Uber uses threats, political pressure to thwart regs

AS LAWMAKERS CONTINUE to work on legislation to regulate the emerging ride-hailing industry in Massachusetts, the biggest sticking point appears to be mandating fingerprints for drivers, a move that has triggered threats by transportation network companies such as Uber to pull up stakes in places where such a policy has been instituted.

While no Uber official or anyone from its smaller competitor, Lyft, is willing to say on the record that Massachusetts could be the next Uber-less or Lyft-free service area, legislators say there have been sufficient hints that what happened in other regions could happen here.

“We’ve certainly looked at some of the political tactics Uber has taken in other parts of the country,” says state Rep. Aaron Michlewitz, House chairman of the Joint Committee on Financial Services, which is trying to fashion an omnibus bill out of several that are in the committee. “We are not creating a piece of legislation for one particular company. Our goal is to create legislation that will lay the groundwork for potential future start-ups. Fingerprinting is something we are giving full consideration to.”

The issue has become a stumbling block in Massachusetts as chiefs of police and prosecutors around the state have come out in favor of requiring ride-hailing drivers to be fingerprinted as part of background checks. Uber officials have said that fingerprinting could hamper the company’s recruitment of drivers. Uber, which spent more than $300,000 in lobbying fees in Massachusetts last year, has said a fingerprinting requirement is discriminatory because minorities have disproportionately more interactions with police and if someone is arrested, even if they aren’t ultimately convicted, a background check will show that using fingerprint identification.

Uber’s actions and threats in other parts of the country shows a willingness to put as much pressure on local officials as possible to get them to back away. But some of those threats appear to be hollow because some jurisdictions, including Houston and New York City, have passed regulations mandating fingerprints for drivers and Uber has remained because of the size of those markets. Boston has been cited by company officials as having the deepest penetration of riders and coverage per capita of any of Uber’s service areas, meaning any retreat from Boston would represent a big financial hit.

But Uber has used its popularity as a threat in other regions, pulling out after the passage of mandatory fingerprinting only to return when the regulations are repealed or modified. The company shut down its app service in Kansas last year after the legislature overrode a veto by Gov. Sam Brownback and kept fingerprinting in a new law regulating ride-hailing services. Lawmakers relented and made fingerprinting optional following a deluge of calls and letters from riders at the company’s urging, and Uber returned.

Last year, officials in Florida’s Broward County passed a regulation requiring fingerprints, similar to what’s required of cab and livery drivers. Uber pulled out in protest, but returned in the fall when the county commissioners reversed themselves after a flood of protests from Uber users.

Uber “organized and mobilized, through social media, the community so that we received hundreds and thousands of emails,” says Broward Commissioner Lois Wexler, one of only three members of the nine-member board who voted to retain fingerprinting. “When they see a crack in the armor, and they did here, they took full advantage of it and mounted an aggressive attack and the commission responded to it.”

She said reversing the vote “absolutely sets a precedent” for other businesses to pressure the board when they don’t like a regulation and the board will be forced to capitulate. Wexler said her concern was with safety and she says she was immune to the pressure.

“This is my 24^th year in office and my last year in office,” she says. “It never concerned me in doing the right thing.”

In neighboring Palm Beach County, county commissioners were considering a similar ban but saw what happened in Broward and decided against any action, instead unsuccessfully urging the state legislature to take up the issue to have uniform regulations across Florida. But it was the threat of losing the service that caused commissioners to back off.

“That was definitely a given that if we did anything, they indicated ‘we would not be operating,’” says Palm Beach County Commissioner Shelley Vana. “I don’t remember how it was said but we knew it. That’s their business model. This is a policy debate and it’s not something to get emotional about.”

Vana, who spearheaded the move to get fingerprint checks for taxi drivers in her county, says she still firmly believes Uber drivers should undergo similar background checks, but without statewide support, doesn’t see it happening.

“For me, I still think we need Level 2 background checks, which means fingerprints,” says Vana. “It’s so new, it’s so fabulously popular, I think it’s going to be difficult to do it,” she says of Uber. “I think for some the threat of pulling out was an issue, but it wasn’t for me. We’re elected to do good public policy. In other places they didn’t pull out.”

Texas is an example of the spotty follow-through on the company’s threats. While Uber did not pull out of Houston after fingerprints became mandatory, the company did cease operations in San Antonio. A similar ordinance in Austin was set to begin this past Monday, but officials delayed it until the end of the month to try to find a solution, including instituting a voluntary program that would reward drivers who undergo fingerprinting and give them a badge to display for riders.

But Uber officials even opposed that, despite the fact the program would be operated by the city and Uber drivers are not considered employees of the company. Uber gathered more than enough signatures for a ballot initiative to repeal the regulations. What’s more, Uber fans launched a recall effort of City Council Member Ann Kitchen because of her support for mandatory fingerprinting. The recall effort is the first ever to remove a council member for anything other than malfeasance.

Mayor Steve Adler is trying to find a compromise between retaining the transportation apps, which have helped the city reduce its drunken driving rates, and coming up with a compromise that will ensure the city’s young riders know who they are getting in the car with.

“I think we’re innovating a little too fast for Uber,” says Adler, according to a statement emailed by his aides. “In a fast-paced world, it can be hard to keep up. In our search for a solution to keep Uber and Lyft in Austin while meeting our responsibilities for safety, we’re the ones innovating and adapting. Uber is demanding strict adherence to their status quo.”

Uber officials in Boston declined to discuss the company’s potential for pulling out if a fingerprint mandate passes, but point to repeated statements by company officials as to why they believe it is unnecessary and onerous.

Local law enforcement officials say Uber’s claim that the company’s background checks are sufficient doesn’t hold true. They say running someone’s name does not confirm their identity, nor will it uncover arrests from outside the state without access to the FBI fingerprint database.

“Explain to me what they’re complaining about,” says Berkshire District Attorney David Capeless, president of the Massachusetts Association of District Attorneys, who have written a letter to the Legislature urging it to adopt mandatory fingerprinting. “How can they say their background checks are sufficient if they cannot even verify exactly who it is in applying?”

Capeless says his son and his friends use Uber, which gives him a personal stake in ensuring safety. He questions Uber’s threats about pulling out from any jurisdiction that mandates fingerprints.

“If they were to say that, then I would give pause about the company and their concern about the public,” says Capeless. “I heard just the other day of a study done of business travelers — that they are now using these types of services more than either taxis or rental cars. It’s not just some insignificant segment of the transportation economy. No, it’s growing and it’s probably going to grow even further. We certainly don’t want to stifle innovation economy, but this is a reasonable precaution. I’m surprised about their reaction to this.”

Norwood Police Chief William Brooks, head of the Massachusetts Chiefs of Police Association, says his group wants to make sure getting in the car carries the same level of security that sending your child off to school has. He said the threats of withdrawing from the state are troublesome.

“I think it would be a shame if that happened,” he says.  “I wouldn’t want to see that happen. My kids use Uber. I wouldn’t want to see that go away. But volunteers in schools and people who work in schools have to be fingerprinted. I really think it’s important. We need to make sure the industry is clear of criminals who put people at risk.”

Part of Uber’s complaint in Massachusetts is their drivers are being asked to submit to regulations that taxi drivers are still not subject to. While the state has authorized cities and towns to fingerprint taxi and livery drivers, none have yet started, though many say they intend to, especially if fingerprinting for private drivers for transportation network companies passes.

But Brooks admitted he hasn’t begun fingerprinting cab drivers in Norwood even though Town Meeting voters passed the ordinance several years ago.

“I intend to do it,” he says. “I haven’t gotten around to it yet.”