial rape. Go on the news and read the sickening stories about the violence and other horror stories that passengers of the Uber experience have had to endure. If you did your homework, perhaps you would think twice before using Uber as opposed to some other well established and respectable car service. 

Comments made to DCA by Steven J. Shanker, Esq. re: amendments to NYC Sick Leave Act

In the City that never sleeps, a for-hire vehicle base station never closes. The members of the Livery Roundtable run businesses that operate 24 hours per day 365 days per year. As such, a number of issues face the livery industry that is not prevalent for the average employer who does not operate 24/7/365. The requirement that livery bases be staffed every single minute of every day has caused certain provisions of the Earned Sick Time Act to result in unintended adverse effect upon these employers.

The average company in New York City is not open on Christmas, New Years Day, Labor Day and a number of other holidays. Members of the public need for-hire transportation every day, but on these and other certain well-defined holidays, the public is often traveling to gather with friends and family to celebrate. The added travel by the public on these days makes our clients even busier than usual, thus they need each employee who is scheduled to work to actually show up. Of course, most people prefer to not work on these holidays. This causes many employees to “call-out” and claim they are sick and unable to work when such is not truly the case. This ultimately leaves our clients short staffed. This not only results in the obvious adverse effects upon the operations of our clients business, but also causes the transportation needs of our clients’ customers to be unable to be satisfied. 

Holidays

As the law now stands, if an employee calls out on a holiday at the last moment, the employer has virtually no recourse. The employee is not required to produce a doctor’s note to verify that they are ill and the employer is left short staffed, thus causing harm to our clients business. Their reputation becomes sullied when they do not have sufficient operators to answer the telephone and less than the number of anticipated dispatchers that serve to ensure that the requests for transportation from the public are effectively sent to the for-hire vehicle operators who are the ones who are actually providing transportation to the public. Thus the vicious cycle begins of there being a holiday where more people are seeking to travel, but the for-hire vehicle bases that facilitate such travel are unable to effectively operate because they have a number of employees who did not come to work under the guise of “being sick”.

We believe it is not on onerous burden on the working persons of the City who are scheduled to work on certain well-defined holidays to be unable to use an accrued sick day unless they produce a doctor’s note to document their illness. This would be more equitable because it will allow the employer to be able to rely upon those who are scheduled to work on certain well defined days to show up to perform their job duties, all while permitting those who are legitimately sick to take the day off without any fear of adverse consequences to their job or their income.

Minimum increments for use of paid sick leave

While the New York City’s Earned Sick Time Act allows an employee to earn up to 40 hours of sick time per year, the employer can only mandate that the employee be paid for up to 4 hours if the employee takes a sick day. In other words, if an employee is scheduled to work 8 hours and calls out sick for the day, the employer can only require that the employee be paid for 4 hours. For an employee who has 8 or more hours of time in their “sick bank”, taking an entire day off (8 hours), but only asking to be paid for 4 hours leaves an additional 4 hours in the employee’s “sick bank”. The unintended effect of this is that employees are using the system to obtain 10 sick days instead of 5. The result is that the employee takes 10 sick days and is paid for a total of 5 of them. In essence, time and experience has proven that an employee is more satisfied to take off 10 days and only be paid for 5 of them because it allows them to effectively use some of the sick days as personal days. This was not the intent or purpose of the law.

We believe it would be more equitable if an employer can require that if an employee has 8 or more hours in their “sick bank” and they take 8 hours off, then the employer have the right to pay the employee for the full 8 hours. If the employee has less than 8 hours in their “sick bank”, then the employer should be able to pay the employee for whatever hours remain in their in their “sick bank”. This is not the act of giving something to the employer while taking something from the employee, but simply the act of creating a system where the employee is kept honest in using a sick day for a day in which they are truly sick. To do otherwise, allows the employee to game the system to maximize their days off, all the while hurting the operations of our clients businesses. There does not seem to be any legal or factual rationale for limiting the employer to mandating that an employee who has more than 4 hours in their in their “sick bank” to use and be paid for only up to 4 hours of time off.

Carry Over

As the law now stands, an employee may carry over up to 40 hours of unused sick time from one calendar year to the next, unless the employer has a policy of paying employees for unused sick time at the end of the calendar year and providing the employee with at least 40 hours of sick time for the immediately subsequent calendar year on the first day of such year. If the employee is paid for all of their unused sick time at the end of the year, then the employee is paid for exactly what they earned. In such circumstances, there seems to be no rationale for requiring the employer to providing the employee with at least 40 hours of sick time for the immediately subsequent calendar year on the first day of such year. This would, in essence, be penalizing an employer for paying the employee for their unused sick time at the end of the year. Why should an employee be entitled to 40 hours of sick time that they did not earn at the beginning of the calendar year when the employer paid them for their unused sick time at the end of the preceding year? Under these circumstances, the employee should be required to earn each hour of sick time as if they had used all of their sick time prior to the end of the preceding year. We believe it would be more equitable if an employer chooses to pay employees for all unused sick time at the end of each year for the employee to earn “new” sick time in the usual fashion. To do otherwise, would give the employee an unearned benefit by being given sick time that they did not earn. This surely was not the intent and purpose of the law

