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For-Hire Drivers In Kansas City Anxiously Await City's Decision

Matt Hodapp

In 2014, Kansas City, Mo., officials began the process of rewriting its taxi code, citing public safety concerns about ride-hiring companies such as Uber and Lyft, and a conflict concerning fairness in the cab industry. The response to a draft of the proposed changes has been mixed.

City permits

The re-named Vehicle For Hire Code (previously Taxi Code of Ordinances) would require ride-hiring drivers to acquire a city permit by passing a background check, a physical examination and other tests to ensure public safety. The permit fee would also be dropped from $300 to $250.

Andy Hung, the general manager of Uber Kansas City, says the individual licensing process and fees don't fit the ride-hiring business model because many drivers only work a few hours a month.

"For instance, a $250 per vehicle fee would be the highest in the country," says Hung.

Ryan McElwain is exactly the kind of driver Hung is talking about. He has a day job and drives for Uber to make extra money on the side. But McElwain says that Uber has been decreasing prices in order to create demand. 

"I've been driving for six months and it's dropped 35 percent, twice," says McElwain.

The new proposed permit fees could create financial burdens for part-time drivers who already have to pay for car maintenance and gas.


A major issue that critics of Uber and Lyft have raised is the lack of insurance before the driver picks up a rider. Although the new code would require ride-hiring companies to provide commercial coverage during a pickup and ride, it would not require them to provide that coverage when the driver is waiting for a trip. The National Association of Insurance Commissioners has issued a warning about possible gaps in insurance coverage during this time. But Hung says Uber has sufficient coverage.

"If for any reason a driver's personal policy doesn't cover it, the TNC (transportation network company) policy becomes primary," says Hung.

Bill George, the president of Yellow Cab company in Kansas City, says it's important that the city require drivers to carry the commercial insurance even when they're looking for trips.

"You could have somebody that's driving for both Uber and Lyft looking for trips in Westport on a busy Friday night, and strike somebody at a crosswalk. Their personal insurance carrier either Farmers, Geico, or Allstate will deny the claim because it's being used in commercial service. Uber will deny the claim because it wasn't on a trip if the Lyft app was open. Lyft would deny the claim because it wasn't on a Lyft trip if the Uber app was open. As a result there's absolutely no coverage," says George.

Exclusive Contracts

The city's review of the taxi code began last September with a resolution put forward by council member Dick Davis. Although the debate about ride-hiring companies later dominated that conversation, Davis says his original intent was to inspect exclusive contracts between Yellow Cab, the largest taxi company in the city, and a majority of downtown hotels and casinos. These contracts insure that no other cab company can pickup passengers on the property of these establishments without prior notification.

Davis was distraught to find that the proposed Vehicle For Hire code did not include any action on the exclusive contracts. Davis argues that because the independent cab companies are minority and women owned, the city is creating a discriminatory system.

"We've got a playing field that's unbalanced, and made possible because we've given Yellow two thirds of the permits, that to me is discriminatory," says Davis.

Since taxi companies are a regulated industry, the city does have the authority to make the contracts illegal. But City Manager, Troy Schulte, says even if the city were to ban exclusives, it cannot stop hotels from using a preferred company.

The Transportation and Infrastructure committee will meet again in March to consider the proposed ordinance revisions.

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