Ride-sharing is an internet-based service or "transportation network company" that coordinates the use of private cars to provide on-demand passenger service within cities. The service is often labelled a "category killer" for its use of technology and social networks to efficiently replace older categories of service, such as taxi cabs. Those efficiencies, along with a lack of burdensome regulations in most markets, allow companies such as Uber, Lyft and Sidecar to offer superior service at lower cost. Critics have questioned whether transportation network companies adequately protect consumers and drivers from fraud and safety hazards.
After extensive lobbying by and on behalf of Uber, Birmingham and the suburbs of Mountain Brook and Homewood passed updated ordinances in late 2015 explicitly allowing app-based ride-sharing companies to operate in those cities. Service in Birmingham began officially on the afternoon of December 29.
Uber was founded by Garrett Camp and Travis Kalanick in San Francisco, California in 2009 and currently operates in 300 cities in 58 countries. It currently operates several types of service in various markets, ranging from the basic "UberX" and "UberXL" ride-sharing using normal passenger automobiles and SUVs, to UberSelect, which uses luxury sedans and UberBLACK which uses comercially-registered livery vehicles. A few cities also have UberPOOL service to share rides with multiple fares or UberTaxi which works with . Birmingham service is expected to be limited to the UberX and UberXL varieties.
Uber's services are coordinated through a smartphone application. Users establish an account with a credit card, which is charged automatically for the fare of each ride on completion. Rates are determined automatically by an algorithm that factors in distance, traffic speed, and overall demand. During periods of unusually heavy demand, Uber charges "surge prices," which can be significantly steeper than regular fares. Users can view other people's reviews and ratings of potential drivers, and are allowed to reject particular offers. Drivers whose ratings dip, or who fail to respond to a certain percentage of requests, may lose access to the service. Likewise, drivers can provide feedback on individual users, which may be factored in to the user's ability to make use of the service.
Uber drivers are considered independent contractors rather than employees, though that definition is disputed by the U.S. Department of Labor. Driver are typically returned 70% to 80% of the fares they handle and are responsible for paying income and self-employment taxes, as well as required federal health insurance premiums or penalties. Since 2014 contracts for new drivers have included an arbitration clause limiting their ability to litigate against the company. Uber performs criminal and driving history checks on applicants, and requires that cars used for the service are recent models and that the driver's personal auto insurance allows using the vehicle in commerce. The company provides supplemental vehicle and liability insurance during the period that the driver is using the application.
The City of Birmingham was slow to approve changes to its law requested by Uber. The city adopted an updated Transportation ordinance on July 29, 2015 which specifically allowed transportation network companies to be licensed, but included regulations, such as requirements for vehicle marks and fleet storage, with which Uber was unwilling to comply. The company lobbied the Council's Transportation Committee and encouraged the public to complain, but did not meet with the city's legal department to address their concerns.
After consultation with Uber representatives and other parties, the Transportation Committee approved a revised ordinance on October 14, but the language was still unsatisfactory to Uber. After further revision and two delays, a version acceptable to Uber was brought to a vote in the Council on December 8. Meanwhile, Mountain Brook passed a ride-sharing ordinance on November 23, Homewood passed their version on December 7, and Trussville passed ride-sharing on December 8.
Against the advice of city lawyers, Birmingham's City Council voted to approve their newly-revised ordinance. The vote was 7-1 with Kim Rafferty abstaining and Valerie Abbott casting the lone vote against it. A late amendment to the ordinance obligates the council to review Uber's compliance after six months. On December 22, city attorneys recommended changes to the ordinance as passed, including a higher fee for a company license and a requirement for individual business licenses for drivers.
Hoover City Council voted unanimously for an updated ordinance allowing ride-sharing on January 19. On April 29, 2016 the Birmingham-Shuttlesworth International Airport began allowing Uber to pick-up and drop off passengers at the airport for a $1 fee.
Uber had operated briefly in Tuscaloosa in 2014, but ceased when it was found in violation of city safety regulations. The Tuscaloosa City Council approved a new ride-sharing ordinance on June 28, 2016 and service resumed on August 19 of that year.
- Bryant, Joseph D. (July 29, 2015) "Birmingham vs. Uber: Council president still open to talking to company after passing new rules Uber calls unfair" The Birmingham News
- Stein, Kelsey (November 10, 2015) "Comment on Birmingham transportation code by Friday; Uber says updates fall short" The Birmingham News
- Stein, Kelsey (November 17, 2015) "[Birmingham officials, Uber collaborate to pave way for ridesharing" The Birmingham News
- Stein, Kelsey (November 24, 2015) "Mountain Brook passes ridesharing ordinance, opens door for Uber" The Birmingham News
- Alexander, Alan (December 8, 2015) "Birmingham City Council opens the road for Uber" Birmingham Business Journal
- Stein, Kelsey (December 8, 2015) "Homewood becomes second Birmingham-area city to approve ridesharing" The Birmingham News
- Stein, Kelsey (December 8, 2015) "Uber planning Birmingham launch after ridesharing ordinance passes" The Birmingham News
- Gray, Jeremy (December 8, 2015) "Trussville approves Uber ridesharing ordinance" The Birmingham News
- Anderson, Jon (January 19, 2016) "Hoover council passes ordinance to allow, regulate Uber and similar companies" HooverSun
- Edgemon, Erin (July 22, 2016) "Birmingham officials want to know: Is Uber working for you?" The Birmingham News
- Poe, Kelly (April 29, 2016) "Uber to start picking up and dropping off at Birmingham airport." The Birmingham News
- Hrynkiw, Ivana (February 22, 2017) "Ride-sharing service Lyft launches in Birmingham at noon Thursday." The Birmingham News
- 2015 Birmingham Transportation Code Ordinance at birminghamalcitycouncil.org