$6,500 fine for being an Lyft Driver

lyft $6,500 fineLyft and Uber are rideshare services that allow individuals who have a car and some free time to give people who have some cash and need a ride, a ride.  Over the past year there has been a lot of issues with this in big cities as taxi services are angered by competition and as governments want to control transportation and human interactions.


The Safety Issue:

Some government agencies claim that it is for the safety of potential passengers that they are cracking down on rideshare programs.  It is worth noting that Lyft and Uber run background checks and driving records on people who sign up as drivers, who have to provide their real names and drivers licenses. The companies’ also provide $1 million of insurance.

Other Government Limitations:

In New York City, the total number of cabs “allowed” is set by the city.  In order to operate a cab you must buy a medallion from the city or another cab driver. These cost about $1 million in cash.  Yeah, $1 million. Because of this official cabs are burdened with a huge expense that takes years to pay off, this is an unfair disadvantage that traditional cab drivers have. Uber and Lyft drivers do not pay for a medallion.  Because of this I can certainly understand the frustration of local cab drivers when they have to pay large sums of money in order to operate a business that a competitor or group of competitors does not.

The Fine in question:

A Lyft driver in Salt Lake City was given a $6,500 ticket for providing a ride to someone.  Let’s think about this for a minute. One consenting adult asked another consenting adult for a car ride and they engaged in a transaction with each other.  How in the world is this a crime, much less a crime that deserves a fee that could buy a decent car? According to The Salt Lake Tribune the city is effectively setting up sting operations in order to issue these fines. The government officials sign up on Lyft or Uber and ask for a ride.  When someone shows up to help them, they get a life changing ticket. A $100 ticket would act as a deterrent. A $250 ticket would most likely ensure that they stopped using the program completely.  A $6,500 ticket is designed to cripple someone financially.  

Excessive Punishment:

I have encountered some crazy fines for stupid “offenses” (not crimes), but this is by far the most egregious.

In Benton Harbor, MI having a vehicle in your driveway that is not road legal is a misdemeanor offense punishable by a $500 fine and up to 90 days in jail.  Several years ago we had bought a replacement vehicle for a car that was on its last legs. We had switched over the plates from our old vehicle to the new vehicle and were going to take the old one to the scrap yard that day, which was about a mile down the road.  The ordinance officer stopped by gave my wife a ticket for $500, which at the time was a devastating amount of money to us, hell $500 was way more than that car was worth.  He told us if we got it legal that day he would throw it out in court, which we did, and he did not do. They told Mrs. C. that if she admitted “guilt” they would drop the fine to $250 and there would be no jail time. She took the deal out of fear that she could be put in jail for 3 months.

In St. Joseph Township I had been working long hours and the lawn got a bit out of control. It was about 8 inches in height.  I mowed the lawn and then checked my mailbox. Wouldn’t you know that St. Joseph township in Michigan will also issue a $500 fine and up to 90 days in jail on a misdemeanor offense for having grass over 6″ in height? I was able to take pictures and get them to not give me a citation. A couple years later they dropped this violation to a civil infraction with a $150 fine.  Much more reasonable.

Both of these examples are crazy.  The fines do not fit the “offenses”.  These fines are enacted for one of two reasons; fundraising or control. They do not exist as a matter of punishment for harming society or harming others.  I hope that all of the Salt Lake City Lyft and Uber drivers who have been entrapped by this city with this egregious fine challenge it in court.

Knowing that some government entities are issuing fines of this magnitude, would you consider being a Lyft or Uber driver to make some extra cash?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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