In the midst of an active Rhode Island Superior Court case, a hotly-debated $40 minimum fare for public motor vehicle operations — non-taxi car and van services — will go into effect today, the Providence Journal reported. While ride-sharing app services such as Uber and Lyft are not public motor vehicle companies, and the minimum fare will not affect transactions through the apps, they rely on the PMV industry for drivers.
Rep. Teresa Tanzi, D-Narragansett, and Sen. Bill Walaska, D-Warwick, sponsored a bill in the General Assembly — drafted by the Rhode Island Public Utilities Commission — that would allow the commission to set a minimum fare. The bill passed easily and was signed into law in 2012.
The taxi industry is more heavily regulated than PMV companies. Taxis are required to abide by territory, vehicle age and mileage restrictions, while PMVs are not. Taxis also must get fares approved by the RIPUC in advance, while PMV companies do not have any kind of price regulation, leaving consumers unprotected from price fluctuations.
The reason PMV companies are not as heavily regulated as taxi companies is that they are mostly used for high-cost, low-volume transactions. In contrast, ride-sharing app services allow customers to use PMVs for low-cost, high-volume transactions. While the RIPUC has stated on numerous occasions that the intent of the new price floor is to protect the already suffering taxi industry in Rhode Island, there is widespread agreement that the minimum fare was introduced to target the operations of ride-sharing apps. The new price floor would establish the PMV industry as a premium service, said Samuel Kennedy-Smith, a lawyer for the parties filing the complaint against the RIPUC.
The minimum fare, which the commission set at $40, was originally to be implemented in November 2013, The Herald previously reported.
Prior to the original implementation of the minimum fare, four transportation companies filed suit against the RIPUC in an attempt to repeal the rule, The Herald reported at the time. Judge Luis Matos of the Rhode Island Superior Court ruled in favor of the RIPUC.
Last December, a larger coalition of five transportation service owners and drivers and 35 PMV passengers filed a complaint in Superior Court against the RIPUC, requesting both that the rule’s enforcement be postponed until closure of the case and that the rule “be declared void and otherwise unconstitutional.”
The RIPUC had agreed to delay the implementation of the rule until the plaintiffs could formally request the rule’s prolonged suspension, Kennedy-Smith said. Judge Brian Van Couyghen of the Superior Court announced at a Jan. 29 hearing that the court would not grant the plaintiff’s request for the suspension during the case, prompting the RIPUC to announce Jan. 30 that the implementation of the rule would begin Monday.
Concerned that the implementation of the fare will pose serious risks to the businesses operated by the plaintiffs, Kennedy-Smith said he filed a writ of certiorari Friday, which asked the Supreme Court to review Van Couyghen’s decision.
Kennedy-Smith added that under normal circumstances, he would request an appeal after the Superior Court’s final decision, but the dramatic nature of the minimum fare would have an immediate effect on businesses that operate PMVs. How long the Supreme Court will take to respond to the writ is unknown.
“If this isn’t granted, my guys are going to go out of business,” Kennedy-Smith said, explaining his reasoning for filing the writ. “Even though I wouldn’t normally appeal at this point, given the facts and circumstances, we need to have another look at this,” he said.
It remains unclear as to how the RIPUC will enforce the minimum fare.
While Uber has not participated in any of the legal action in conjunction with the PMV companies who filed suit against the RIPUC, they filed a motion to reconsider the rule in November 2014.
When asked how the company plans to go about future operations in Rhode Island under the specter of a minimum fare, Mary Caroline Pruitt, a communications associate for Lyft, wrote in an email to The Herald that the company has “had productive meetings with members of the General Assembly.”
Uber representatives could not be reached for comment.
