Live: Seattle City Council discusses controversial proposed ride-sharing regulations

IMG_4462We’re settled in here at City Hall as members of the Seattle City Council prepare to discuss proposed regulations for ride-sharing startups, which have angered companies like Sidecar, Lyft and Uber.

Representatives from the taxi and for-hire industries speak with Councilmember Bruce Harrell after Friday's meeting.

Representatives from the taxi and for-hire industries speak with Councilmember Bruce Harrell after Friday’s meeting.

The draft ordinance would require ride-sharing companies, among a bevy of other rules, to obtain a $50,000 annual license to operate as a transportation network company, and have no more than 100 vehicles driving a maximum of 16 hours per week — limits that Uber says “hurts all Seattleites.”

California dealt with the same issue a few month ago, when the California Public Utilities Commission voted unanimously to legalize ride-sharing. The state did not enforce limits on number of vehicles or hours driven ultimately allowing the startups to operate.

Currently, the ride-sharing companies are driving around Seattle illegally since they’re not yet regulated by government. This has angered taxi companies, who are losing business.

Follow along with our live updates below, and feel free to comment with your thoughts:

Todd Bishop 12/13/201311:42 am

That’s a wrap. Thanks for tuning in. We’ll continue to follow this issue closely on GeekWire.

Todd Bishop 12/13/201311:37 am

The next speaker speaks out against the city supporting “San Francisco-based, Wall Street-supported entities” and asks for a cease-and-desist order to be sent today.

Todd Bishop 12/13/201311:35 am

The next speaker says the transportation network companies (Lyft, Sidecar, Uberx) need to increase their transparency dramatically, on questions such as how many drivers they currently have. Says it’s unwise to introduce “part-time, casual drivers” into the market, and that we need professional drivers.

Todd Bishop 12/13/201311:32 am

The next speaker is one of the owners of CNG For Hire. These TNC companies come from out of state, come to this state, and have been operating for close to two year illegally, he says. The city has looked the other way, and has done nothing about it, and is now entertaining the idea of legalizing them. That is going to put for-hire companies out of business and the public at risk.

A U.S. Army veteran, he says this doesn’t represent what he fought for. Giving these companies a business opportunity is immoral, he says, to loud cheers from the audience.

Todd Bishop 12/13/201311:27 am

I’m jumping in for Taylor — his battery is running low. Next speaker asks council to stop deregulating for-hire vehicles, saying it will create more problems for the taxi industry.

Todd Bishop 12/13/201311:25 am

Next speaker identifies himself as founder and chairman of Somali-American Public Affairs Council, speaks in defense of immigrants who work in the taxi industry, and the need to protect them from ‘unfair competition.’

Taylor Soper 12/13/201311:23 am

Cab driver: “Let’s just level the playing field.”

Taylor Soper 12/13/201311:18 am

Henry Yates, who represents for-hire companies, just said Uber is the “Wal-Mart of the professional transportation system.” Really?

Taylor Soper 12/13/201311:17 am

Steve Humphreys, CEO of FlyWheel, which works with Eastside For-Hire, talks in support of technology, but for “professional drivers.” He agrees with limited time and duration for TNCs.

Taylor Soper 12/13/201311:09 am

First speaker, who says she’t get a license and relies on ride-sharing to get around, brings poster with 1,700 signature petitioning regulations: http://www.geekwire.com/2013/ridesharing-fans-petition-seattle-council-reconsider-proposed-regulations/

Taylor Soper 12/13/201311:05 am

Time to hear from the public. Oh boy.

Taylor Soper 12/13/201311:02 am

Sally Clark reminds everyone here that the Council is trying to figure out how to support innovation. But, she notes, the TNCs are illegal, despite being popular with consumers. “We’re trying to figure out how to make this work,” she says.

Taylor Soper 12/13/201310:54 am

We’re hearing about additional proposals not on current ordinance. First: allowing for-hire vehicles to pick up hailing passengers. Currently, only a “taxi” can pick someone up on the street who waves them down. Changing this would mean 200 more for-hire vehicles could now pick up anyone on the street, increasing options for customers, Council says.

Taylor Soper 12/13/201310:46 am

Now talking about lotteries and extra taxi licenses. Current law states that the city can only issue 35 taxi licenses in a single year. Proposed ordinance recommends issuing 50 licenses by lottery.

