Anatomy of an Uber-Horrible Bill

AUTHOR’S NOTE: This is a long one, so grab one of the your favorite beverages and climb into a comfortable chair…

I love Uber.  I use Uber.  I’ve written in support of Uber.

But I hate the Uber bill that Republicans in the Nevada State Senate have drafted and are now trying to shove down Uber’s throat – with Uber, like in one of those hostage videos, voicing coerced support.

If you’re still unfamiliar with Uber, it’s the largest of a modern-day service called “ride-sharing.”  Instead of calling a taxi when you need a ride somewhere – especially when traveling – you use your smartphone to hail an Uber driver using their own car to pick you up and take you where you want to go.

The service – available in every major city in the U.S. EXCEPT Las Vegas – is a gazillion times better than taking a cab, and usually cheaper, too.  At least in my opinion and the opinion of millions of other Uber users.

As such, the Taxi Cartel, along with its unionized driver workforce, are on a death march to kill Uber in its cradle here in Nevada.

A bill to allow Uber to operate in Nevada shouldn’t even be needed.  The company should have to pay the state and local business license fees just like any other business and open shop.  Period.

That, of course, would be the conservative limited-government/free-market path you would think a GOP majority in the Legislature would pursue.

But you’d be wrong.

We may have a Republican majority this session in the Legislature, but we have anything but a conservative majority – in either house.

As such, Republicans in the state Senate crafted an Uber bill that included new taxes and fees.  That meant the bill needed a 2/3 super-majority of votes to pass.

And because Republican Senate Majority Leader Tax Hike Mike Roberson is such a bombastic, egomaniacal nimrod, every Democrat voted against the bill a couple weeks ago, seemingly killing it.

But nothing is really dead in the Legislature until sine die.

Enter AB175.

AB175 is a rather innocuous bill that passed in the Assembly way back on April 6^th.  The bill essentially says that passengers in taxicabs have to wear their seatbelts.  That’s it.  However…

The bill is now in the Senate, where Republicans are trying to resurrect the Uber bill and make it palatable to Democrats.  So they’ve proposed an amendment to the taxi seat belt bill which is, in reality, the Uber bill that was killed a couple weeks back.

And that’s the first problem with the amendment.

Article 4, Section 17 of the Nevada Constitution clearly states…

“Each law enacted by the Legislature shall embrace but one subject, and matter, properly connected therewith…”

Now how in the wide, wide world of sports is the subject of seatbelt usage in the back of a taxi connected to the subject of ride-sharing?

It’s not.  Other than the fact that both taxis and passenger cars both have seatbelts in them.

And that’s the sort of thin reed the Legislature historically and consistently uses to stitch together omnibus Frankenstein legislation that is so confusing and complicated that almost no one knows what the hell they’re voting for by the time the bill hits the floor.

But that’s the least of my objections to this bill.  Let’s look at it from a conservative, limited-government viewpoint.

The conservative Assembly Policy Committee, chaired by conservative Assemblywoman Michele Fiore, evaluates proposed bills using a 5-point test.  Here are the first two…

1. Does the bill reduce government regulations, reduce the size of government, eliminate entitlements, or eliminate unnecessary programs?

2. Does the bill reduce taxes or fees?

We’ll get to the second one later.  For now, let’s see how AB175 stacks up against criteria #1…

First of all, instead of simply requiring Uber and other ride-sharing companies – known technically as “transportation network companies” – to open and operate by paying the state and local business license fees like every other business in Nevada, the proposed amendment to AB175 requires that all ride-sharing companies be regulated by – get this – the…

PUBLIC UTILITIES COMMISSION!

How in the wide, wide world of sports does someone picking me up in their own Toyota Prius and giving me a lift to the grocery store constitute a “utility.”

It doesn’t.  And this alone is reason enough to reject this Uber bill.

Here’s the thing:

Republicans who sponsored the Uber bill screwed up royally by trying to placate the Taxi Cartel by subjecting ride-sharing companies to such overbearing and unwarranted government regulation in the first place.

