City Hall

Ridesharing Update

Council's taxi committee will vote on new (and improved?) regulations on ridesharing companies, for-hire cars, and cabs in just under two weeks.

By Erica C. Barnett February 17, 2014

PubliCola's ridesharing correspondent was out sick on Friday, so here's a somewhat belated update on the city council's current thinking about how to regulate ridesharing companies like UberX and Lyft, while lifting some regulations on traditional taxis and flat-rate for-hire vehicles. 

The council's taxi committee met Friday morning to discuss the controversial new regulations, drawing hundreds of representatives from people with stakes in the discussion.

Here's a look at the changes the committee seems likely to adopt at its next and final meeting on February 27, followed by a primer on the current, confusing lay of the land. (Skip ahead to the primer if you need some background). 

Hour limits for ridesharing services will likely be lifted.

Initially, wanting to regulate Lyft and UberX in response to cab drivers' complaints that the services were illegal and unfairly cut into their business, the taxi committee proposed new rules that ridesharing services said would put them out of business.

Specifically, the council wanted to create a two-tiered system for ridesharing drivers, limiting "casual" drivers (say, a student who slaps a Lyft pink mustache on the front of her car to pick up some extra cash) to 16 hours a week. Anyone who wanted to drive more than that would have to get the same for-hire driver's license as a cabbie.

On Friday, the committee seemed poised to abandon that two-tiered system, allowing all drivers to work full-time but also requiring all drivers (including casual drivers) to go through a training course that currently lasts two days to get a for-hire driver's license. (The training course might be streamlined to a single day).

That's a big compromise from the original proposal, simultaneously eliminating a limit rideshare companies considered unfair and arbitrary, while increasing requirements on rideshare drivers to the same level required of cabbies. 

Higher caps or no caps at all. 

Additionally, the council had proposed limiting the total number of ridesharing drivers (not cars, but drivers) in the city to 300, at least during the two-year pilot program, a limitation the companies said would make them uncompetitive with taxis and for-hires. (The city complains that the companies refuse to say how many drivers they have). 

"What concerns me is, we don't know how many drivers are out there. How do we flood the market, then, if we don't have the data to support it—and we don't?" Bruce Harrell, an ally of the traditional taxi industry, said. 

Although the committee didn't vote on this issue Friday (they couldn't agree on whether the cap should stay at 300, as in the original legislation, as Harrell proposed, or go as high as 600, as Sally Clark proposed. 

Mayor Ed Murray, charting a third path, said Friday that while he's personally opposed to caps, he would support a "reasonable" 12-month cap while a task force he plans to create takes a closer look at the market. 

$1 million insurance requirement whenever a driver has a ridesharing app turned on.

In a rare moment of unanimity, the committee agreed that ridesharing drivers should have to carry a minimum of $1 million in commercial insurance (in addition to regular car insurance) any time they're logged in to the ridesharing system, not just when they're actively driving a customer.

Both Uber and Lyft say they require $1 million in commercial insurance; the debate (which arose after an UberX driver who was logged in but not carrying a passenger killed a girl in San Francisco) is over whether the companies should be liable for damages caused by drivers who aren't actively driving for them when an accident happens. 

For-hire hails. 

The legislation would allow for-hire vehicle drivers to pick up hails on the street, though it still won't allow them to line up at taxi stands. 

More taxis. 

The whole council seemed to agree that the city, to be fair to the traditional taxi industry, should increase the number of taxi licenses; they still haven't reached consensus about how many new licenses they should issue. The original legislation would add 75 licenses a year for each of the two years of the pilot program (2014 and 2015), for a total of 150; Sally Bagshaw suggested a total of 200 instead. Either way, you're going to be seeing more taxis on the street. 

The deadheading debate reemerges...

The ridesharing debate, interestingly, has reinvigorated longstanding discussions around the issue of "deadheading"—in which taxis licensed in King County can't pick up fares in Seattle, and vice versa, forcing airport drivers, for example, to return solo from Seattle to Sea-Tac. Harrell said "it makes no sense" to have a system that creates enforced deadheading, which reduces drivers' profits, contributes to traffic congestion, and causes environmental harm. 

