At least 10 drivers for Uber or Lyft were caught on video agreeing to illegal passenger pickups at the Las Vegas Convention Center during the recent MAGIC show.
Video footage of the illegal trips, recorded by a private investigator, is expected to be presented at the Nevada Transportation Authority’s March 24 meeting, authority attorney James Day said Monday.
Agreeing to take a customer on the spot, rather than booking through an app, is called an off-platform transaction. It’s illegal, and the practice denies Lyft and Uber their cut of the fares. Off-platform rides also create a safety issue — cash customers aren’t covered by Uber or Lyft driver insurance.
Yet on Feb. 18 — the last day of the Men’s Apparel Guild in California convention at the Las Vegas Convention Center — a private investigator took seven off-platform rides with different Uber and Lyft drivers, paying $20 cash for a trip from the convention center to Wynn Las Vegas. Eight drivers were implicated, however, because one said he would take the undercover agent if his scheduled passenger didn’t show up. That driver passed the PI on to another driver who made the run for cash.
The night before, there were two more illegal rides, for a total of 10.
Private investigator David DuCharme, of The DuCharme Agency, documented every ride with a report and a cellphone video showing everything from the initial solicitation to the dropoff. The undercover operation was financed by Brent Bell, president of Bell Transportation, which operates Whittlesea Blue and Henderson Cab companies.
The undercover operation is the latest volley in the battle between taxicab companies and transportation network companies that use a cellphone application to match people needing rides to contracted drivers using their own vehicles.
The fare is automatically billed to the passenger’s credit card on file with the ride-hailing company. Drivers typically get 75 percent or 80 percent of the total fare, with the rest going to the companies.
The Nevada Transportation Authority requires customers to request a ride using the app. The authority recently began hiring more officers to monitor ride-hail drivers.
Cabdrivers complained that Uber and Lyft contractors were soliciting people waiting in the convention center taxi line. The wait time for a cab was about 40 minutes as the show came to a close, Bell said.
Bell said cabdrivers stopped picking up customers at the convention after hearing that Uber and Lyft contractors were stealing customers from the cab line.
Representatives of Uber and Lyft say they will cooperate with regulators any way they can because they recognize the practice as illegal — and besides, they’re losing money with each transaction.
Taylor Patterson, a spokeswoman for Uber, said drivers accused of operating off-platform are immediately removed and can be returned only after an investigation is completed.
On Feb. 17, the first night of their investigation, Eric DuCharme said he and his son, David, found only two violators at the south end of the convention center. Uniformed officers in the area, either from the convention center or from a regulatory agency, apparently deterred illegal activity, he said. With no security at the north side of the center the following day, Eric DuCharme said, cash rides “occurred one after another.”
He said about half of the drivers solicited over the two days rebuffed efforts to skirt the app.
In the videos produced by the agency, David DuCharme is seen waiting for a driver with an Uber or Lyft sticker on the windshield to drop off a customer. He then approached to ask, “Can you take me to the Wynn?”
If told he had to use the app, DuCharme said he had lost his cellphone and credit cards, but could pay cash.
It seldom took much persuasion. DuCharme would give the driver a $20 bill, and they would head out for the resort.
DuCharme also tried to arrange later off-the-app trips to strip clubs. Most of the drivers agreed, but some said they weren’t planning to work that late. Some offered a free ride because they would get cash kickbacks from a strip club.
One driver even agreed to take DuCharme and his friends to Nye County brothels for $40 per person.
Terry Jicinsky, vice president of operations for the Las Vegas Convention and Visitors Authority, said ride-hailing companies have only been a part of the convention center scene for a few months and that everybody is still learning what will and won’t work in transportation management.
The Nevada Transportation Authority, which regulates ride-hailing companies, did catch one off-app driver during the MAGIC show and is aware of the undercover videos.
“The taxicab industry in Clark County recently shared information … relating to alleged ‘off-app’ activity,” Day, the authority attorney, said in an email. Both regulatory agencies are investigating, he said.
Day said the authority welcomes enforcement tips from the “regulated community and the general public.” He called limousine, bus and taxicab drivers “a tremendous resource for first-hand observations of suspicious or unlawful activity.”
Representatives of the Taxicab Authority did not return calls seeking comment.
Cab company owners also said they are suspicious about ride solicitation in McCarran International Airport baggage claim areas. A McCarran spokesman said airport officials are watching for the activity, which violates several policies in the airport’s agreement with ride-hailing companies.
Violators can be cited for trespass, evicted from the property and fined, with escalating fines based on repeat offenses.
The Clark County Commission today will consider boosting those fines from $150 on the first offense to $300.
Contact reporter Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Find @RickVelotta on Twitter.