First, it didn’t make the taxi companies any happier.  And secondly, it meant imposing new fees on the ride-sharing companies, which meant the bill requires a 2/3 super-majority vote instead of a simple majority vote.  More on that later.

So not only is the bill anti-conservative because it increases government regulations and increases the size of government, it was strategically dumb to boot.

The argument for putting ride-sharing operations under the command-and-control of the PUC is “to ensure the safety, reliability and cost-effectiveness of the transportation services” provided by Uber and other ride-sharing services.

What a load of liberal, big-government crap.

First of all, Uber isn’t a public transportation business.  You can’t just call up Uber on the phone or hail an Uber car from the curb on the Strip.  You have to JOIN Uber.  You have to be a member.

As such, it is the company’s responsibility to ensure the safety of its customers, not the government’s.  It is the company’s responsibility to ensure the reliability of the service, not the government’s.  It is the company’s responsibility to ensure the cost-effectiveness of the service, not the government’s.

If Uber fails to provide for safety, reliability and cost-effectiveness, it will lose customers.  It will lose members to other ride-sharing companies.  Or back to taxis.  The free-market, not the government, will ensure the safety, reliability and cost-effectiveness of the business.

In short, there is NO compelling community interest in having the Public Utilities Commission, or any other government commission or authority, regulate ride-sharing services in Nevada.

But if there is…

Then why does the bill EXEMPT “car-pooling” from such regulation even if the car-pooling is facilitated by a “digital network or software application service” and even if “a fee is charged by the person who provides the digital network of software application service”?

This is legislative hypocrisy writ large.

Onward…

Section 30 of the amended bill begins to outline the overbearing compliance and record-keeping paperwork ride-sharing businesses will have to maintain and submit, including extensive information related to background checks.

Again, ride-sharing services are PRIVATE membership clubs, not public transportation services.

It is up to the companies to provide safeguards for its members who know the risks involved and are willing to accept them.  If they don’t, they’ll lose business.  Indeed, they’ll go out of business.  And that should be of no concern to the government.

That said, let’s explode the myth that government regulation really safeguards the public.

Is there any industry more heavily regulated by the government than the medical industry?  And yet a couple years ago we discovered that professional doctors and nurses were re-using syringes and infected people with hepatitis C!

Where were all the government regulations that were supposed to protect the public?

And what about the Salmonella outbreak that sickened 196 customers who ate at the Firefly tapas restaurant in Las Vegas back in 2013 despite the massive and intrusive health department regulatory system in place?

Or how about this?

Is there a more vulnerable group of citizens needing and deserving protection than our children?

Yet just last week we discovered that a child molester who was arrested in 2008 was allowed back into a public school classroom as a music teacher where he was recently arrested AGAIN for sexually molesting another child.

Yeah, those government background checks really protect the public, don’t they?

Moving on…

The proposed Uber bill restricts drivers to those who are “at least 19 years of age.”

Huh?  Why not 18?  18 is old enough to fight in Afghanistan.  It’s old enough to vote.  It’s old enough to sign contracts.  So why isn’t it old enough to pick somebody up in their car and drive them to a hotel?

And here’s one I’m not sure about…

The amendment states that all drivers must have a driver’s license unless they are “exempt from the requirement to obtain a Nevada driver’s license.”  Does that mean it’s OK for illegal aliens to drive for Uber?

The law would also ban anyone convicted of DUI within the last seven years from driving for a ride-sharing business.  The good news is that the statute of limitations has passed and my buddy Jon Ralston would be eligible to drive for Uber if that taxpayer-funded TV show gig of his doesn’t pan out.

But I digress…

The bill states that a ride-sharing company “shall terminate” any driver who fails to notify the company of “a change in his or her address, driver’s license, motor vehicle registration or automobile liability insurance information within 30 days after the date of the change.”