Unions and Collective Bargaining Agreements

One of the premises behind the enactment of the New York City’s Earned Sick Time Act was that an individual employee does not have the bargaining power to be able to require employers to give them certain defined sick leave benefits. The law enables the employee to obtain these benefits automatically because without it, the disparity in bargaining power between the employee and the employer will result in the employee gaining little or no sick leave benefits. This is simply not the case when a union represents a class of employees and their employment relationship is governed by a Collective Bargaining Agreement. In such a case, the union that represents a group of employees is arguably in a much greater position to be able to bargain with an employer to obtain at least as much sick leave benefits for the employee union members as possible. In these cases, there is no disparity in bargaining power. To require each employer to still comply with the mandates of the New York City’s Earned Sick Time Act places the employer in a worse position because the mandates of the Earned Sick Time Act thus become the floor for negotiations and not the norm.

A union regularly obtains added concessions from the employer, such as 48-56 hours of sick time for each employee per year. When this occurs, the parties should not be bound by the prohibition that an employer can only require a note from a doctor after more than 3 days of consecutive absences. In other words, if an employer who is subject to the terms of a Collective Bargaining Agreement is willing to give employees the ability to earn and/or use 48-56 hours of sick time per year, then the employer should be able to bargain with the union to require the employee to produce a note from a doctor to document their sick status after 2 days of consecutive absences. Under the law, as it now stands, the employer may be required to bargain with the union and give more benefits than the law requires, but is not permitted to require any benefit in return. In a nutshell, when there is a union and a Collective Bargaining Agreement, there is no rationale, since there is disparity in bargaining power between the employee and the employer, to require the employer to comply with each and every provision of the New York City Earned Sick Time Act.

Pattern of Abuse

Employers are permitted to take disciplinary action against employees who use sick time for purposes not covered by the Act, but on the whole, if the employer is not able to ask the employee to produce a doctor’s note for certain days off, then there is virtually no way for the employer to verify that the employee used sick time for purposes not covered by the Act. Furthermore, while Employers are permitted to take disciplinary action against employees who engage in a pattern of abuse of leave, there is no guidance for employers as to what the Department of Consumer Affairs (“DCA”) would consider to be a “pattern of abuse”. Some employers may consider abuse to be the use of unscheduled sick time on 3 adjacent weekends, while the DCA may not consider this to be a pattern, but merely a coincidence. The same holds true for holidays. Employers are gun shy in taking adverse action against an employee even in the face of a pattern of abuse simply because the employer has no guidance as to what the DCA may find if a complaint is made by the employee and thus, what penalties the employer may face if the DCA disagrees with the employer’s view as to what constitutes a pattern of abuse. We believe it would be more equitable if an employer is given some leeway in determining a pattern of abuse. Such leeway would be afforded and fairness can be meted out when the burden is placed on the employee to provide some kind of documentation or objective proof to document the use of unscheduled sick time on 3 adjacent weekends, 2 consecutive Mondays (to enable the employee to have a longer weekend) or the use of unscheduled sick time on 2 out of 3 consecutive holidays.

Overall, the law is never perfect, especially at the it is enacted, but when our local government that enacted such rules requests comments from stakeholders in certain industries, such as the for-hire vehicle industry, I sincerely hope that they take such comments under well advisement and consider the negative impact as well as the rationale behind such rules. To do otherwise, would be tantamount to purposefully perpetuating certain aspects of a law that has no rationale and is disproportionately unfair to one party to the equation without any rhyme or reason. 

SAFETY FOR ALL OR TNC SELF–REGULATION FOR ALL

A bill is pending in the State Legislature in Albany that would allow app-based car services, like Uber, to operate throughout the state in a manner which is dangerous to the health, safety and welfare of the riding public. Uber is now limited to the New York City area where regulation of the for-hire vehicle industry is heavy. On October 19, 2015, the Assembly kicked off a series oftwo closed-doorroundtablediscussions on the bill– introduced byAssemblyman KevinCahill and State Sen.James Seward – thatwould allow app-based companies like Uber, to provide for-hire transportation using non- commercial private vehicles. The bill would create quasi-part-time commercial insurance for people using their personal vehicles. Most importantly, the bill would also create two different sets of safety regulations in the process.

On November 19, 2015, another roundtable discussion was held before a panel of state lawmakers who promised to take the concerns of all stakeholders into account as they seek to legalize upstate car-hailing operations. The members of the legislature seem to agree that every entity is a little bit different, but believe that they are all in the transportation field. This makes it very important for people in New York to know they can rely on that ride, that they are provided with certain insurance coverage and that they are going to be safe in their travel. The State Senators seem to believe that there is room for everyone to operate, without too much damage. It is the danger to the unsuspecting public that we are most concerned about.

