The most interesting and disruptive services to enter the service industry recently have been the rideshare services (ie: Uber & Lyft). Their booming success has completely changed the landscape of the private transportation business, and they have been under scrutiny for their business practices and overall business model. Ride-sharing companies are constantly coming under fire in municipalities all over the world, and one of the most recent and “local” stories is taking place in Newark, New Jersey.
There has been an ongoing conflict between Uber and the City of Newark since the beginning of 2016. In January, Evans C. Anyanwu, Newark’s Chief Municipal Prosecutor notified Uber that their drivers we violating Newark’s taxicab ordinance. Newark government officials had been pushed by unionized taxi drivers to regulate the new ride-share drivers. Traditional taxi drivers were quoted saying that have been making as little as 20% of their normal profits since the influx of Uber rides.
There was a great deal of conflict surrounding the issue. The City of Newark proposed a ban on Uber drivers around Newark Liberty airport and Newark Penn Station, but both NJ Transit and the Port Authority refused to get involved. Neither organization agreed to enforce the ban. But the City of Newark continued to be pressured by licensed taxi drivers, and began ticketing Uber drivers and towing their personal vehicles.
As Newark begin to make plans to regulate Uber and other ride-share services in the city, Uber noted that they were prepared to pull their services out all together if specific regulations were passed. The regulations were going to “require drivers to pay annual licensing fees and acquire a separate license to operate at Newark Liberty International Airport”. Uber adamantly opposed the regulation, as the fees that were being proposed would greatly outweigh the fees that taxi drivers are asked to pay annually – and yellow taxis were not required to pay an additional fee for airport services. Uber’s argument was that the city of Newark was willing to force its residents that drive for uber to pay 5 times the amount of fees than their taxi drivers would have to. Newark’s counter argument was that Uber itself had more than enough profit to cover the taxes and fees for its drivers.
As of April 15th, the mayor of Newark, Ras Baraka announced that the city and Uber had come to an agreement, and Uber was allowed to stay in the city. The tentative agreement was designed to keep Uber within the city, while simultaneously providing a boost to the city’s economy. The deal’s terms were that Uber would pay Newark $ 10 million dollars to operate at Newark Airport for the next 10 years, and pay $1.5 million in liability coverage.
But, the problem continues as the Port Authority has stepped in. Officials from the Port Authority say that the deal between Uber and Newark is illegal. Terminal A, which is technically in Elizabeth (not Newark) is the property in question, and there are ongoing debates as to whether or not Uber will be allowed to operate there.