Politics & Government

Uber to pull out of Kansas after Legislature overrides Brownback’s veto

Joel Gutierrez, a Wichita-area Uber driver, takes passengers to their destination.
Joel Gutierrez, a Wichita-area Uber driver, takes passengers to their destination. File photo

TOPEKA – Uber says it’s over.

The company announced it was calling it quits in the Sunflower State on Tuesday moments before the Legislature took its final vote to override Gov. Sam Brownback’s veto of new regulations for ride-hailing services.

“Uber has ceased operations throughout the state,” said Uber spokeswoman Lauren Altmin in a statement. “We’re saddened by the loss of hundreds of jobs, safe rides and transportation choice for consumers in Kansas.”

Altmin sent the statement after the Kansas Senate voted 34-5 to override Brownback’s veto, but before the House voted. The House voted 96-25 about 10 minutes later.

“Before the vote started, I checked the (Uber) app and they said they’d pulled out of Kansas already,” said Rep. Steve Anthimides, R-Wichita. “So our vote at that point was moot in the House.”

But some lawmakers voiced confidence that the national company would return and said they were willing to work on a compromise.

Senate President Susan Wagle, R-Wichita, called Uber’s announcement “pure political theatre.”

“The Legislature has not taken any action preventing them from operating. They have a consistent pattern of irrational behavior, and this is just the latest example,” she said in an e-mail. “I love their product, and I use it quite frequently. I’m very confident we’ll find compromise, and today’s action only continues the process. In the meantime, it’s shameful for Uber to use their drivers and consumers as political pawns.”

The override vote is a major setback for Brownback, who cited concerns about overregulating an emerging industry when he vetoed the bill last month. Within days of the veto, Uber announced it was expanding into four new markets in Kansas.

“As I said when I vetoed this bill, Kansas should be known as a state that welcomes and embraces innovation and the economic growth that comes with it,” Brownback said. “Over-regulation of businesses discourages investment and harms the open and free marketplace.”

Uber and similar services use smartphone apps to link people wanting a ride to private drivers who are willing to drive them. The passengers pay a fee to the ride-sharing service, which in turn pays the drivers.

SB 117 mandates that companies certify that drivers have comprehensive and collision insurance on their cars. In addition, it requires drivers to undergo a Kansas Bureau of Investigation background check.

Uber contends that the insurance is unnecessary and that it does its own background checks on drivers.

‘No protections’

Rep. Scott Schwab, R-Olathe, one of the bill’s primary backers, said the issue is not just about Uber.

“I think the governor’s veto was about Uber. For us it’s not,” Schwab said. “For us it’s the next player that comes in to do a transportation network and doesn’t do a background check and then all of a sudden we’ve got a couple of 21-year-old girls that were hoping to get a safe ride home and that just went missing.”

“There’s no protections,” he continued. “And we’re not asking for much. I mean in Colorado next to us they go through their bureau of investigation and Uber didn’t leave there.”

Rep. Les Osterman, R-Wichita, voted for the override, saying he felt the background check provision was vital to riders’ security.

“I wanted to make sure when one of my people gets in that car that they weren’t getting in there with some kind of people who weren’t right,” he said.

Schwab also said there’s a gap in insurance. When drivers have a fare they are covered under Uber’s insurance, but when they have on the app and are looking for the fare they do not have the same coverage.

“This is a new marketplace and we have to make sure just like everybody else on the road they have protections,” Schwab said.

This provision, which was strongly backed by the Kansas Bankers Association, means that lenders won’t be left uncompensated if a driver gets in an accident.

Sen. Jake LaTurner, R-Pittsburg, opposes the bill and sought unsuccessfully to postpone the Senate vote until next week.

“I think big regulation won in Kansas today,” he said. “I think that Kansas ought to be a state that supports innovation. Uber certainly is that.”

Locked out

Rep. Joe Seiwert, R-Pretty Prairie, also voted against overriding the veto and in favor of Uber.

“I wanted to keep them,” Seiwert said. “It’s a good opportunity for us to be supportive of a new business.”

He said a number of constituents had said they wanted to keep Uber on the road.

But he said he suspected an Uber pullout was in the works before the veto vote.

He said he tried to arrange a pickup for a friend at the Wichita airport on Sunday. Although there was a price listed, $18, he got a message from Uber saying the company did not serve Wichita.

“A friend of mine had to go pick them up at night and drive 60 miles,” he said.

Joel Gutierrez, an Uber driver from Wichita, said drivers were locked out of the app shortly after the Senate vote without warning. He said the company had sent e-mails saying that if the bill became law, it would leave Kansas, “but they didn’t say we’re just going to shut you down.”

Gutierrez, who has been driving for Uber for seven months, blames the company for the situation. He called the new regulations reasonable, explaining that many Uber drivers do not realize they could be part of a crash and not be covered by their insurance.

“The Legislature created a bill that actually makes sense,” he said, adding that it would have assured both drivers’ and passengers’ safety.

“Uber only covered the passenger. If the passenger got hurt, Uber would pay for them. But they would not pay for you or your vehicle. That would have to go on your insurance,” Gutierrez said. “Well, if your insurance didn’t know that you were driving for Uber, they’d be like, OK, nope, we’re not paying for your vehicle, we’re dropping you.”

Guiterrez says he plans to start his own ride-share company, Rebu Rides – or Uber spelled backwards.

“If Uber wants to throw a fit, we’re going to try to fill the gap,” he said.

Time for compromise?

The veto override means that the bill will become law July 1. Sen. Jeff Longbine, R-Emporia, who carried the override motion in the Senate, said there is still time to pass a second bill this session if the various stakeholders can come to a compromise.

“We have ample opportunity in the remainder of the session, if the parties are willing to come together and sit down and work out a real compromise. I’m more than willing to do that. And we’ll run the bill before the end of the session,” he said.

Wagle noted that it’s rare for the Legislature to achieve a bipartisan measure of this size, and she pushed back on Uber’s claim that lawmakers were being anti-business.

“I don’t think you’ll find a more business friendly legislature anywhere in the country,” Wagle said. “We’re not being unreasonable in Kansas, and their bullying tactics will obviously not work here.”

How they voted

Most south-central Kansas lawmakers voted with the majorities to override the governor’s veto of SB 117, which will regulate ride-hailing services such as Uber. The Senate vote was 34-5 and the House vote was 96-25.

These area Republicans voted against the override: Sen. Michael O’Donnell, Wichita; Reps. Steve Brunk and John Whitmer, Wichita; Blake Carpenter, Derby; Pete DeGraaf, Mulvane; Steve Huebert, Valley Center; Kasha Kelley, Arkansas City; Marc Rhoades, Newton; Don Schroeder, Hesston; Joe Seiwert, Pretty Prairie; Jack Thimesch, Cunningham.

Republican Mark Kahrs and Democrat Brandon Whipple were absent.

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