City Hall

Council's Taxi Committee Considers Legislation to Restrict Ridesharing

The city council's taxi committee considered legislation today that would restrict ridesharing companies to 100 cars, and drivers to 16 hours a week.

By Erica C. Barnett December 13, 2013

The Seattle City Council's taxi committee got an earful from taxi advocates and advocates for ridesharing services like Lyft and UberX, this morning, after a long discussion of new rules that would significantly restrict ridesharing. Lyft and UberX—services that allow users to summon a driver via smartphone app—are technically illegal in Seattle, but are thriving, as the proliferation of pink-mustached Lyft cars attests.

The legislation the council is considering would have several major impacts on existing ridesharing services. First, and most significantly, it would limit the number of vehicles in each TNC to 100—a change that, according to Lyft co-founder John Zimmer, would "basically shut us down."

The 100-car limit, Zimmer tells PubliCola, "would be a fraction of what we do now, and there’s more demand than we can handle with our existing drivers," of which he says there are "several hundred. "Our drivers typically are less than 10 hours a week, but if you just use 10 hours and multiply by 100 and compare that to the number of hours taxi drivers [drive], it would be half a percent." For customers, the limitation would mean fewer available cars, and, likely, longer waits.

Second, the new rules would require ridesharing companies to pay for a minimum of a million dollars in insurance on their drivers, a requirement that would apply any time a vehicle owner is driving a customer, headed to meet a customer, or any time they so much as turn on the ridesharing app.  

Beyond the 100-car restriction and the million-dollar insurance requirement, the proposal would require anyone licensed to drive a ridesharing car to get either a special TNC permit, which would require them to take a driver safety course, pass a test, and go through a background check, or a For-Hire Driver license, a more onerous process that requires a more extensive, multi-day training. Drivers who only have a TNC permit could only drive 16 hours a week; taxi drivers can drive unlimited hours.

At the same time, under the new rules, the city would issue 50 new taxi licenses by lottery.  

Taxi drivers, who currently must share a limited number of licenses and obtain a special driving permit, argue that ridesharing companies represent unfair competition because they aren't regulated. And they argue that the new rules won't subject rideshare drivers to the same scrutiny as taxi drivers.

"The core of our concerns has always been [creating] a level playing field," Dawn Gearhart, a representative of Teamsters Local 117, which represents taxi drivers, said at this morning's meeting Gearhart argued that the city should require ridesharing services, or "transportation network companies (TNCs)," to buy the same insurance policies typically bought by taxi drivers, who purchase extra liability insurance (on top of the $300,000 policy they're required to buy, and the million-dollar policies Gearhart said they typically buy). That extra personal insurance, Gearhart said, costs a typical cab driver $8,000 a year.

On the other side, ridesharing advocates argued that limiting the number of ridesharing licenses and restricting the number of hours rideshare drivers could operate would stifle an innovative industry that takes cars off the road and gives people the ability to live without a car or at least drive less. 

ChrisTiana Obey, a Lyft customer who wore a pink mustache pin on her lapel, said she has a medical condition that makes it impossible for her to get a license; ridesharing, she said, allows her to get around. Obey gave the council a petition with 1,700 names of ridesharing supporters. 

Council member Bruce Harrell, the council's most vocal taxi industry advocate, was unmoved by ridesharing supporters' pleas. In fact, he suggested several provisions that would restrict the new industry even further, including a proposal to restrict the total number of ridesharing companies in the city (currently, there are three, two of them active).  

 "Why wouldn't we limit the number of TNCs?" Harrell asked rhetorically. "We are trying to limit supply. That is the policy choice we've made. I don't see any ambiguity in that." 

Council member Mike O'Brien was skeptical of Harrell's proposal to effectively shut the door on new ridesharing companies. "I would like to keep the market flexible enough so that those with new ideas could come into the market," O'Brien said. "I guess I'm questioning whether, going forward, [limiting the number of companies] makes sense or not." 

And Harrell suggested that it wasn't fair to allow ridesharing cars to be 10 years old, while restricting taxis to those that are less than seven years old. (The rationale was that taxis, which are driven by multiple people, are more heavily used than private cars.) "You can have a seven-year car with low miles that's in great shape and you can have a six-year model with a zillion miles that's in terrible shape," Harrell said (prompting council president Sally Clark to quip, "My 1966 Volvo only shows five digits on the odometer.")

In a statement, Uber Seattle general manager Brooke Steger said, “The committee has already heard from over 12,000 users of the Uber app who would be outraged to see their transportation options diminished. Arbitrarily limiting the number of drivers that can use the Uber app to 100, and the number of hours they can drive to 16 a week, hurts all Seattleites.”

“It will also reduce supply in traditionally underserved communities, a problem we’ve seen with the current system.”

For his part, Zimmer seemed flabbergasted at the Seattle council's proposals to restrict the number of ridesharing cars on the streets. In Lyft's 18 other markets, he says, the company has been asked to accept new safety standards, criminal background checks, and insurance requirements; but nowhere but Seattle, he says, have they been restricted to a certain number of cars or hours per week. "This is shocking on so many levels," Zimmer says. "This is Seattle. I can't figure it out." 


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