First of all, where does the government get the authority to dictate the terms of hiring, firing and contracting for a private company?  But beyond that, if the driver fails to notify the company, how is the company supposed to know and, therefore, “terminate” the driver with or without extreme prejudice?

Another section of the bill says ride-sharing companies may not “accept cash as payment of a fare.”

Now, in fact, this is already Uber’s policy.  All transactions are conducted via the credit card you provided at the time you joined as a member.  But according to the disclaimer on the dollar bill I have in my pocket, it is considered “legal tender for all debts, public and private.”

Now, it’s one thing if the private business wants to establish a policy of not accepting cash, but what business is it of the government to dictate to a private business whether or not it is allowed to accept “legal tender” as payment?

Section 32 of the bill prohibits drivers from driving a person from point A to point B if the vehicle has “less than four doors.”  Again, this is already Uber’s policy.  But if the company wanted to allow the use of 2-door cars for the members of their private club, what business is it of the government to tell them they can’t?

Similarly, the bill prohibits the use of any vehicle “designed to carry more than eight passengers” – which leaves me and my 15-passenger Ford E-350 out of the market for no reason whatsoever.

If my van is safe enough and good enough to transport my kids and their friends back and forth from a soccer game or scouting trip, why isn’t it good enough to drive Granny to her doctor’s appointment or Joe Tourist from Caesar’s Palace to the Fremont Street Experience?

Again, if the private ride-sharing company adopts these prohibitions, fine.  Their company; their rules.  But why would any good limited-government conservative ever want to let the government dictate these policies?

Then there are a ton of additional, time-consuming and costly government regulatory reporting requirements the bill mandates in sections 34-37, including trip records, vehicle inspections, customer complaints, etc., etc., etc.

There are also plenty of additional micro-management operational requirements – such as requiring that the driver’s photograph be posted on a website – that are already being done by Uber and others but which shouldn’t be in the purview of a government bureaucracy in any event.

Section 38 is HILARIOUS!

First, in sub-section 1, the bill states that while the intent is to severely regulate private, ride-sharing membership clubs like a public taxicab company, the drivers of the ride-sharing company are not allowed to pick up passengers off the street or at a hotel the way…well, um, taxicabs do.

So ride-sharing drivers will be treated and controlled like taxi drivers…but won’t be allowed to operate like taxi drivers.  Yeah, that makes sense.

In addition, ride-sharing drivers will not be allowed to pick up passengers at the airport unless they obtain a separate permit, pay a separate fee and comply with separate requirements.

Section 38 then goes on to prohibit ride-sharing drivers, “With respect to the passenger’s destination,” from deceiving passengers, taking them somewhere other than where the passenger requested or “Take a longer route to the passenger’s destination than is necessary” (long-hauling).

All practices that people regularly complain about from the already highly-regulated existing taxi industry!

In fact, those rip-off practices are among the reasons so many people prefer to use a ride-sharing company…because if a ride-sharing company or driver operates in such a deceitful manner, the club members will simply stop doing business with them and use a competitor.

The government/bureaucracy micro-managing continues…

Ride-sharing drivers will be prohibited from refusing to transport a member/customer unless the driver can prove to the government that he or she had “good reason” to fear for his or her safety.

Good luck defining “good reason.”  And why should the government’s definition/determination of “good reason” be given supremacy over the definition/determination of the drivers themselves?

Section 39 says ride-sharing drivers can’t drive drunk.  Duh.  That’s already against the law for ANY driver.  This one must have come from the Department of Redundancy Department.

Section 41 continues the government micromanaging insanity.  It requires that all customer complaints filed against a ride-sharing operation be resolved by the Division of Consumer Complaint Resolution for the Public Utilities Commission.

As opposed to all other private businesses for which the private Better Business Bureau exists.

But unlike the BBB, the government’s Complaint Czars will have the power to impose “disciplinary action” on the ride-sharing company, including suspension of its operating permit and a fine of up to $100,000 per violation, the amount of which may be based on “any factor” determined by the Commission.

