Commission Clarifying Requirements for Nonprofit Taxis

By Beacon Staff

As the Public Service Commission seeks to clarify the distinctions between regulated and exempted taxi services, the operator of The Ride Guy in Whitefish says he hopes regulatory changes aren’t made at the expense of safer roads.

Brian Murchie started The Ride Guy two years ago and his operation has since grown into a popular service for bar patrons looking for a safe ride home. He says his nonprofit business model means he doesn’t need a permit from the Public Service Commission (PSC). As such, he is not subject to the same insurance rates and other requirements as licensed taxi services, which are regulated by the PSC.

But in October the PSC issued a declaratory ruling that clarified the requirements and definitions of unregulated services like The Ride Guy. The ruling came in response to complaints in a couple of cities, including one in Missoula over a similar unlicensed cab operator called Ucallus.

Both Ucallus and The Ride Guy cater to bar crowds with the stated goal of decreasing DUIs. Neither is authorized by the state, wherein lies the rub for some cab operators who are regulated by the PSC and pay the additional expenses that come with regulation.

Based on a PSC investigation, Ucallus was issued two citations for operating without authority. PSC Commissioner Bill Gallagher said The Ride Guy is “on the radar now,” though Murchie says he is not breaking any rules.

“I feel that I don’t need a burden of proof,” Murchie said. “I don’t feel that I’ve done anything wrong.”

Murchie says by law he has 27 months from the time he registered with the Montana secretary of state to fulfill his obligations with the Internal Revenue Service in becoming a 501(c) organization. He says he is still within that timeframe.

“Our intent is very clear,” Murchie said. “The next step would be to file with the IRS.”

The declaratory ruling from October outlined two “safe harbors,” Gallagher said, for passenger motor carrier services to operate without regulation from the PSC. One safe harbor is if a service is not “for-hire,” meaning it “does not assess fees to passengers and whose drivers do not accept tips,” according to the ruling. Services are also exempt if they are a “recognized 501(c) organization under the Internal Revenue Code.”

Gallagher said unregulated taxi providers must prove they meet all the criteria of at least one of the exemption categories. But one challenge, the PSC has discovered, is defining the criteria, particularly in regard to compensation or “remuneration.”

At an upcoming meeting, the PSC will try to address the distinctions between donations, fares and tips. For now, unless they become a 501(c), The Ride Guy and Ucallus are operating in a “gray zone,” according to PSC Chairman Travis Kavulla. Kavulla said he opposed moving forward with the citations against Ucallus.

“I think there’s enough ambiguity in the law that it’s hard to prove that this person committed any kind of offense,” Kavulla said last week.

While the PSC weeds through its regulatory language, Murchie said the primary issue in this discussion should be drunken driving. The Ride Guy focuses its services on Whitefish’s nightlife, providing its own cabs while also driving people’s cars home if they want. It also offers breathalyzers at the bars.

Murchie said his organization has a five-person board and he is the executive director. The Ride Guy does not ask for money, he said, though people pay gratuities if they so choose.

“It’s a free service,” Murchie said. “We tell them it’s a free ride and that’s it.”

Murchie said, considering the widespread concerns in Montana over drunken driving, the state should encourage services like his, rather than make it more difficult for him to operate.

“Go dig up those stats on DUIs – this state is failing,” Murchie said. “Something needs to be done. There are people dying out there. If public safety is their concern, it seems that they should be trying to assist people like us.”

Gallagher said there are regulated cab companies in the area that can be called to keep drunks off the road. In the Flathead Valley, there are four permitted companies regulated by the PSC: Drive4U Taxi Service, Flathead-Glacier Transportation, Winter Sports Inc. and Jim’s Taxi.

“We have regulated services up there,” he said. “It’s not like we’re operating in a vacuum.”

“The PSC doesn’t want more drunk drivers on the road,” he added.

Scott Larkin, a bartender and manager at Whitefish’s Great Northern Bar, says volunteers for The Ride Guy do regular walkthroughs at his business and are well known throughout the community.

“In the end, (The Ride Guy) keeps a lot of people from drunk driving,” Larkin said. “They’ve been great for us.”

Gail Gutsche, a PSC commissioner, said “clearly it’s good policy to have a service that caters to patrons who have had too much to drink and makes sure they’re not behind the wheel.”

“I don’t think there’s any disagreement on that,” she added. “The issue is whether they are all under our regulation. We’ll figure it out. I don’t think it will be too complicated.”