Four transportation companies filed a civil action suit in Superior Court Tuesday against the Rhode Island Public Utilities Commission, which drafted and passed legislation last year to allow the commission to set a price floor on public motor vehicle transactions. RIPUC set a minimum charge of $40 for all trips taken in public motor vehicles — car services outside of the taxi industry. The rule will go into effect Nov. 11.
The law was originally drafted “to address a problem that Rhode Island companies were having with rogue companies that were operating illegally,” wrote Greg Pare, director of communications for the Rhode Island Senate president, in an email to The Herald. The bill distinguishes between PMVs, like sedan services, and taxi companies. The law was sponsored by Rep. Teresa Tanzi, D-Narragansett, and Sen. Bill Walaska, D-Warwick, and was signed into law by Gov. Lincoln Chafee ’75 P’14 P’17 last year.
Lawmakers claim that the state taxi industry has been suffering as a result of increasing pressure from PMV companies. Terrence Mercer, RIPUC’s associate administrator for motor carriers, said the taxicab industry is more heavily regulated than the PMV industry is in his testimony for a hearing on the rule in August. Taxis have territory restrictions, their fares must be approved by RIPUC and they face vehicle age and mileage restrictions, whereas PMVs do not face similar regulations.
The price floor was set to “eliminate the rogue, gray area sedan services that are really acting like taxicabs and, truth be told, stealing the work of taxicabs,” Mercer said.
Tanzi, one of the bill’s sponsors, said that when RIPUC came to her with the drafted bill there was very little opposition in the House. Following passage in the General Assembly, RIPUC held a standard hearing to address details and concerns over the new minimum charge. There was also a second “unprecedented” hearing to further discuss the change, but “very few people” attended, Tanzi said.
But since its passage, the price floor has been met with increasing opposition from local PMV companies. Uber, a mobile app that works to connect PMV companies with consumers, started a petition last week on change.org to repeal the law, said Meghan Joyce, general manager of Uber Providence. As of yesterday, the petition had garnered over 2,100 signatures.
“It’s not true that (the PMV industry) is an unregulated space,” Joyce said, adding that all of the drivers Uber works with are fully certified and licensed with RIPUC.
While Uber is not actually a PMV company, it depends on PMV business because the app allows consumers to find available cars nearby. Uber is attempting to capitalize on the growing trend of PMVs offering high volume, low price rides. In fact, Uber offers several different services to match different cost levels — the company’s website claims that uberX, the lowest-cost option, is “better, faster and cheaper than a taxi.”
Tanzi said she used Uber when she was in Charlotte, N.C., for the Democratic National Convention, and though she enjoyed the service, she found that pricing fluctuated frequently. “There’s no price protection for the consumer,” she said.
In an October report published by RIPUC, PMV companies argued their case by explaining that “it is common knowledge that many taxi cab companies refuse to provide short-distance services due to the minimal financial reward.”
“Rhode Island has plenty of room for a healthy taxi system and a healthy PMV system,” Joyce said. “It’s just a matter of providing consumers with choice.”
The four companies filing the joint suit are L.C. Transportation, Rainbow Sedans Inc., Corporate Limousine Services L.L.C. and Dewey’s Transportation Inc. The suit specifically cites the minimum charge rule and not the entire legislation. The plaintiffs argue that the $40 minimum is an “arbitrary and capricious amount” and that RIPUC set the amount “without any sound factual basis, figures or evidence in support thereof,” according to the summons.
ADVERTISEMENT