Taylor Soper 12/13/201310:44 am

Council talking about other cities and what they’ve done. Again, California led the way here with fewer regulations than proposed by Seattle.

Taylor Soper 12/13/201310:40 am

Noble: “We are offering a financial incentive to focus on busy times.” Remember, Council proposed a 16-hour per week limit for TNCs.

Taylor Soper 12/13/201310:39 am

Council running through bullet points that you can see at the bottom of this story: http://www.geekwire.com/2013/sidecar-uber-express-disappointment-seattles-proposed-ridesharing-regulations/

Taylor Soper 12/13/201310:32 am

So, city needs that $50K from each startup to cover costs of people to manage this new regulatory system.

Taylor Soper 12/13/201310:31 am

Now talking about TNC fees: $50,000 per year for TNC license (or 0.35% of revenue, whichever is higher) to offset the anticipated 2-3 FTEs required to administer and oversee program.

Taylor Soper 12/13/201310:30 am

Someone just brought in a big poster with a bunch of signatures. Looks like this petition: http://www.geekwire.com/2013/ridesharing-fans-petition-seattle-council-reconsider-proposed-regulations/

Taylor Soper 12/13/201310:29 am

Clark again talks about the balloons in the room, makes joke.

Taylor Soper 12/13/201310:28 am

We also spoke with Lyft co-founder John Zimmer this morning: http://www.geekwire.com/2013/lyft-zimmer/

Taylor Soper 12/13/201310:27 am

You can watch the Council live here: http://www.seattle.gov/council/councillive.htm

Taylor Soper 12/13/201310:27 am

This room is super packed. No open seats. I can sense the emotions of these people…very strong feelings about this. We’ll hear from the public soon.

Taylor Soper 12/13/201310:25 am

Sally Clark has made a few “funny” comments already. Seems like she wants to keep the mood light.

Taylor Soper 12/13/201310:21 am

Council keeps referencing California’s rules, which are less restrictive than Seattle’s proposed ordinance. Interesting to see how much they’ve differed from that, even though it seems to be working fine in California.

Taylor Soper 12/13/201310:19 am

Still on insurance. Council is discussing when TNC drivers should be insured — when they’re driving people around, when they’re driving to pick someone up, or when they’re driving around looking for business. Three different scenarios.

Todd Bishop 12/13/201310:18 am

Does Sally Clark get all of her information on industry trends from an unnamed reporter? Weird how often she is citing this person, whoever it is. (Not us!)

Todd Bishop 12/13/201310:15 am

Watching on the live stream, it’s easy to see why this discussion is frustrating to the ride-sharing companies.

The council committee’s discussion of the nuances of the proposed regulations seems to be missing the larger question of the proper role of government in these types of industries. Is the city truly protecting its citizens and its own legal liability with these rules, or is it protecting the interests of an established industry that would otherwise be disrupted by new technology?

Taylor Soper 12/13/201310:13 am

City staffer Ben Noble jumps in, asks about TNCs and how they have individual drivers with different driving histories. TNCs are more individual-based vs. taxi companies, which have dictated insurance for each car.

Taylor Soper 12/13/201310:10 am

The insurance topic is very important to the Council. It’s complicated.

Taylor Soper 12/13/201310:08 am

“Insurance structure from ride-sharing companies is very different. They are bringing to the market a different approach to insurance. Maybe it’s more efficient, maybe it works better.”

Taylor Soper 12/13/201310:04 am

Council will bring insurance experts next month to discuss how insurance requirements will work with ride-sharing companies.

Taylor Soper 12/13/20139:58 am

Talking about not having cash in taxis (no cash transactions for Lyft, Sidecar, Uber) and potential robberies that can occur. Draws chuckles from taxi drivers here.

Taylor Soper 12/13/20139:57 am

They’re talking about limiting the number of TNCs and entrants into the market. Harrell seems to want to have a set # allowed.

Taylor Soper 12/13/20139:55 am

Harrell: “Are we limiting supply? We are. That’s the policy choice we’ve made.”

Taylor Soper 12/13/20139:55 am

Clark; “The deterioration of the taxi world is something that I don’t think we’re interested in.”

Taylor Soper 12/13/20139:52 am

“It’s all about the number of cars out there” — Harrell

Taylor Soper 12/13/20139:51 am

Harrell talking about limiting not only the # of cars, but how many TNCs are allowed in Seattle.

