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Wayne Faulkner, Star News

Local cabbies knew they would be in for more competition when the ride-sharing service UberX arrived in Wilmington, but that's not what bothers them most, they say.

Instead, some drivers and their employers say Uber's arrival here brings up issues including insurance, safety and a level playing field on regulation.

They say that an Uber driver's personal auto insurance won't adequately protect a customer and that Uber's inspections and driver background checks come less often and are less rigorous than those local companies must adhere to.

Local cab drivers and companies are subject to regulation here and must pay a number of fees to operate. And, the number of taxi licenses is limited to 155 in the city of Wilmington. Thanks to a change in state law last year, Uber drivers appear not to be subject to city regulations, including those fees.

Arrived in June

Uber, which has attracted billions from investors, started service in Wilmington June 26.

The company uses mobile app software to connect passengers with drivers. Customers download the Uber app on their smartphones and can then call up an Uber driver, who uses the phone's GPS to detect the rider's location.

A customer also can view rates in the app and get a fare quote. The fare is charged to the customer's on-file credit card online.

The arrival of Uber and similar companies such as Lyft and Sidecar has spurred traffic-stopping protests by cabbies on both sides of the Atlantic.

There hasn't been anything like that in the Port City, but some here are angered by what they see as an interloper.

"They hand out their app to anyone with a personal car," said Tracie Crisante, manager of Katt's Taxi, who started in 1996 dispatching and managing cab companies in Wilmington. "They have managed to wriggle their way into a lot of cities."

But Uber gets some empathy from at least one local cab company owner.

"I have very mixed feelings (about Uber) because I was a driver and now I'm an owner," said Kathleen O'Keefe of Safe Ride Taxi, who serves Wilmington International Airport.

"Uber is putting money in the driver's hands and going up against the big cab companies," she said. But O'Keefe also said that while she sees Uber "creating jobs, they are also taking them away."

Not afraid of competition

Crisante said taxis are not afraid of competition. "There are illegal cabs everywhere," she pointed out.

Uber "could be a great service and great competition," Crisante said. But she faulted "the way they are going about it – the way they are leaving their customers at risk."

Crisante and local cab drivers say that Uber drivers are using their personal auto insurance as protection and that it won't cover their passengers in case of an accident.

"There is a livery exclusion on North Carolina personal auto policies," said Jonathan Peele, owner of Coastline Insurance Associates in Southport. The driver would need a commercial policy to cover the car and passengers, he said.

"It could be a huge issue with them if there is an accident with injuries," Peele said.

The state goes along with that line of thought.

Commercial policies

"Drivers would need a commercial auto liability policy to cover their liability for providing ride-share services," said Kerry Hall, spokeswoman for the N.C. Department of Insurance. But there are no state statutes and regulations that address the subject, she added.

For its part, Uber says it holds an excess commercial insurance policy with $1.5 million of coverage per incident for ride-sharing trips originating in North Carolina.

"This policy covers drivers' liability from the time a driver accepts a trip request through the app until the completion of a trip," said spokeswoman Kaitlin Dorkosh. "This policy is in excess to the driver's own policy, but it acts as primary insurance if the driver's policy is not available for any reason, covering from the first dollar." Dorkosh said. "This $1.5 million limit meets or exceeds coverage for taxis and limos in the state."

Crisante questioned how Uber could offer the liability insurance if it doesn't own the cars.

UberX drivers are not employees of the company, and Uber does not own the cars, the company said.

But Dorkosh said that Uber's insurance policy does not require it to own the cars. "The policy covers the liability of drivers who have entered into a contract with Uber's ride-sharing subsidiary, Raiser," she said.

Safety of the vehicle is another issue cabbies bring up.

Public safety

"Competition is good, but public safety is the No. 1 priority," said Mary Donnell, owner of Sea Side Transportation.

"I just don't think (Uber is) a safe alternative to taxis," she said. "Our vehicles are inspected every year," she said. Those who serve the airport must have inspections every three months.

Uber says its drivers must comply with state requirements for vehicle inspections.

Rules for cabs that service the airport are more stringent.

Taxi companies must pay $200 quarterly for a permit to service the airport, said Joshua Price, owner of Price Is Right Transportation. Drivers also pay $25 for a criminal background check, $10 for a passport photo.

Additionally, a drug test comes twice a year, O'Keefe said.

And there is a driving record check every year, Price said.

Uber says its background checks include driving records, criminal databases and checks against the national sex offender registration.

Change in the law

In the city, "if you can't get a Wilmington permit you can't operate legally," Crisante said.

Uber, however, doesn't appear to be subject to those regulations.

In action by the N.C. General Assembly last year, a clause was inserted into a regulatory reform bill that reads: "Nothing in this section shall authorize a city to regulate and license digital dispatching services for pre-arranged transportation services for hire."

That means that Uber drivers, unlike cab drivers, don't even have to pay the city a $15 business license fee, said El Taruas Bluford, the city's taxi code enforcement officer. He said Uber lobbied for the change in statute.

City cab drivers also have to pay $15 for a driver's permit, pass a drug test that costs $35 and send their fingerprints to the FBI, a $21 charge, Bluford said. And that is every year, he added.

Uber isn't aware of any city fees for ride sharing, said spokeswoman Durkosh, "but we look forward to working with city officials to develop policies that make sense for Uber."

The reason there are so many regulations is to protect the public, Donnell said.

"You go back to all the regulations we have to go through," Donnell said. "Their drivers aren't going through anything."

Link to original article.

Posted 1:45 PM

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NOTICE: This and all content is developed from sources believed to be providing accurate information. The information in this material is not intended to be used as tax or legal advice. Please consult with a tax and/or legal professional for detailed information regarding your individual situation. Some of this material was developed and shared by Coastline Insurance Associates of NC to provide information that may be of interest. Coastline Insurance Associates of NC is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
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