Skip to main Content

Pay attention, big decisions are being made about how we get rides

  • Author: Charles Wohlforth
    | Opinion
  • Updated: March 24, 2017
  • Published March 24, 2017

Everything is happening at once to change the way we get rides in Anchorage, including a vote in the local election on April 4, and it's understandable if most people don't know what's going on.

These are big changes that affect more than taxi drivers and tourists. Voters need to pay attention, at least for a little while.

I had been avoiding the topic myself until I went to the Anchorage Assembly meeting on Tuesday and read the various laws under consideration. It's boring. But public lack of interest is one reason for the bad system we have now, so it is time to check in.

Voters will decide whether to allow more competition among taxis. The Legislature will decide whether to allow companies such as Uber and Lyft to come to Alaska and compete with taxis.

A third issue, between the state and local governments, is who would regulate Uber and Lyft and if that system will be fair to the taxi industry. On that issue, the legislature is on the wrong course.

If you've tried Uber or Lyft in another city, you probably want it here. I've used Uber in New York and Los Angeles and I would not use a taxi again, given the choice. This simply is a better product.

Instead of calling or hailing a taxi, Uber's app allows the user to request a ride and get the price up front, plus the exact time the car will arrive, and then to track the car as it approaches. The pre-arranged price goes straight to your credit card. You don't pay or tip the driver.

Quality stays high because users and drivers rate one another. I've used the app for half a dozen rides and all have been better than a taxi ride. And cheaper.

A cab in Seattle recently took me on a ridiculous route to run up the meter. In Atlanta a taxi driver didn't drop the meter and then tried to overcharge me (and probably did). None of that can happen with Uber because the price is agreed in advance and the money is collected by the app.

The taxi industry and cautious regulators have kept Uber and Lyft out of Alaska, one of the last states where they are not operating. But now the tide has turned. Politicians realize the companies' absence disadvantages us with tourists and tech-oriented potential workers.

Taxis have served Anchorage under an extraordinarily rigid and complex regulatory code written with the industry over many long Assembly meetings in the distant past. Regulation has been good to investors in the cab industry.

The municipality issued taxi permits that can be bought and sold, like liquor licenses or commercial fishing permits. Permit prices in the secondary market went well over $100,000.

Before drivers make money, they have to cover payments to the permit owner, the car owner and the dispatch company. The car owner and dispatcher are at least adding value. The permit owner does nothing for the passenger in exchange for the money he or she collects.

If you use cabs, you can judge for yourself how well this system works. It doesn't produce enough cabs at peak hours or in remote parts of the city.

The Assembly passed an ordinance last year to change to an open-entry system for taxis in five years, allowing anyone to get a permit. That will destroy the resale value of the old permits, so owners naturally fought back, putting a repeal of the ordinance on the April ballot.

But why would we vote to repeal? Other than the permit owners, who doesn't want more cabs on the road and drivers getting more of the fare?

The permit owners' best chance, I suspect, is confusion. If you want more cabs, you have to vote no.

The legislative action is more significant for those who want Uber and Lyft and how they end up being regulated and competing.

The Alaska Department of Labor considers the drivers to be employees rather than contractors, and that ruling has kept the companies out of the state. A bill that passed the state Senate Thursday would categorize Uber and Lyft drivers as contractors, as state law already does for taxi drivers (and, curiously, for hockey players).

So far, that seems fair. But the bill sponsored by Sen. Mia Costello, R-Anchorage, also shields the companies from local regulation. That's not fair and not a good plan.

Costello's bill puts minimal requirements on Uber and Lyft, including background checks for drivers and insurance requirements, but doesn't provide for new enforcement or penalties.

If you have a problem, you will have to work it out with the company, sue, or complain to the Division of Motor Vehicles, the Division of Insurance or the business license people. The Department of Commerce and Economic Development estimated that work would require two new employees and cost $280,000 a year, but the Senate Finance Committee deleted that.

Good luck with your complaint.

Costello argues that the state has to block local regulation so cars can go between cities without facing inconsistent requirements. But surely there is a less extreme way to solve that rare problem.

On Tuesday, the Assembly passed a better scheme. It would go into effect only if Costello's bill passes to exempt drivers as employees but is also amended to allow local regulation.

The ordinance would require Uber and Lyft to buy permits. That money would fund the existing Transportation Inspector and Transportation Commission to make sure they follow the rules, including background checks and vehicle inspections, and to accept complaints and help riders find lost items and such.

Assembly members crafting the law said they also plan to relax the rules on taxis. As Assembly member Forrest Dunbar said, "We want (Uber and Lyft) to compete with the cabs on quality and price rather than the ability to avoid regulation."

That makes sense. Let the best service win. To do that, the Legislature should let local governments handle this.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at) Send submissions shorter than 200 words to or click here to submit via any web browser.

Local news matters.

Support independent, local journalism in Alaska.