During the November 19, 2015 discussion, taxi representatives in upstate New York repeatedly said that they do not believe the app-based companies do a good enough job screening their applicants before letting them ferry passengers, and that it is unfair for the app companies to be subject to different rules from traditional taxis. They targeted argued that the app based car-hail services would endanger the jobs of taxi drivers and of service workers in dispatch offices and garages, replacing the full-time work with part-time driving positions.

Avik Kabessa, the CEO of Carmel Car and Limousine Service as well as a permanent member of the Livery Roundtable (“LRT”) argued that allowing Uber and Lyft to self-regulate can be disastrous because there would be no penalties for the app-based companies if they stopped conducting background checks or ceased providing insurance. He said he had no problem with the idea of Uber and Lyft operating upstate as long as they are subject to the same rules as traditional car services. Kabessa also said he had no issue with Uber and Lyft offering their drivers part-time insurance - active only when a driver is available in the app to take passengers - as long as his own affiliated drivers could also utilize such a part-time insurance policy.

Putting the insurance component aside, there is a significant difference in the safety rules between the proposed TNC’s and the rest of the taxi and car service industry. Unlike how the TNC’s would operate under the proposed bill, the traditional taxi and car service driver must hold a specific license as well as undergo rigorous background checks and fingerprinting. The taxi and car service vehicle is also required to be inspected more often than a private vehicle and such license is subject to being suspended or even revoked if certain regulations are not adhered to. Uber’s answer to all of these safety issues is that they are unnecessary since they will self-regulate. TNCs have typically used low-cost, third-party background checks that have repeatedly proven to not be thorough enough to prevent felons from getting behind the wheel.

The most important issue for the Legislature to consider is not simply the insurance provision. The questions they should be asking and seeking answers to are what set of rules should a company adhere to when they are providing transportation to paying customers. The type of car – or taxi – a customer rides in, or how they booked the ride, should not matter. New York State must ensure that its passengers are safe no matter what mode of transportation they choose. The manner in which transportation service is booked, whether by a smartphone application or a call to a car service, is of no consequence. After all, there is no difference in the service provided by companies like Uber, taxis or other car services. As such, shouldn’t they all be held to the same set of safety standards? If the State Legislature believes that traditional safety rules should not longer apply to transportation, then such rules should be stricken for the entire industry. It should be safety for all or self-regulation for all. Safety for some and TNC self-regulation for some is hypocritical because it creates two sets of rules that govern the provision of identical service

This is not simply a matter of the taxi and car services resisting change to the status quo. This is all about the health, safety and welfare of the riding public. The question is not whether the technology used to book a ride should be regulated, but rather should the driver and vehicle providing the transportation be? Regardless of what type of insurance should be provided, the main focus should be on the obvious reality that not requiring providers of transportation to be held to higher safety standards, will place unsuspecting riders at grave risk. This is something that the State simply cannot alllow. 

NYC Taxi and Limousine Commission -Public Hearing on May 28, 2015 at 10:00am

The Taxi and Limousine Commission is considering changing its rules. The change would create a new TLC Rule chapter governing the licensure of FHV Dispatch Applications and amend the rules to enhance existing requirements for FHV bases that use their own smartphone application to dispatch vehicles. 

The Commission will hold a public hearing on the proposed rule. The public hearing will take place at 10:00 a.m. on May 28, 2015. The hearing will be in the hearing room at 33 Beaver Street – 19th Floor, New York, NY 10004.

How do I comment on the proposed rules? Anyone can comment on the proposed rules by:

•   Mail. You can mail written comments to the Taxi and Limousine Commission, Office of

  Legal Affairs, 33 Beaver Street – 22nd Floor, New York, New York 10004.

•   Fax. You can fax written comments to the Taxi and Limousine Commission, Office of Legal Affairs, at 212-676-1102.

•   Email. You can email written comments to tlcrules@tlc.nyc.gov.

•   Website. You can submit comments to the Taxi and Limousine Commission through the

  NYC rules Web site at www.nyc.gov/nycrules.

•   By Speaking at the Hearing. Anyone who wants to comment on the proposed rule at the public hearing must sign up to speak. You can sign up before the hearing by calling 212-676-1135. You can also sign up in the hearing room before the hearing begins. You can speak for up to three minutes. 

Do We Really Want Uber to Kill The Community Based Car Services?

New York City’s defining feature—and indeed the very foundation of this close-knit community—is a vibrant local economy. It is a place of small stores and sidewalks; a place where public and private space overlaps; and a place where we buy goods and services from businesses owned by our neighbors. The proliferation of “new market entrants” has weakened our local economy and is threatening to erode the character of the communities in the outer-boroughs, all while impoverishing civic and cultural life.

