Uber says it will leave Newark if new regulations pass

By Dan Ivers | NJ Advance Media for NJ.com
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on April 12, 2016

NEWARK – As a proposal to regulate Uber and other car-hailing services moves closer to becoming reality in Newark, the company says it is prepared to take its cars and go home.

Ana Mahony, the company's general manager for New Jersey, told NJ Advance Media Tuesday it would have little choice but to vacate the city altogether if the new regulations, which require drivers to pay annual licensing fees and acquire a separate license to operate at Newark Liberty International Airport, are approved by the City Council next week.

"We are disheartened by the process that has taken place so far in Newark," she said. "We will withdraw if this goes through."

The threat marks the latest wrinkle in a dispute between the San Francisco-based company and city officials like Mayor Ras Baraka, who insists Uber drivers should abide by rules similar to those that govern traditional livery services.

Uber has launched an aggressive campaign against the legislation after it was introduced last month, claiming that it would actually subject its roughly 2,000 local drivers to fees well beyond those imposed on taxis.

Levies it points to include a $500 annual fee to operate in the city, $1,000 additional license to pick up and drop off passengers at the airport and Newark Penn Station, and a $1.5 million insurance coverage requirement.

Cab drivers, by comparison, pay $300 per year for a vehicle license, another $50 for a so-called "hack license" for drivers and are required to have insurance coverage for at least $35,000. Yellow cabs do not face any extra fee to operate at the airport.

Craig Ewer, an Uber spokesman, said the disparities were proof the ordinance was "meant to drive Uber out of Newark."

"Baraka's definition of 'leveling the playing field' is forcing 2,000 of his own constituents who drive with Uber to pay five times more than taxi drivers have to," he said.

Baraka responded with a statement of his own, calling Uber "a cash rich company that can afford to pay its fair share of taxes and fees", and accusing it of attempting to disguise its desire for profits as compassion for drivers.

"The company is not fighting for its drivers....UBER cares only about preserving its inflated valuation by Wall Street," he said.

Taxi drivers and their representatives, however, contend they are faced with dozens of other fees that more than makes up for any included in the new ordinance.

Lionel Leach, president of the Communications Workers of America Local 1039, which includes many Newark drivers, said that unlike Uber's contracted employees, most cabbies rent their vehicles for close to $400 per week and pay for bi-annual inspections and off-hours storage.

So-called "autocabs", which do not use meters or operate at the airport, are assigned to six bases owned by separate companies across the city, and typically pay about $120 per week in order to drive the vehicles.

The various fees, according to Leach, make any new added costs Uber drivers may face pale in comparison.

"We're already way beyond the $500 or the $1000 from Uber," he said. "They're not telling the truth."

Uber and Newark have been publicly at odds since January, when the city's head prosecutor sent the company a letter saying any of its drivers operating at the airport and train station would be ticketed or towed. Officials initially backed off the threat, but eventually began enforcing it again after hundreds of cab drivers protested at City Hall.

City officials maintain that their own proposed regulations would not be necessary if state legislators had been able to pass bills of its own– a proposition that has yet to bear fruit in Trenton.

Baraka has said that delay forced him to take matters into his own hands, and said he would continue to fight Uber regardless of any threats to leave town.

"UBER cares only about its valuation and how much its hedge fund backers will walk off with in an IPO," he said. "Not about rider safety. Not about paying its fair share. And not about its drivers."

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