Uber, Lyft changing the way people travel in Sonoma County

Within the past year, the North Coast taxi industry has experienced a massive wave of disruption following the arrival of ride-booking companies Lyft and Uber in Wine Country.

The statistics back it up. Uber said it had 600 Santa Rosa drivers who made more than 100,000 trips in its first year of service, while in tourist-rich Napa County, it had 1,000 drivers who made 250,000 trips.

“We have really seen incredible growth in the area,” said Uber spokeswoman Laura Zapata.

Lyft said it had hundreds of drivers in the two counties, but a spokeswoman declined to give specifics.

Local taxi companies are feeling the impact. Last fiscal year, the city of Santa Rosa collected $18,000 from taxi companies, which are required to pay a fee based on gross revenues. This fiscal year, it has received only $9,000 through 11 months, though some of the 24 companies with active franchises in Santa Rosa may have been late in paying their fees.

The numbers in this debate have significant ramifications in a battle between the brash, high-tech startups from San Francisco and the more traditional, highly regulated taxi industry, which has long been a part of this country’s fabric, from serving as grist for plots in TV shows to providing employment for recent immigrants.

The reverberations are playing out at city council meetings, in courts and in Sacramento, in parking lots where taxi drivers converge during slow periods, and at hotels and restaurants that help drive the local economy and are a key conduit to the North Bay transportation industry.

But it can truly be seen in the drivers themselves, for example, in the difference between the circumstances of Raymond Martin and John Myerson.

Martin, 63, has been a driver for Uber for the past 10 months, a perfect part-time job given he has some flexibility in his full-time job as a finance manager at Manly Honda in Santa Rosa. It allows him to pick up riders as he goes to and from his home in Windsor.

Martin said he averages about $30 to $35 an hour when he switches on a smartphone app that coordinates pick-ups for passengers in his 2013 Ford Focus. Trips can range from a few miles across town to all the way to San Francisco. But most are tourists visiting wineries or other local attractions, and they don’t want to drink and drive. The extra money goes to pay off bills. The bonus is Martin likes to drive and meet new people, which can almost be therapeutic.

“I like Uber because I meet really interesting people. I have had CEOs from companies. I have had children, like high-school kids who wanted to visit their friend who had cancer,” Martin said. “Every single customer, I would say 99.9 percent are extremely happy and thankful.”

The outlook is not as bright for Myerson, owner of First Class Taxi in Fulton and general manager of Golden Taxi Service, who has been in the local industry for four years.

Golden has a fleet of 12 cabs, but only three are in service given the competition from the startups, which can offer rides for less given that they operate with less regulation and the drivers are considered independent contractors rather than employees. Another draw is the ease of use with their smartphone apps, which also handles all payments digitally.

Since Uber’s entry into the market a year ago, 20 drivers have left Golden because they can’t make ends meet, Myerson said. “They try to work enough hours ... but it’s less than minimum wage,” he said. “It’s because Uber has taken all the work.”

Myerson said he doesn’t mind competition, but complains about the unequal playing field from Uber and Lyft drivers. They do not face the same regulations and costs as taxi drivers, who must undergo extensive background checks and carry commercial insurance.

“It’s slowly disappearing,” he said of his industry. “A lot of people are trying to hang on. Definitely everybody has downsized. If you can’t have enough work, you don’t stay in business.”

Taxi drivers have taken their complaints to the Santa Rosa City Council, which regulates taxi companies that operate in the city. But as city officials have explained to the drivers, the city is limited because the new breed of ride-sharing companies are regulated by the state Public Utilities Commission, which designated them as Transportation Network Companies in 2013.

“The city certainly understands and sympathizes with the position they are in,” said Santa Rosa City Attorney Caroline Fowler. “The city’s hands are tied.”

The City Council plans to have a study session on the issue in the future, Fowler said. She also noted there has been talk statewide on whether cities could make these TNCs apply for business licenses.

The PUC doesn’t have jurisdiction over Uber and Lyft at airports, a lucrative market for both taxis and ride-sharing companies. Last fall, Charles M. Schulz–Sonoma County Airport issued a cease-and-desist order to both Uber and Lyft because their drivers were picking up passengers without any agreement between the parent company and the airport, said Jon Stout, airport manager.

“This has been very quickly evolving,” Stout said. “So far, to the best our knowledge they are honoring it.”

Martin, however, said he still picks up passengers from the airport. Underneath his sun visor, a card displays the times of arriving flights.

The airport regulates commercial vehicles that enter its property, and it has been working with Lyft to craft policies that would allow its drivers to pick up passengers, Stout said. Uber has so far not participated in the talks.