New market entrants like Uber and Lyft are akin to chain stores or big-box retailers. History has proven that while competition is healthy, consolidation of power on the part of the new “big box store” can only be successful in the long run because it is at the expense of existing small businesses. Unless something is done, this type of consolidation will, in the long run, reduce competition, harm consumers and destroy the locally based business.

These “new market entrants” came to New York City with the promise of forward thinking technological development that will alter the transportation industry for the better. If history is any indication, nothing could be further from the truth. Chicago’s struggling West Side learned the hard way when Wal-mart came in and destroyed more jobs than they created. While they promised to bring jobs to the cash-strapped community, within two years of Wal-mart's opening its doors, 82 local stores went out of business. Instead of growing Chicago's retail economy, Wal-mart simply overtook it - absorbing sales from other city stores, and shuttering dozens of them in the process. Chicago's cautionary tale isn't isolated. Countless livery bases in New York City (traditionally known as community car services) are being forced out. If we lose too many of these small community based business, then the character of the City will die as well.

For minorities and women business owners in particular, New York City is an incubator for the American Dream. While many car services are community based and are owned by minorities, that fact could easily change. Every day I talk to livery base owners who are struggling to stay afloat. They tell me they're getting squeezed. The small local livery bases that currently exist are now in a battle that they cannot win. If they don’t match the “new entrants” prices and services, they lose customers. If they do match the “new entrants” prices, they will lose money on every sale. While Uber can afford to operate at a loss indefinitely, it’s only a matter of time before local livery bases will be forced to close. And as history has proven, once the “big box retailer” has eliminated the local competition, prices tend to rise.

Home-grown entrepreneurs and small mom-and-pop businesses, such as car services, have proven their commitment to our neighborhoods time and time again. Instead of falling for the “big-box swindle” we must stand by and help support the local community base liveries. Trading locally owned livery businesses for the likes of Uber and Lyft also entails the loss of significant secondary economic benefits. Local livery bases keep profits circulating within the local economy. They also support a variety of other local businesses. They create opportunities for service providers, like accountants. They do business with the community bank. They purchase goods from local stores. In this way, a dollar spent at a locally owned businesses sends a ripple of economic benefits through the community.

Small livery bases also create economic diversity and stability. Because they are locally owned, these bases are firmly rooted in the community. They are unlikely to move and will do their best to weather economic hard times. They created a service for their community, especially when it was unpopular and dangerous to do so. They contribute to the identity of the community and give neighborhoods their distinct flavor. Locally owned livery bases have also strengthen the community through their contributions to civic and cultural life. Local business leaders are more than providers of goods and services. They often take a leadership role in community affairs. Because they live in the places where they do business, local merchants tend to be far more committed to the community’s well-being and long-term stability than multi-billion dollar corporations.

In the long run, Uber and Lyft will prove to be fair-weather friends. They operate for profit only and have no community-based interest. Our communities and neighborhoods deserve better. The actions of policymakers, and, in particular, government regulators, are critical to ensuring that community based car services continue to be a vital part of our communities. Many contend that public policy should have no role in shaping the economy. This is, after all, a free market. But public policy is never neutral, and has, in fact, played a major role in the explosive expansion of Uber and Lyft. In many ways, public policy has undermined local livery bases by giving Uber and Lyft unfair advantages.

Contrary to conventional wisdom, the decline of community car service is not inevitable, nor is it simply the result of free market forces. Rather, public policy and government regulation has played a major role. Most livery bases are small mom and pop business that have traditionally operated on slim profit margins. New York City’s higher taxes, fines, fees, overlapping regulations, and licensing requirements are particularly tough problems for small livery bases. These issues frequently require big investments in time, as well as money, to sort out; none of which these businesses have. And despite the anger that many small firms feel toward the DeBlasio administration, no political champion is currently waiting in the wings. Small livery bases, and other small community based businesses, with narrow profit margins have come to view Mayor DeBlasio as unsympathetic to their plight.

Under these circumstances, even the most competitive, efficient, and popular livery bases are struggling to stay afloat. If the current trends continue, community based car services might soon be a thing of the past. It is time to recognize that unless the small local livery bases are given a break or someone stands up to help them continue to thrive, competition will be reduced, the character and economy of each community will suffer and this will send a ripple effect that will not be able to be reversed.

New Jersey Will Not Allow Uber to Self-Regulate

A bill has been introduced in the New Jersey legislature to regulate “ride-sharing” services, such as Uber and Lyft, in the same manner as other car and limousine services by requiring driver background checks, insurance and vehicle inspections. All other car and limousine services ask for is a fair playing field.

Representatives from Uber and Lyft said the bill imposes onerous requirements upon them. Uber and Lyft tout their service as one where people use a smart phone application to connect riders with a ride and are usually provided by a private driver using their personal vehicle. Taxi drivers and other car and limousine services have complained that they (ie Uber and Lyft) don't pay the same fees for licensing and that the public is at risk because they're not subject to the same regulations.

