Uber launches in Iowa City

IOWA CITY - Uber wasted no time launching in Iowa City, the ride-hailing giant's fifth Iowa community so far.

Uber officials on Thursday - the same day Iowa City's transportation network company (TNC) ordinance took effect - announced the launch of the smartphone app UberX, answering the more than one-year-long question on whether or not Uber would be coming to Iowa City.

'We are excited to launch UberX in Iowa City and bring this additional transportation option,” Sagar Shah, General Manager of Uber Iowa, said in a Thursday news release. 'UberX will offer individuals the power to get around Iowa City at the touch of a button and provide an opportunity for many to earn income on their own schedule.”

Uber now operates in five Iowa cities, having launched in Cedar Rapids and Des Moines in 2014 and last year in Ames and the Quad Cities.

Uber officials did not provide specific numbers for drivers and riders in Iowa, but claim to have thousands of drivers who have served more than 100,000 Iowans since beginning operations in the state.

Fifty percent of U.S. Uber employees drive, on average, less than 10 hours per week, with 61 percent of drivers maintaining full-time or part-time jobs outside of Uber, according to Uber data.

While Uber's expansion into Iowa City means for more drivers and riders, a bill heading to Gov. Terry Branstad's desk could supersede the Iowa City ordinance and create statewide regulations for companies seeking to appease a growing population of app-savvy riders.

'The statewide TNC bill largely mirrors the ordinance that the city council passed last week, it's virtually the same regulatory framework,” said Simon Andrew, Iowa City assistant to the city manager.

The bill would require TNCs to obtain state authorization in order to operate and perform background checks on all drivers.

Uber spokesman Leor Reef said a statewide approach makes it easier for ride-hailing companies and drivers to expand into additional communities.

'It kind of eliminates that patchwork. It makes it easier for the business to really grow and provides flexibility for drivers to operate around the state,” Reef said. 'Having that standard of requirement, it creates a continuity and simplicity for everyone.”

Currently in Iowa, taxi and ride-hailing service drivers must possess the lowest category of the state's three-tier Class D chauffeur license, which is required for vehicles that carry less than 16 passengers.

Mark Lowe, director of the Iowa Department of Transportation's motor vehicle division, said the chauffeur license is sort of the 'odd duck” license, in that it falls somewhere between standard non-commercial and commercial licenses.

To get a chauffeur license, one must have a valid non-commercial license, with a clean driving record, for at least two years. An applicant with a tarnished record must take a driving test. Licenses are renewed annually.

'There's really a low level of scrutiny to get that license,” Lowe said.

Iowa issued 16,269 D-3 chauffeur licenses last year - a number comparable to the 16,385 licenses issued in 2013, before Uber arrived in Iowa.

Driver's license stations in Ames, Cedar Rapids, Davenport and Des Moines - communities where Uber operates - have seen little to no increase in issued chauffeur licenses over the last three years, according to data provided by the Iowa DOT.

However, Iowa's chauffeur license requirement might soon be a thing of the past for taxi and ride-hailing service drivers.

The state bill heading to Branstad's desk would create new requirements for such businesses and eliminate the need for the chauffeur license.

The bill was originally deemed 'unworkable” by Uber representatives, who threatened to leave Iowa altogether, because it originally required collision and comprehensive insurance for all drivers.

The new bill requires drivers to notify their lien holder that they're using their vehicle for TNC services.

Sen. Tod Bowman, D-Maquoketa, who shepherded the bill and chairs the Senate transportation committee, said the bill would overrule most requirements in Iowa City's ordinance and create consistency for the state.

'If (Branstad) does sign it, most of what Iowa City would do would be null and void,” Bowman said. 'Instead of having 800 different pieces of legislation, city-by-city, we would have a statewide policy.”

Branstad said Monday he had not yet read the bill, but leaned toward supporting it.

'I haven't had a chance to review it yet, but I'm very familiar with Uber and it's really made a big difference I think and so I guess I'd be favorably inclined. But I want to review judgment until I see exactly what it does,” Branstad said.

If signed, the bill - which hadn't reached the Governor's desk as of Thursday - would take effect Jan. 1.