Ride-sharing companies fight New Mexico regulators

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE, N.M. — It’s called ride-sharing, a way to catch a ride using 21st century technology, embraced by millenials and free-market advocates as efficient and entrepreneurial, but regulators in New Mexico aren’t jumping on board.

On Wednesday, the state Public Regulation Commission voted 3-2 to deny a request from a company connected to one of the largest ride-sharing outfits in the nation, Uber, for a certificate to provide “specialized passenger service.”

The move comes a little more than a month after the PRC issued a cease and desist order against Lyft, which is trying to establish a presence in the Albuquerque market.

The fight centers on whether companies like Uber and Lyft essentially offer the same services as taxis or vans. The ride-sharing companies say they’re fundamentally different, but a majority of the commissioners insist they should be regulated under the Motor Carrier Act.

“We’re not exactly a taxi service,” said Paul Melendres, an attorney for a company named Hinter-NM for its UberX program, to PRC commissioners. “We don’t own the vehicles. (Customers) don’t stand in a taxi line, you don’t hail us.”

But commissioners Ben Hall, Valerie Espinoza and Theresa Becenti-Aguilar were unmoved and denied the certificate.

“Quit skirting the law,” Espinoza told Melendres.

Ride-sharing works by allowing customers to download a free smartphone app, which they use to request a ride.

The app connects them to the nearest available driver and tracks the length of the trip in distance and time, calculates the cost and automatically transfers the fee from the user’s credit card (already entered into the app at the beginning of the process) to the driver’s account. No cash changes hands.

Lyft spokeswoman Katie Dally said Lyft drivers work their own schedules and use their own personal vehicles, are properly vetted, licensed and insured.

“Trying to regulate a ride-sharing service like Lyft as if it were a taxi service is trying to put a square peg into a round hole,” said Dally in a telephone interview from San Francisco.

Ride-sharing fans accuse cab companies in cities such as Los Angeles and San Francisco as trying to wield influence to snuff out competition. Earlier this month, the Department of Motor Vehicles department in Virginia fined Uber and Lyft for not having “proper operating authority” to do business in the state.

“Regulations are meant to protect consumers, not create a mythical ‘level playing field,’ “said Paul Gessing, president of the Rio Grande Foundation, a free-market think tank based in Albuquerque. “If taxis aren’t competitive with Lyft and Uber, then the obvious thing to do is reform regulations to help them compete, not to force Lyft and Uber to adhere to onerous regulations.”

For now, the majority of New Mexico’s regulation commission disagrees.

“As a commissioner, I welcome anybody who wants to come in and compete against somebody else as long as they’re doing it legal,” Hall told New Mexico Watchdog after Wednesday’s meeting. “If they don’t want to do it legal, then they’re not welcome here as far as I’m concerned.”

Commissioner Pat Lyons, joined by Karen Montoya, voted the other way.

“I wouldn’t mind giving them a temporary service, a temporary solution,” Lyons said. “The people seem to want this. It’s a new, innovative system.”

The issue isn’t over, though. PRC staff is looking into adjusting its rules to accommodate ride-sharing companies, but it’s also considering stricter enforcement measures against Lyft and Uber.

Lyons said ultimately the state Legislature needs to hammer out a statute for ride-sharing companies. “Competition is good,” Lyons said. “Let’s create jobs.”

Contact Rob Nikolewski at rnikolewski@watchdog.org and follow him on Twitter @robnikolewski