Representatives of Uber and Lyft said legal proposals to require them to carry more insurance than taxis and other car and limousine services would make it impossible to do business in the state. Representatives of Uber and Lyft, which are known as Transportation Network Companies, claim they shouldn't be covered by the same regulations as taxi and limo companies because those vehicles are only driven for commercial purposes.

Insurance seems to be the biggest point on difference between the lawmakers and ride sharing companies. Several lawmakers said ride share drivers use their personal auto insurance policies while on the job, which wouldn't cover commercial use of their vehicles. Car and limousine services in New Jersey want things to be equal because they pay insurance for the whole day, pay for drivers to get fingerprinted, pay taxes, get background checks, pay the city for licenses and medallions.

Lyft claims to be more like a ride share or car pool because the drivers take their regular route and offer a seat to someone who would be driving. While a Lyft driver may not be looking to make a majority of their income as a driver that should not matter. While these people may or may not be driving part time, they are clearly not people who are simply driving to work and offering someone a seat.

Lawmakers in New Jersey are questioning the practice of charging higher prices at time of higher demand. While “surge pricing” may encourage more drivers to offer rides, it is inherently unfair to the consumer. Overall, this is about public safety. The state cannot to allow non-professional drivers, who have not been properly been vetted, to be transporting consumers. From a law enforcement perspective, having Uber and Lyft performing their own background checks are worthless. It is akin to risking that a company will simply perform a Google search before permitting a driver to operate. One thing is clear and that premise is that self-regulation is a recipe for disaster.

Will Uber Become Orwell’s Big Brother?

I have spent the vast majority of my career being directly involved in the legal and operational aspects of the for-hire vehicle industry in New York City. The below is a summary of my current thoughts and predictions of what will happen in the future. Most people think that driverless vehicles are something that will be created, but an invention that we will not see during our lifetimes. Others believe that it will be an impossible feat. I believe in technology and have seen how technology has not only transformed certain major industries, but has revolutionized the world. But, while technology is a great thing, it can also cause drastic unintended consequences that may or may not be disastrous to our society.

I can go on and on about different examples of how technology has transformed the world, but my favorites are: who would've thought 30 years ago that people would pay to watch television? Who would've thought 15 years ago that people would be standing in long lines to pay $5.00 dollars for a cup of coffee? Who would've thought 10 years ago that kids would be taking small cell phones with them to school? Who would've thought 8 years ago that a device called the iPhone would in actuality not only be a minicomputer, but would become the primary means by which people communicate with each other? When Steve Jobs cofounded Apple in 1976, I doubt he would have believed that one day his company would become the most valuable company on earth.  

So based upon historical facts, is it so far-fetched to believe that the transition to driverless vehicles will come over the next few decades? While there are huge hurdles before there can be widespread adoption, I believe the sweeping change they bring will eclipse every other innovation our society has ever experienced.

They will cause unprecedented job loss and a fundamental restructuring of our economy, solve large portions of our environmental problems, prevent tens of thousands of deaths per year, save millions of hours with increased productivity, and create entire new industries that we cannot even imagine from our current vantage point. The transition is already beginning to happen. Tesla Motor believes that their 2015 models will be able to self-drive 90 percent of the time. We already know that certain models of higher-end vehicles already feature technology that takes control of steering, acceleration and braking at highway speeds of 70 miles per hour or in stop-and-go congested traffic. So is it so far-fetched to believe that driverless vehicles will be available to the public by 2020?

Next to a house, an automobile is the second most expensive asset that most people will ever buy. Accordingly, it is no surprise that companies like Uber and Zipcar are quickly gaining popularity as an alternative to car ownership. It is now more economical to use a car service if you live in a city than to own a vehicle. The impact on private car ownership will be enormous: The car purchasers of the future will not be the consumer – cars will be purchased and operated by the so-called “ride sharing” and car sharing companies.

It should be no surprise that, in my opinion, unless there is a drastic shift in the earth, Uber will eventually replace all of its drivers with self-driving cars. Consider this- why does Uber have a valuation of over $40 billion dollars? Currently, Uber drivers take home at least 75% of every fare. What will happen when Uber eventually replaces all of its drivers with self-driving cars?

The once coveted New York City taxi medallion, which used to fetch upwards of over $1,000,000.00, has drastically dropped in value since the onslaught of Uber. Additionally, Uber not only has more vehicles on the road than taxis in New York City, but more people are using this service because let's face it: who wants to take a ride in the taxi when, for approximately the same amount of money, you can take a ride in a “black car” or car service vehicle. There are approximately 171,000 taxis in the United States. If Uber were to purchase a driverless vehicle at the cost of $25,000 per car, the rollout would cost a mere $4.3 billion. This would be a drop in the bucket for a company that taken the transportation industry around the world by storm over the course three years. It took many car services in New York City decades to build brand names, reliable services and loyal customers. Uber came out of nowhere, took the transportation world by storm and has been rolling over everyone and everything that has attempted to get in its way.