The discussions are complex as they involve such issues as who should inspect the vehicle, the type of commercial insurance required for the automobile, and how to structure geocoding that would notify airport officials when a Lyft car is entering the complex.

Stout said an agreement may be finalized by next month.

The main action on these businesses has occurred at the state Capitol, especially as both sides seek to gain leverage through high-stakes lobbying. That crystallized this year during the debate over legislation by Assemblyman Adrin Nazarian, D-Sherman Oaks, that would have required all TNC vehicles to be registered with the PUC and display decals, while subjecting drivers to mandatory drug and alcohol testing.

“Ride-sharing is simply high-tech hitchhiking ... consumers are being blindly picked-up by complete strangers and entrusting them with their safety,” Nazarian said in a statement when he introduced the bill.

But the companies strongly came out against bill, and Nazarian was forced to remove a section that would have required a Department of Justice fingerprint background check. He later decided to hold up the bill until next year. A separate bill will move this year including his proposal to alert ride-sharing companies immediately when a driver is arrested for a DUI or other serious offense.

Robert Callahan, California executive director of the Internet Association, which represents Uber and Lyft, defended the background checks on their drivers. He noted that the apps allow users to rate their drivers. In addition, they allow riders and the company to track the location of the car at every part of the ride, features that some cab companies may not have.

“Parity for parity’s sake isn’t necessarily the best public policy,” Callahan said. “You shouldn’t be looking at one issue in a vacuum to determine if there is a level playing field.”

Daniel Savage, chief of staff for Nazarian, noted that his boss had to wait until next session to attempt another push as result of the lobbying prowess of the TNCs.

“I guess if you have a valuation of $50 billion, you are not going to lose an issue if you end up having to spend a couple hundred thousand dollars,” Savage said, referring to Uber’s estimated valuation.

At the state level, Uber spent $725,341 last year on government lobbying efforts and has already spent $109,293 during this year’s first quarter, according to state records. Lyft spent $271,127 last year on state government lobbying efforts and nothing in the first quarter.

In contrast, the Taxicab Paratransit Association of California spent $39,430 last year on state government lobbying efforts and has already spent $10,000 in the first quarter,

In addition to the Sacramento activity, there is also a battle in the courts. Most recently, the district attorneys of San Francisco and Los Angeles counties filed suit against Uber in December, alleging “untrue or misleading” statements about the thoroughness of its driver background checks. Uber challenged the complaint, arguing that prosecutors failed to state sufficient facts for a cause of action. Lyft, however, settled its case for $500,000.

The battle is likely to escalate locally this summer as Uber unveils its UberLimo service in Sonoma and Napa counties, which is an estimated 20 percent of the overall local market. The service will compete with upscale transportation firms such as Petaluma-based Pure Luxury Transportation, whose customers range from affluent tourists in town for a weekend to locals who want to dash over to fine restaurants in Healdsburg or Yountville.

“There is the relationships that I have built with everybody in this (tourism) industry,” said Gary Buffo, owner of Pure Luxury. “I don’t think in the long term they (Uber and Lyft) can make that up.”

Indeed, the competition will play out at high-end resorts and restaurants. Meilani Naranjo, manager of the Farmhouse Inn and Restaurant in Forestville, said she is sticking with local services such as Pure Luxury and others for her customers, given the trust they have established over numerous years.

“We would rather use the familiar,” Naranjo said. “With Uber and Lyft you don’t know what you are getting.”

But over at the Fairmont Sonoma Mission Inn and Spa, spokeswoman Michelle Heston said her front desk has seen “a nice kind of steady stream” of ride-booking users, especially from Uber.

“According to our guests, they love it. It’s really personalized. They love it is a local that can share information and history, and suggestions that are very honest and candid,” she said.

Buffo, however, isn’t waiting for Uber. Earlier this year he started BlinkCar, one the country’s first on-demand services by a traditional limousine company. Riders using an app can get a regular or luxury sedan or SUV driven by one of his employees, not an independent contractor.

The results have been great so far, he said. Pure Luxury has seen its revenues increase 63 percent this year and Buffo is looking for another 70 drivers for his 175-employee business.

Even with such moves, Buffo is keeping his eyes on Uber and Lyft. He predicts other industries - whether they may be trucking firms or pizza delivery guys - will likely be their next targets.

“Uber wants to take over the world,” said Buffo, who serves as president of the National Limousine Association, a position where he constantly monitors the legislation and lawsuits over these upstarts.

News Researcher Janet Balicki contributed to this article. You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.