Defying regulators, ride-sharing companies still operating in NM

By Rob Nikolewski │ New Mexico Watchdog

SANTA FE, N.M. — Two ride-sharing companies have run into a brick wall with the state’s Public Regulation Commission, but that doesn’t mean customers in Albuquerque can’t catch a ride over the Fourth of July weekend with Lyft or Uber.

Both companies are still operating in the state’s largest city, even though the PRC denied Uber a temporary “specialized passenger service” certificate last week and the commission issued a cease-and-desist order against Lyft last month.

“We’ve reviewed the state transportation codes and believe we are following the rules,” John Zimmer, a Lyft co-founder, said in a statement after the PRC decision. “We’ll continue normal operations.”

And the company is doing just that.

Despite problems with the PRC, if customers download a free smartphone app from Lyft they can still request a ride from the company, which is breaking into the Albuquerque market. The only difference is Lyft drivers aren’t charging customers for rides while the PRC dispute continues.

After being denied by the PRC last week, an Uber spokesman said customers can still use its app to catch a ride. The company’s Albuquerque Twitter page and website was still active as of Wednesday.

Ride-sharing apps connect riders to the nearest available driver and track the length of trips 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.

That Uber and Lyft are still operating in Albuquerque runs the risk of irritating commissioners on the PRC, including Valerie Espinoza, who has come out against the companies because she thinks both are essentially taxi services and should be regulated under the state’s Motor Carrier Act.

“It shows me their reluctance to comply with our laws in this state,” Espinoza told New Mexico Watchdog. “If they get it right, someday they might be a legitimate business in my eyes. But for now, it just demonstrates what they’re made of … I’m not saying it would skew me away from making the right decision, but it compromises their position with me.”

The ride-sharing companies insist they are not like taxi or van services because customers don’t hail them like cabs. Plus, the companies say their drivers work their own schedules, operate their own personal vehicles and 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,” Lyft spokeswoman Katie Dally told New Mexico Watchdog last week.

But Espinoza has been a sharp critic of the ride-sharing companies.

“They’re just trying to make a buck on the public,” Espinoza said.

Ride-sharing fans include young people who say it incorporates the best of 21st technology and free-market advocates who say opposition is coming from businesses who want to lock out competition and government officials curbing innovation through regulations.

“I fight for competition at all times,” Espinoza said, “but not competition that won’t abide by the state’s rules.”

The PRC staff is working on adjusting its rules-making to accommodate ride-sharing companies, but there’s no guarantee a compromise can be reached.

Commissioner Pat Lyons, who’s been sympathetic to Uber and Lfyt, thinks state lawmakers may need to pass a law in the 2015 legislative session to resolve the issue.

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