Good…grief.

Which brings us to the second test applied to bills by the conservative Assembly Policy Committee: “Does the bill reduce taxes or fees?”

No.

In fact, it does the exact opposite.

First, because the bill requires ride-sharing companies to be over-regulated by the PUC, an application fee in ADDITION to the state business license fee will be required.

But that’s not all…

Section 27 of the bill requires ride-sharing companies to not only pay the application fee when it first requests government permission (“Mother may I?”) to operate in Nevada, but for every year thereafter the company will be required to pay an “annual assessment” which will be “based on the gross operating revenue” of the company.

In other words…well, actually, the exact words…a gross receipts tax.  Just like the one overwhelmingly rejected for all other businesses by voters in Nevada in last November’s election.

But here’s the real kicker…

Section 28 slaps a 3 percent “excise tax” on every trip by a ride-sharing company.  And that amount isn’t added to just the fare.  In fact, the 3 percent excise tax will be applied to “all fees, surcharges, technology fees, convenience charges for the use of a credit or debit card and any other amount that is part of the fare.”

Make no mistake.  This isn’t a tax on Uber.

It’s a tax on YOU.

Hang on.  It gets worse…

Sections 51 and 52 imposes this new excise tax on buses, limousines and taxicabs, too!

More on that as it relates to the Taxpayer Protection Pledge in a minute.

So what will the government be doing with the estimated $100 million in additional money YOU will be paying?  Glad you asked.

The first $5 million will go to the State Highway Fund.  The rest will go to the general fund, including, I’m told, earmarking some of the money to pay for a new medical school at UNLV!

So a bill that purportedly was drafted for the purpose of protecting the public has been perverted into a revenue raising vehicle for government programs and services that have nothing whatsoever to do with regulating the operation of ride-sharing services.

It’s a tax hike mechanism, plain and simple.

Which brings us to the subject of whether or not a vote for this bill would be a violation of the Taxpayer Protection Pledge.

Grover Norquist, president of Americans for Tax Reform and the “father” of the Pledge, and I have discussed this issue at length and there’s still some unresolved ambiguity here.

Imposing taxes on something that was once illegal and then made legal is NOT a violation of the Pledge.

Case in point: legalizing and taxing medical marijuana.

That said, there is some dispute as to whether or not ride-sharing is illegal in Nevada.  As you’ll recall, one judge in Las Vegas last fall said it was legal of Uber to operate, only to be over-ruled by a second judge out of Reno (who many suspect was strongly and inappropriately influenced by the Taxi Cartel).

But for argument’s sake, let’s assume that ride-sharing is currently illegal in Nevada and this bill would make it legal.

In that regard, voting for the imposition of the application fee, the annual gross receipts tax and the new excise feel – while totally objectionable – would nevertheless NOT be a violation of the Taxpayer Protection Pledge.

HOWEVER…

Because the greedy little curs decided to extend the excise tax beyond ride-sharing companies and apply it to buses, limousines and taxis – which ARE presently legal – a vote for this bill with that new tax hike included almost surely would be a Pledge violation, although I’m still waiting to get a final determination from Grover.

All that said…

Even if none of the new taxes and fees are determined to be a violation of the Tax Pledge, I would still urge limited-government, fiscal conservatives to reject this amendment to the original seat belt bill for all the reasons outlined above based on the principles of the Assembly Policy Committee.

What Republicans ought to do is reject the notion of placing ride-sharing services under the regulatory command-and-control of the Public Utilities Commission or any other government board and “legalize” them like any other new, private business doing business with private members/customers.

In that way there would be no reason to require a 2/3 super-majority vote, and Republicans could allow Uber and Lyft and other ride-sharing companies to begin providing service to Nevada’s citizens and tourists immediately by the simple majority vote that they enjoy in both houses of the Legislature.

So let it be written; so let it be done.