Taylor Soper 12/13/20139:50 am

Now talking about keeping companies from “gaming” the system with multiple apps for one company. Ex: “Lyft 1,” “Lyft 2,” “Lyft 3,” etc.

Taylor Soper 12/13/20139:47 am

The 100 car limit was put in place “to begin in a guarded way.”

Todd Bishop 12/13/20139:46 am

For more perspective from the ride-sharing companies, see Taylor’s interview this morning with the co-founder of Lyft: http://www.geekwire.com/2013/lyft-zimmer/

Taylor Soper 12/13/20139:43 am

Here’s the draft ordinance: http://clerk.seattle.gov/public/meetingrecords/2013/taxi20131213_1a.pdf

Taylor Soper 12/13/20139:42 am

Clark says there’s some misinformation about the draft regulations that she hopes can be cleared up in the hearing.

Taylor Soper 12/13/20139:42 am

Taylor Soper 12/13/20139:41 am

Taylor Soper 12/13/20139:40 am

A Lyft rep is handing out small mustaches to people here while the Council speaks.

Taylor Soper 12/13/20139:39 am

Follow along with the livestream here: http://www.seattle.gov/council/councillive.htm

Taylor Soper 12/13/20139:34 am

30 minutes of public comment at the end of the meeting. No way everyone gets to speak, but Sally Clark says this is just the “initial walkthrough.”

Taylor Soper 12/13/20139:33 am

OK, Taylor here, Just about ready to go. Pretty packed here. TONS of people signing up to speak. I’ll try to update as much as I can.

  • Aaron Bird

    Harrell: “Are we limiting supply? We are. That’s the policy choice we’ve made.”

    Why would you limit supply? In a market like transportation, that by definition will limit demand. We need MORE transportation options, let LESS. The only valid reason to limit supply is to prevent price decreases that hurt the businesses. That is best done by fixing price and letting the market decide on supply and demand (and which service providers are the best suited to fit the customer’s needs). That is as far as the regulation should go, is by fixing price.

    The cab companies are getting less business, because their service sucks and they don’t deliver it the way people want to use it.

    The overall spend on third party transportation is up b/c of Uber and the like. This means more money for local businesses, more tax dollars, and happier customers. Sounds horrible, we should choke this with regulation! What?

    If cabbies want more business, they should sign up for Uber.

    • That Guy

      If Uber wants to be in the taxi business, it can play by the same rules as the existing companies, or it can take its smug techno-geek ass out of this city and stay out.

    • curtwoodward

      This is an interesting point, but I think you’re missing some public policy points that could be reasonably considered valid reasons for limiting supply.
      If a very, very environmentally conscious city like Seattle wants to cut car trips and encourage more transit, walking, biking, etc., then limiting the supply of individual cars on the road – including for-hire cars – is a reasonable reaction.
      Wanting to ensure that the drivers, who are already often pressed to make the nut on their daily expenses of even getting in the cab, can make a decent living that keeps them off of public services also is a valid reason to limit supply.
      Same goes for wanting to reduce traffic congestion and raw numbers of cars on the road, which goes along with the first point – Seattle is (way too) reliant on buses for its transit, and buses suck even more when they’re stuck in traffic behind cars.
      You might also add the ability for the city to effectively keep tabs on the driving/criminal/performance/insurance records of the drivers as a reasonable justification for wanting to have some kind of limit to cars on the road.

      • That Guy

        The techno yuppies of Seattle prefer it if their cab drivers are slaves making next to nothing.

  • VAharleywitch

    Why doesn’t Seattle just support “Slugging”??

    It’s been working great in the DC area for commuting during the work week for almost 40 years!

  • Eric LeVine

    This sucks. Seattle is worse than most third world countries when it comes to Taxi service. Clueless drivers who get lost. Waits of an hour or longer to get a ride if you call from the hinterlands (e.g. Queen Anne). It is pathetic that the city council would want to rein in companies like UBER who are solving the problem. I can’t wait to see how soon they attack Car2Go as well.

    • That Guy

      Translation: Another techno-geek wants to order up a white driver with his smartphone, even if that driver is uninsured.

      • Eric LeVine

        That’s a disgusting comment. Why would you play the race card?