The effects of the autonomous car movement will likely be staggering. Some people predict that the number of vehicles on the road will be reduced by 99%, estimating that the fleet of vehicles on the road will fall from 245 million to just 2.4 million. Since disruptive innovation does not take kindly to entrenched competitors – like Blockbuster, Barnes and Noble, Polaroid, and dozens more like them, it is unlikely that major automakers like General Motors, Ford, and Toyota will survive the leap. They are geared to produce millions of cars in dozens of different varieties to cater to individual taste and have far too much overhead to sustain such a dramatic decrease in sales. My prediction is that most automakers will be bankrupt by 2030, while startup automakers like Tesla will thrive on a smaller number of fleet sales to operators like Uber by offering standardized models with fewer options.

Ancillary industries such as the $198 billion automobile insurance market, $98 billion automotive finance market, $100 billion parking industry, and the $300 billion automotive aftermarket will collapse as demand for their services evaporates. We will see the obsolescence of rental car companies, public transportation systems, and, good riddance to the ever hated parking and speeding tickets. But we will see the transformation of far more than just consumer transportation: self-driving semis, buses, earth movers, and delivery trucks will obviate the need for professional drivers and the support industries that surround them.

The Bureau of Labor Statistics lists that 884,000 people are employed in motor vehicles and parts manufacturing, and an additional 3.02 million in the dealer and maintenance network. Truck, bus, delivery, and taxi drivers account for nearly 6 million professional driving jobs. Virtually all of these 10 million jobs will be eliminated within 10-15 years, and this list is by no means exhaustive. Others believe that despite the job loss and wholesale destruction of industries, eliminating the needs for car ownership will yield over $1 trillion in additional disposable income – and that is going to usher in an era of unprecedented efficiency, innovation, and job creation.

Is it really possible that a 90% reduction in vehicle crashes would save nearly 30,000 lives and prevent 2.12 million injuries annually. Driverless cars do not need to park – vehicles cruising the street looking for parking spots account for an astounding 30% of city traffic, not to mention that eliminating curbside parking adds two extra lanes of capacity to many city streets. Traffic will become nonexistent, saving each US commuter 38 hours every year – nearly a full work week. As parking lots and garages, car dealerships, and bus stations become obsolete, tens of millions of square feet of available prime real estate will spur explosive metropolitan development. The environmental impact of autonomous cars has the potential to reverse the trend of global warming and drastically reduce our dependence on fossil fuels. Passenger cars, SUVs, pickup trucks, and minivans account for 17.6% of greenhouse gas emissions– a 90% reduction of vehicles in operation would reduce our overall emissions by 15.9%. As most autonomous cars are likely to be electric, we would virtually eliminate the 134 billion of gasoline used each year in the US alone. And while recycling 242 million vehicles will certainly require substantial resources, the surplus of raw materials will decrease the need for mining.

Uber is certainly plotting its future without drivers as they have reached a strategic partnership with Carnegie Mellon University to create an “Advanced Technology Center.” The center is slated to perform research and development in the areas of mapping, vehicle safety, and autonomy technology.

So let's take a look at New York City alone. Inside of 3 years Uber has more vehicles on the road that available taxi medallions. Uber has created a name that is synonymous with car service and transportation.  The value of taxi medallions has dropped drastically. The entities the loan money to the holders of the taxi medallions are shaking in their boots. Car services that took decades to build legitimate community-based businesses are being displaced. Most of all, New York City elected officials and government regulators have been unable or unwilling to look into the future and consider what the ultimate effect Uber will have on the transportation industry, the economy of the city and the consequences upon the world of allowing Uber to continue their quest unabated.

At one point in the history of our nation, our President referred to the Soviet Union as the "evil empire". In recent history, Google has been referred to as an evil empire. Not an empire of territory, as was Rome or the Soviet Union, but an empire controlling our access to data and our data itself. Antitrust lawsuits proliferating around the company demonstrate Google’s quest for monopoly control over information in the information age. Its search engine has become indispensable for most of us, and we now allow Google to determine what is important, relevant, and true on the Web and in the world. We trust and believe that Google acts in our best interest. But we have surrendered control over the values, methods, and processes that make sense of our information ecosystem. And that's just the search engine.

So now back to Uber. We know that Uber collects data on its drivers and its customers, we know that Uber keeps track of the data of each in every trip its drivers perform and most of all, Uber seems to be developing a master plan for logistics. Logistics is the management of the flow of goods between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, animals, equipment and liquids, as well as abstract items, such as time, information, particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated computer software.