Harrell suggested that taxis that are licensed in King County but can't pick up fares in Seattle should be given more flexibility to get around those rules. For example, he said, a driver whose cab company had a contract with Microsoft to ferry employees between Microsoft locations should be allowed to drive a Microsoft employee from Redmond to Seattle and pick up another fare on his way back to Redmond.

"We can always monitor to see if the county-only licensees are gaming the system or say that 70 percent of their pickups still have to be outside the city," Harrell said. 

Ironically, given that Harrell has been suspect of the sharing economy, one principle of the movement is to eliminate idle capacity—in other words: a broom that isn't sweeping isn't a broom, which is why people should share resources. In this instance, Harrell is simply copping the rideshare notion that a car that's not getting somebody somewhere isn't a car.

Bagshaw and Nick Licata both objected to Harrell's proposal. "This seems like ... we would be changing the rules of the game in a way that would be unfair to Seattle-only licensed cabs," Licata said. 

Based on Friday's discussion, the council looks unlikely to address the deadheading problem at the city level, and may look at something like regional taxi licenses later on. 

...And race and social justice remains an issue. 

Both Harrell and new council member Kshama Sawant, the council's only two people of color, feel there's a racial element to the new regulations. Most of the traditional ("legacy") cab drivers in the city are immigrants who saved up the money to buy a cab license in the existing (very expensive) system; Uber and Lyft, in contrast, are multi-million-dolllar corporations that just entered the market in the last few years. 

"I think there is an implication [in the legislation legalizing rideshares] that [taxi drivers] are not being responsive to complaints and we need corporate giants to swoop down and enter the system," Sawant said. "We have to be aware that when we are talking about creating a level playing field, drivers in the legacy system are starting from a very low point and it is the duty of the council to consider that."

And a primer.

If you aren't already familiar with how all these services work, or want a refresher, here's the way things currently stand. The council debate has been over three basic types of services:

• Ridesharing services like Lyft and UberX (which the council refers to as "transportation network companies," or TNCs), which allow users to summon and pay for a ride via smartphone app, with no cash transaction involved.

Supporters say companies like Lyft create a frictionless, high-tech option for people to get a ride without waiting indefinitely for a cab to go by (or show up), and that they give drivers an extra source of income using cars they already own.

Detractors say the companies are currently unregulated, complain that they won't provide the city basic information on how many people they employ, and say they create unfair competition with the existing heavily regulated taxi and for-hire industries. Those companies, as Mike O'Brien pointed out last month, are required by law to pick up everyone, including the grandmother who needs to go to the hospital and the person who only carries cash. 

• Taxis, which are licensed either by the city or the county (or both). Under existing legal limits, there are 336 city-only taxi licenses (meaning that drivers of those cars can only pick up fares in Seattle), plus another 352 joint city-county licenses (whose drivers can pick up anywhere in King County, including Seattle). In addition, King County has issued 240 licenses to cars whose drivers can only pick up fares in King County but outside Seattle—primarily airport drivers.

Taxi drivers can share cars, as long as they have for-hire licenses (a higher license level than a regular driver's license that requires a two-day course and special certification). As in other cities, because there are so few available licenses, licenses can be bid up into the hundreds of thousands of dollars. 

• For-hire or flat-rate vehicles, which are required to pre-arrange rides over the phone and aren't supposed to pick up fares on the street. (They're distinguished from taxis visually by their colors—each has to be two colors, and can't be yellow—hence their third name, "two-tone" vehicles.) For-hire vehicles can be licensed by both the city and the county or just the county (but aren't allowed to line up at airport and hotel queues.) There are 198 dual-licensed for-hire vehicles in Seattle and King County, and another 170 that are licensed in King County alone; for-hire drivers can share cars just like taxi drivers do. 

In addition, there are services like limos, which are outside the city and county's jurisdiction (they're regulated by the state) and carsharing companies like Car2Go and Zipcar, which users drive themselves. Another model works like AirBnb, only for cars, where people rent out their cars.

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