        • That Guy

          Um … because it’s true.

          • RileyDeWiley

            I am looking for the ‘White Driver’ button in my Uber app. I don’t see one.

          • That Guy

            They’re a little subtler than that. Not much, but a little. They also redline out poorer customers by refusing to take cash.

  • Mariah Olson

    Absolutely ridiculous they didn’t let any representatives of the ridesharing companies speak. There is so much misinformation among those drivers. and it seriously affecting the arguments for and against this ordinance.

    I agree that the playing field should be leveled, but all indications are that we aren’t meeting the current demand yet. Artificial limits on supply that are not based on any demand research are going to reverse the improvements in service that have come about with the addition of rideshare in Seattle.

    • That Guy

      There is a good argument for looking carefully at the supply-demand numbers. And if Lyft, Uber, and Sidecar will play by the same regulatory rules at the existing cab companies, I’m all for them. But they need to drop their smug, sanctimonious demands to be exempt from taxi regulations simply because you can order a car from a smart phone.

      I am especially concerned about the insurance issue. Their drivers do not have commercial taxi insurance, which means that their passengers, other drivers, and bystanders are unprotected for the results of crashes. The companies put it all on their drivers, who then put it all on their passengers and others. That state of affairs has to stop immediately.

      Being a techno-geek does not confer immunity from the rules, no matter how much the geeks think it does. If Lyft, Sidecar, and Uber won’t play by the rules, then they can get out of Seattle and stay out.

      • NewAgeMeMe

        I’m surprised that such a liberal town wants to take such a libertarian approach to solving this issue, in other words, just let unregulated companies come in and serve the market and the market may arrive at some kind of self-regulated solution if it demands it. And by demands it, I really mean if people start dying or tax payers are forced to pay for medical bills of customers who ride in cars ran by uninsured businesses.

        • That Guy

          I don’t think Seattle will go that route. You’ve got a bunch of trendy techno-yuppies who want it that way, but I don’t think they’ll get their way.

      • mayaeyah

        The problem is that current taxi regulations are heavy-handed and outdated. One doesn’t have to be a “techno geek” to simply benefit from and prefer the improvement technology has conferred to the taxi business via these ridesharing companies. Yes. yes, license and insure properly and equally to other businesses, but the explosion of these services has clearly demonstrated that there is a demand not currently being met by the current system.
        In addition, the app functionality provides a reliability, accountability, and a customer service component that were also not being provided in the current system. One of the for-hire owners actually touted 90% pickup rate for ordered cars as something to be proud of, like it’s ok that a full 10% of customers ordered a car that never came?
        There is no good reason for this protectionist attitude toward a business model that is not working well demonstrated by the fact that other people have shown how to do it better. Taxi companies can learn how to innovate and compete, or quit their business and go work for Uber, as most of the drivers I’ve had have already done.

        • That Guy

          As long as the new competitors follow the same rules as the established operators, fine. As for how many vehicles to allow on the streets, I’m open minded on the issue.

          By the way, Lyft or Uber or Sidecar is no more a “ride sharing company” than Yellow or Orange or Stita. Or Amtrak or United Airlines or Carnival Cruise Lines, for that matter. These new companies are taxi operators, just like the current taxi operators.

  • margaret Bartley

    It would be interesting to hear what our newest council member, Kshama Sawant, thinks about this.

    • That Guy

      Well, she’s a communist, so undoubtedly she’d want to have one city-owned taxi provider.

    • ClaimsAdjuster

      Kshama is not going to be techno dazzled like Sally Clark or taken in by the TNC’s greenwashing propaganda. The fact that billionaires such as Jeff Bezos are funding the TNCs will get her attention.

      Hopefully Kshama will understand that public safety and protecting the consumer are her chief responsibilities in this matter, not bending over backwards to accomodate a bandit industry that has been thumbing its nose at Seattle taxi regulations.

  • That Guy

    I’m on the side of the taxi companies, with one reservation that I will explain for the techno-geeks here who have an attention span longer than a fruit fly’s.

    Lyft, Uber, and Sidecar are in the taxicab business. As such, they should be required to play by the same rules as Yellow, Orange, Stita, etc. In particular, I am concerned about the vehicle inspection and insurance side of this. The new entrants are uninsured for the purpose of offering cab service, and that especially needs to be stopped, right away.