In a nutshell, it appears that Uber is collecting data for a still yet to be determined purpose. People using their service are providing Uber with this information, which at one point a near future, may or may not be in the best interest of the consumer or the public in general. So just as Google’s search engine has become indispensable for most of us, will the information and data obtained by Uber, via the current services it provides, be used to determine how the world will operate, what industries will be decimated, what means will be available for people to travel, communicate, work and think?

Overall, by the time the world wakes up to Uber’s “grand plans”, will we have surrendered control over the values, methods, and processes that make sense of our world, just how we have surrendered the entire information ecosystem to Google. Currently we trust and believe that Google acts in our best interest. But in light of what Google has accomplished, are we as a society going to be so willing to trust and believe that Uber will act in our best interest in the future?

In my opinion, elected officials, governmental regulators, leaders of all major industries and society in general should take a broader look at what Uber is currently doing, what is likely to do in the future and whether the impact of its effect on the world is something that we are willing to blindly accept today, all while taking the risk that Uber will not cause just a major disruptions to the world as we know it, but take the risk that it will not become a true “evil empire”, by using all of its knowledge, data, software and logistics sophistication, and of course the huge amount of money that will make over the coming years, to create a world that we either do not want to or are not prepared to live in.

Whether Uber will ultimately control the world is yet to be seen. But remember where this article started: there was a point in history were no one could've imagined travelling in an automobile instead of riding a horse, traveling across country in an airplane rather than a steam locomotive or using email to communicate with another rather than using the pony express. The tyranny that is epitomized in the book “1984”, involved George Orwell’s view that one day Big Brother would enjoy power entirely for its own sake, not interested in the good of others, but interested solely in power. Will Uber become the Orwellian “Big Brother”?

A Distinction Without A Difference? Uber Is Just A Car Service By Some Other Name

You have probably heard of Uber, the app that lets you pre-arrange transportation from your smartphone. You may also have heard of its competitors Lyft and Sidecar.  Uber, Lyft and Sidecar have described their services as "ride-sharing." They claim they are not a taxi company, or even a car service. Instead, they claim to provide "marketplaces" where drivers can offer their services and users can get a ride. Lyft even goes so far as to describe their users, on both ends, as a "community." It's "your friend with a car," according to the website - not a driver you are hiring.

 There is an obvious tension in New York City, and around the country, between our traditional idea of a car service and the model that Uber, Lyft, and Sidecar provide. This is at the heart of the debate over government oversight and fairness to traditional car services, who are heavily regulated in New York City. The California Public Utilities Commission (CPUC) was the first to categorize Uber, Lyft, and Sidecar as an entirely new category of transportation services: transportation network companies, or TNCs.

 The issue of what exactly a transportation network company is has plagued Uber and its competitors across over the country and around the world. So far, some city governments have embraced Uber and Lyft like they are the best thing since sliced bread, while other officials have been unimpressed by the companies' insistence that they are not providing transportation, and therefore get to skirt around regulations that are in place for the safety of the riding public.

 Uber, Lyft, and Sidecar would rather have you think of them as technology company. As Uber wrote in a legal filing with the CPUC: 

Uber operates no vehicles, and does not hold itself out or advertise itself as a transportation service provider. In fact and law, Uber does not provide transportation services of any kind and does not own, lease or charter any vehicles for the transportation of passengers. On the contrary, Uber is a technology company that licenses the Uber App to transportation service providers. The transportation service providers pay a fee to Uber to use its software technology; the passenger of the transportation service provider pays the transportation service provider for transportation services received.

 Current car service owners in New York City, who have been in the industry for dozens of years have retorted that Uber’s claim to be a technology company is a farce. This is so because Uber sets the rates for both the passengers and the drivers. They collect the money and pay the driver. They hire the drivers. They blackball undesirable passengers. They tell their drivers where the best places to pick up are and, if the drivers don't pick up a high enough percentage of the fares, Uber fires them. But Uber isn't in the transportation business. Right!

 Some believe that government agencies and regulators who agree with Uber’s take that they are a technology company are likely to be in the pockets of politicians who make the laws and government regulators who have resisted the calls of the traditional car services to subject Uber to the same regulations as any other car service.

 While Uber disclaims that it is a “transportation company,” Uber has previously referred to itself as an “On-Demand Car Service,” and goes by the tagline “Everyone’s Private Driver.” Indeed, in commenting on Uber’s planned expansion into overseas markets, its CEO wrote on Uber’s official blog: “We are ‘Everyone’s Private Driver.’ We are Uber and we’re rolling out a transportation system in a city near you.” Other Uber documents state that “Uber provides the best transportation service in San Francisco . . . .” Moreover, Uber does not sell its software in the manner of a typical distributor. Rather, Uber is deeply involved in marketing its transportation services, qualifying and selecting drivers, regulating and monitoring their performance, disciplining (or terminating) those who fail to meet standards, and setting prices.

