Cedar Rapids leaders embrace Uber despite ordinance uncertainty

Ride-sharing service debuted in C.R. Thursday

Terry Bergen, mobility manager for Transportation Advisory Group, holds up his phone with the Uber application running in Cedar Rapids on Thursday, December 4, 2014. (Stephen Mally/The Gazette)
Terry Bergen, mobility manager for Transportation Advisory Group, holds up his phone with the Uber application running in Cedar Rapids on Thursday, December 4, 2014. (Stephen Mally/The Gazette)

CEDAR RAPIDS — Uber, the taxi-like service that connects riders to drivers via an app on their mobile phone, began business in Cedar Rapids on Thursday.

The move came even as city officials — who have been meeting with Uber officials for some time — had asked the company to wait until the city adopted a new regulatory ordinance to address the latest thing in transportation services.

However, Mayor Ron Corbett and Jasmine Almoayed, the city’s economic development liaison, said Thursday that the city is enthused by Uber’s arrival and the new transportation business model the company brings with it.

Almoayed said the city considers the San Francisco-based Uber’s willingness to approach Cedar Rapids a recognition that the city “has arrived as a metro area.” Uber currently operates in over 100 U.S. cities, as well as 150 more in 50 other countries.

“Uber’s coming to Cedar Rapids does signify that we are becoming a larger metro, where we do have different types of (customer) demand for different types of people,” Almoayed said. “It’s just another amenity (the city has to offer).”

Uber’s arrival typically prompts a city to modify an ordinance that regulates taxis and limousines. That’s what Des Moines, which has had Uber service since September, and Iowa City, which is expecting it, are doing.

However, Almoayed said Cedar Rapids is creating a new ordinance different from its existing taxi ordinance to address transportation “networks” — which she said is the city’s view of what Uber is — and how it differs from taxis and limousines covered under a current city ordinance.

Corbett and Almoayed both said Uber is not in violation of the city’s current taxi and limousine ordinance because Uber’s service is not a taxi service.

“Cities across the country are updating ordinances to meet the new business model,” Corbett said.

Almoayed said city officials had not yet talked with the seven taxi companies licensed to operate in Cedar Rapids about Uber’s arrival. She said city officials are studying how required city fees for taxis, taxi drivers and inspections of taxis might apply to vehicles and drivers who pick up Uber customers.

Bridget White, owner of Century Cab in Cedar Rapids, said Thursday that she didn’t know much about Uber or if it would cut into her business.

Nazar Osman, co-owner of American Class Cab. Co. in Cedar Rapids, said he was well of Uber. He expected his business to feel some impact because Uber, which doesn’t own vehicles, can charge lower rates.

Osman, though, thought Uber would raise rates once it eliminates some existing business to cover the cost of insurance for drivers and passengers.

He said, too, that Uber won’t be there around the clock like the cab business, because Uber’s list of sometime drivers won’t be there in the cold and ice like the “24/7” cab company.

Pooneet Kant, general manager of regional expansion for Uber, said Thursday that Uber was eager to set up in Cedar Rapids before the upcoming holidays because it had been getting requests from companies and people planning larger holiday parties.

Kant said Uber’s intent is not to close down taxi businesses, but to offer a different option for customers. Uber drivers, for instance, won’t be permitted to pick up customers on the street and won’t be able to line up at airports for customers as taxis do, he said.

Kant said Uber has been operating in one other Iowa city, Des Moines, since September. There, city officials have asked that each driver carry commercial liability insurance, which Kant said isn’t necessary because Uber will provide it.

Simon Andrew, administrative assistant in the Iowa City City Manager’s office, said the City Council had been slated this Tuesday to discuss proposed changes to its taxi ordinance in expectation of Uber’s arrival, but other council debate pushed the discussion to Dec. 16.

Andrew said the ordinance changes are designed to incorporate Uber into the city’s taxi ordinance; the thought is it can be done in a way that is fair for Uber and existing taxi businesses.

The proposed ordinance, he said, adopts Uber’s provision for providing liability insurance for its drivers, and does not require each driver to carry his or her own liability insurance.

Unlike Cedar Rapids, Iowa City does not regulate taxi rates, but instead requires that taxi companies post rates so riders know what the range will be when they get in the cab, Andrew said.

In Cedar Rapids, the city’s taxi ordinance sets specific rates for the first one-sixth mile of a taxi trip and for each one-sixth mile after that, according to the city ordinance updated by the Cedar Rapids City Council in June 2011.

Both Cedar Rapids and Iowa City require an annual taxi vehicle fee, which Iowa City’s Andrew said Uber or its drivers would be required to pay as part of Iowa City’s proposed ordinance.

Cedar Rapids also has a license fee for taxi drivers and a vehicle inspection fee.

To sign up for Uber’s service or to apply as an Uber driver, start online by searching for Uber and follow directions. The service asks for a registrant to provide credit card information so rides can be billed to the credit card when the ride ends.

According to Bloomberg News, Uber Technologies Inc. lists a $40 billion valuation, strengthening its claim as the most highly valued U.S. technology startup. Uber Chief Executive Officer Travis Kalanick told Bloomberg the company is in a “tremendous growth” period that will reportedly create 1 million jobs worldwide next year.

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