    If the “ride sharing” (which they are not, any more than traditional taxi companies are :”ride sharing”) operators don’t want to play by the rules, fine. Then they can take their smug, privileged, techno-geek asses out of town, and stay gone. I, for one, can do without these a-hole yuppie nerds who somehow think are God’s gift to us all. I think most of them are arrogant and annoying pests.

    Now for my reservation, which is about the service complaints. If the pro-”ridesharing” types actually care about this, they should petition the city to beef up its hackney regulation effort, including the use of “mystery shoppers” to apply fines to drivers and companies who don’t meet acceptable standards.

    This happened in Boston when I lived here some years back, and within only a few years Boston taxi service went from abysmal to very good. It can happen here too, but only if the city of Seattle’s administration will get its lazy ass in gear. That’s what the people who claim to care ought to be saying to the city.

    • Eric

      Do you realize how ridiculous you sound? If you’re looking to make an intelligent point, try to keep from looking like an ignorant hick by spewing crap like “techno geek” and “techno yuppies”.

      You also mention that people unhappy with the state of the industry should petition the city to beef up regulations. Guess what? There are plenty of complaints going around that the city hasn’t followed through on. If they did, there wouldn’t be situations where a passenger is yelled at due to not having cash and wanting to pay with a credit card. How long did it take the city to step in when you had unlicensed town car drivers picking up passengers from the ferry/cruise terminals and dropping them off on the side of the road when the passengers caught on to their shit?

      The transportation industry needs to change and even if these regulations work against the Ubers and Lyfts, at least the city will have figured out that it has a problem on its hands.

      • That Guy

        Sorry, I meant to say “selfish techno-geek” and “arrogant techno-yuppies.” Happy now? The normal people in this city utterly and completely despise you. Please move to California. You deserve each other. Stay out of our hair. Thank you.

        • wow

          if you think the techies in seattle are arrogant compared to san francisco, then you are sorely misinformed… also, you clearly have a strong agenda/bias.

          • That Guy

            I don’t have an “agenda.” You and your kind do. You think your favorite taxi companies should be exempt from the rules because you can book a ride on your iPhone and be quite likely to have a white driver.

            Look, I can’t command you not to be a racist geek, but we can insist that every taxi operator play by the same rules. If you don’t like it, then move to California. Believe me, you will not be missed.

          • mayaeyah

            So a good portion of this city’s economy is based on the tech industry, so hating on people who either work in or use these products doesn’t paint you as a more authentic local who deserves to be here over others.
            Second, I’m curious about this white driver obsession. You’ve never ridden an Uber, have you? Most of them are immigrants working hard to make a buck, and many of them are former taxi drivers who are now paid better and treated better (I ask them about this every time I ride).
            Finally, not sure if you’re just a troll but I think we all got it – regulate them all equally, supply limits not necessarily a good thing. Would you like to quietly acknowledge that and stop insulting people for no reason other than that they have smartphones?

          • That Guy

            Oh, I just like to insult techno geeks. Someone has to do it. Your tribe is narrow and selfish. It’s really all about you, all the time. The fact that you haven’t noticed that people notice pretty much confirms it.

          • Eric LeVine

            You are truly offensive. Go away troll.

          • That Guy

            Go away technogeek. California is calling, and you will not be missed.

          • Eric LeVine

            So apart from me dying or moving to California, why are you spending time filling the comments here with such hatred and bile? What do you want?

          • wow

            calling me, or implying i am a “racist geek”, is quite a leap of logic when you consider i didn’t say anything relating to race (fwiw, i am not a white person). it’s not a great way to build credibility in an argument, but trolls don’t play by those rules anyways

      • margaret Bartley

        I had a cab driver once that wouldn’t take a credit card. Pretended the card was invalid, although i saw him screw up the number, and when I told him to reenter it, he wouldn’t.

        Fine by me. i happened to have enough (usually I don’t carry that much cash on me), but tipped him $0.

  • ClaimsAdjuster

    The draft rules state that the TNC driver must “maintain personal auto insurance” on his vehicle and that the city will require that as a prerequisite to operating a TNC cab. But since personal automobile policies explicitly exclude picking up passengers as a business, what exactly is the point? This is the city winking at insurance fraud. This cannot withstand legal challenge.