The central premise of this argument is Uber’s contention that it is not a “transportation company,” but instead is a pure “technology company” that merely generates “leads” for its transportation providers through its software. Using this semantic framing, Uber argues that its customers buy dispatches that may or may not result in actual rides. In fact, Uber notes that its terms of service with riders specifically state that Uber is under no obligation to actually provide riders with rides at all. Thus, Uber passes itself off as merely a technological intermediary between potential riders and potential drivers. This argument is fatally flawed in numerous respects.

First, Uber’s self-definition as a mere “technology company” focuses exclusively on the mechanics of its platform (i.e., the use of internet enabled smartphones and software applications) rather than on the substance of what Uber actually does (i.e., enable customers to book and receive rides). This is an unduly narrow frame. Uber engineered a software method to connect drivers with passengers, but this is merely one instrumentality used in the context of its larger business. Uber does not simply sell software; it sells rides.

A United States District Judge in the Northern District of California recently said in a court decision that”

“Uber is no more a “technology company” than a Yellow Cab is a “technology company” because it uses CB radios to dispatch taxi cabs, John Deere is a “technology company” because it uses computers and robots to manufacture lawn mowers, or Domino Sugar is a “technology company” because it uses modern irrigation techniques to grow its sugar cane. Indeed, very few (if any) firms are not technology companies if one focuses solely on how they create or distribute their products. If, however, the focus is on the substance of what the firm actually does (e.g., sells cab rides, lawn mowers, or sugar), it is clear that Uber is most certainly  a transportation company, albeit a technologically sophisticated one.”

TNC’s have been operating in many states by thumbing its nose in the air and laughing at government regulators. These TNC’s are taking advantage of loopholes in local laws to sidestep regulations that protect the public, drivers and others.  Although they purport to provide “ridesharing” services or be the provider of a “marketplace”, the business model of TNC’s is in direct violation of any traditional understanding of ridesharing and the means by which transportation is provided and regulated, especially in the City of New York. 

 In New York City, some people still use a telephone to call a car service for pre-arranged transportation, while others use smartphone app created by the TNC. Some car services in New York City actually have their own smartphone application, just like the TNCs, that allows the customer to pre-arrange transportation. But in New York City, the traditional car service that has its own smartphone application is subjected to a whole set of arcane rules and regulations, while the TNC’s are not. This is truly a distinction without a difference.

 The laws that apply to car services and their drivers require measures to safeguard the safety of the public who uses such services. Our elected officials must provide a public policy rationale that justifies having two sets of standards. One for car services and one for for TNCs. Politicians like to support TNC’s because the reference to innovation is sexy and these TNC’s are heavily funded and are able to pay for access to elected officials who make the laws. They also have access to high powered and costly lawyers who can go into court to defend their claims of being the creator of a “marketplace”, rather than what they actually are, which is just another provider of transportation, albeit a technologically savvy one. A passenger’s safety in one vehicle should not be any less valuable based on arbitrary differences.

 At the end of the day, the fundamental acts of either a TNC or a car service are essentially the same – a passenger entering a vehicle, either pre-arranged or hailed by a smartphone app, and then being transported from point A to point B.  There are no other differences between traditional car service and the new TNCs. The only difference is the manner in which transportation is arranged. Either the TNC’s must be subjected to the same regulation as the other car services in New York City or the traditional car services must be freed of the vice grip that the NYC Taxi and Limousine Commission has placed on them over the years and continues to do so despite their insistence that TNC’s should be treated differently.         To do otherwise would not only be unfair and irrational, but would jeopardize the safety of the riding public. 

FMLA-CHALLENGES TO MEDICAL CERTIFICATION

One basis for requesting leave under the Family and Medical Leave Act (FMLA) is the employee’s own “serious health condition” that renders them unable to perform the functions of the job.  When requesting leave under the Family and Medical Leave Act due to a “serious health condition”, the employee must tender to the employer a medical certification of the condition.

Some employers have found abuse of this procedure by employees, especially through the use of primary care physicians.  If the employer has “reason to doubt the validity of a medical certification”, the employer can request that the employee obtain a second medical opinion, at employer expense.  The employer can choose the health care provider rendering the second opinion, but can not regularly contract with, or use the services of that health care provider. 

The employer may not contact the employee’s health care provider, but the employer’s retained provider chosen to render the second opinion may make contact for limited purposes.  

If the second opinion conflicts with the opinion of the employee’s health care provider, a third provider jointly selected by the employer and employee will render an opinion that is final and binding.  The employer is responsible for the employee’s costs of the third opinion (travel, etc.).  While the above review is on-going, the employee shall have provisional FMLA leave.

If an employer decides not to challenge the medical opinion, or the result of the above procedure is confirmation of a serious medical condition supporting the basis for FMLA leave, an employer can request re-certification no more often than every thirty (30) days unless there is a significant change in circumstances, or the employer receives information to cast doubt on the certification.