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The Journal Gazette

Wednesday, March 16, 2016 7:33 am

Uber quietly enters under new state law

Jeff Wiehe and Chris Meyers The Journal Gazette

When Gov. Mike Pence signed into law House Bill No. 1278 as voters turned out for primary elections Tuesday, he opened the door for the popular app-driven transportation service Uber to operate within the city.

And he did so unbeknown to several city officials, who were looking over the bill Thursday evening and checking its legality against city ordinances at the same time Uber officially launched its services in Fort Wayne.

"There’s a law that nobody bothered to talk to us about, so we’re going to have to research this," said Rusty York, the city’s public safety director, just before a Board of Public Safety meeting at which three new permits and three renewal permits were issued for taxi drivers – representatives of the long-standing industry that Uber and businesses like it are cutting into.

Uber uses its smartphone app to connect riders with drivers in roughly 200 cities around the world. It has gained popularity among younger generations who use the service in larger cities. And it has been advertising for drivers in Fort Wayne on its website since September.

Rep. Matt Lehman, R-Berne, authored the bill signed by Pence, which Uber touted as allowing "ridesharing to flourish throughout Indiana."

The bill requires that passengers using the service be covered by insurance – either through the company’s plan or through the driver’s own insurance.

Some officials have concerns about companies such as Uber having proper insurance.

Fort Wayne ordinances specify strong regulations when it comes to what’s needed to operate a taxi, who can operate a taxi and what kind of insurance is required.

"The taxicab companies in town are not happy," said Steve Sorgen, a retired Fort Wayne police sergeant who handles taxicab permits and inspections for the city.

In the city, cab companies must carry general liability insurance – most carry $1 million in general liability insurance, Sorgen said – and $100,000 to $300,000 in auto liability insurance. And then there is a $125 fee for permit paperwork upon startup and a $125 fee per vehicle for an inspection, which is required every year.

A recent cab startup in the city paid $1,400 to get the proper insurance coverage, plus the fees for cars in his fleet to be inspected, and more for meters and lights atop his vehicles, Sorgen said.

"You’re looking at close to a $2,000 investment where Uber’s getting by with nothing," he said.

The state bill signed into law does call for passengers of Uber and other ridesharing companies to be covered by a bare minimum $1 million liability insurance plan.

The biggest controversies involving Uber in other cities, though, have centered on the company’s background checks.

While Uber touts that it conducts "rigorous" background checks on drivers – who are considered independent contractors, according to the company’s website – numerous instances of customers accusing drivers of robbery, battery, rape and other crimes have made headlines.

Cab drivers in Fort Wayne must have background checks performed once a year. The bill signed by Pence requires that any drivers for companies such as Uber have background checks performed and driving records maintained.

Uber officials did not return a phone call asking for details on how it conducts background checks, but one spokeswoman wrote in an email that the company "only partners with drivers who have passed the most rigorous background check, which includes county, federal and multi-state checks, National Sex Offender Registry screen, Social Security Trace (lifetime) and historical and ongoing Motor Vehicle Records checks."

However, an investigation last year by Chicago television station WMAQ NBC 5, found that drivers did not know their way around Chicago and that several had many driving violations – including one man with 26 to his name.

The television station also found a woman who had served prison time for convictions ranging from drugs to assault and had been released as recently as 2012 before she applied to be an Uber driver – and succeeded.

In Houston, a man convicted of drug charges and released from federal prison in 2012 became an Uber driver and is now accused of raping a female passenger.

Men in Philadelphia and Boston acting as Uber drivers have been accused of rape. An Uber driver in San Francisco who struck and killed a 6-year-old girl was able to earn money from the company even though he’d been convicted of reckless driving in Florida.

The company has also come under fire for "price surging," or raising fares during times when drivers may be more busy.

An Indianapolis woman who used Uber to travel from Castleton to downtown to watch the Big Ten basketball tournament in December paid $30 for the ride there. Her fare for the same drive back: $450, according to Indianapolis station WISH-TV.

And there are privacy concerns.

A reporter for the Daily Beast wrote last year about her experience with a driver who tracked her down and sent emails to her and her employer after she complained about an uncomfortable moment during her ride.

This happened despite her belief that Uber drivers were not able to see riders’ full names or personal details.

In a post on its website this year, Uber officials wrote that the company reviewed its privacy policies and "fully acknowledge that we haven’t always gotten it right."

"We won’t rest until our Privacy Program is world class and we are confident our roadmap will get us there," the officials wrote.

jeffwiehe@jg.net

cmeyers@jg.net