    • That Guy

      I’m curious about this too. You need “personal” insurance as a condition of licensing any motor vehicle, so I’ve assumed that by “personal insurance” this proposed regulation means personal insurance that covers using the car as a taxicab.

      • ClaimsAdjuster

        No, if the draft legislation meant insurance that covers using the car as a taxi, the wording would have been “commercial insurance”.

        In practice Washington state does not require insurance as a condition of licensing a motor vehicle. DOL does not demand proof of insurance as a prerequisite of obtaining a registration. If a cop pulls you over or you get in an accident, you can get a ticket for not having an insurance card. That is why 20% of the vehicles on the road in Washington don’t have insurance.

        • That Guy

          Very good points. I checked some more, and you’re absolutely correct. The “insurance requirement” is toothless, and the city council knows it.

    • Eric

      If anything, insurance requirements will be the nail in the coffin for these companies. If you’re running a town car operation, your typical premium per year for insurance is around $2-3K and that’s not taking into account any potential accidents or tickets on record. I paid that amount back in 2010-11, so I’m not sure whether the rates have gone up or down, but no one using Uber or Lyft as a part-time job will want to pay those types of premiums.

      • margaret Bartley

        I remember reading an article with one of the founders of one of these services, who said the company had a $1 million insurance policy that covered their drivers and cars. I don’t think this is going to be a deal-breaker.

        • That Guy

          It covers the company, not the drivers. I realize that the average techno geek is kinda lazy, but click on the websites and look at the terms between the companies and their drivers. The companies do not insure their drivers.

        • ClaimsAdjuster

          The TNCs claim to have a proprietary insurance plan that kicks in when the driver accepts a fare on his smart phone and stops coverge when the driver hits the app’s drop off button. At that point the automobile’s private insurance takes over. The draft legislation accepts this umbrella insurance approach but there are a number of issues:

          1) It is up to the TNC to say when the coverage starts and stops. In an accident with a large liability, the TNC would have a motivation to deny that their plan was providing coverage at the time. You could also imagine a claim where the driver had hit his drop off button and while the passenger was in the process of disembarking, the TNC vehicle gets rear ended by an uninsured motorist. The TNC would deny the claim and so would the driver’s insurance company.

          Insurance coverage has to be 100% not conditional.

          2) There is no requirement in the legislation or by the TNCs that the driver inform their insurance company that they are operating a livery service. In fact, if the driver told his insurance company that he was using his car as a cab, the insurer would cancel the policy.

          A taxi has a higher risk profile than a private automobile because it is on the road, often in high traffic areas, for 8 to 12 hours a day. As a result it has more accidents, not just when the driver has punched a button on his smart phone app.

          It is because of this higher risk profile that Seattle taxis are paying $6.500 to $13,500 per year for insurance coverage.

          The driver will file claims,(collision, medical payments, uninsured motorist and liability) that arise from his operation of a livery business while hiding that from the insurance company. And often the driver will get away with this. This is insurance fraud and the city is winking at it.

          3) The driver is not covered under TNC insurance for injuries. For that he would have to be paying into the state Labor and Industries system. But TNC drivers are not operating legally. Although the TNC classifies them as independent contractors, they do not have business licenses. Unlike taxi owners, they are not paying L&I premiums.

          4) The TNCs refuse to make their insurance plan public arguing it is proprietary. The city is just supposed to accept their assurances that coverage is there. This doesn’t cut it.

          • margaret Bartley

            Thank you. It certainly doesn’t make sense that the TNC could be so opaque about their insurance coverage. I don’t think that will last long.

          • That Guy

            I couldn’t agree more. Uber’s refusal to make its insurance policy public is pure bullshit. I’d throw ‘em out of here for their arrogance alone.

      • That Guy

        Then Uber and Lyft can get out of Seattle and stay out.

      • ClaimsAdjuster

        Town car premiums in Seattle are now running $4000 per year.

  • really

    some of the anti-ride sharing people quoted sound absolutely bat-sh*t crazy. “The next speaker speaks out against the city supporting “San Francisco-based, Wall Street-supported entities” and asks for a cease-and-desist order to be sent today.”

    really!?

    • That Guy

      I agree with that person.

    • ClaimsAdjuster

      Nobody is buying this “ride sharing” propaganda. The drivers are not working for donations. Lyft, Sidecar and UberX are operating a cab business.