Is that pink mustache too big? Seattle’s proposal to regulate ride-sharing companies

lyft-pinkMembers of a Seattle City Council committee will meet Friday morning to discuss a draft ordinance to regulate ride-sharing companies such as Lyft, Sidecar and Uberx in the city— proposing a two-year pilot program designed to ensure public safety and a create a more level playing field with taxicab companies.

The draft ordinance would require drivers to get a special permit and submit their vehicles for inspections, with a zero-tolerance drug and alcohol policy and other requirements. It would also mandate that ride-sharing companies obtain a $50,000 annual license to operate as a transportation network company, with no more than 100 vehicles.

[Follow-up: Sidecar, Uber not happy with Seattle's 'anti-competitive proposed ride-sharing regulations]

And in an example of how far the city is prepared to go in regulating ride-sharing companies, the ordinance outlines guidelines for “trade dress” — defined as “the unique visual element associated with a transportation network company that is attached to a vehicle affiliated with a TNC so the public and passengers can identify the vehicle as being associated with that particular TNC.”

Yes, even the pink Lyft mustache would be regulated. Specifically, the draft ordinance says, “The trade dress may be placed on the vehicle body, but not on the roof or covering any windows, vehicle lights, or obscuring the view of any mirrors, and cannot exceed 4 square feet.”

The discussion tomorrow by the Seattle City Council Committee on Taxi, For-hire, and Limousine Regulations follows earlier rumblings about the city potentially shutting down the ride-sharing services, which ultimately didn’t happen.

There won’t be a vote on Friday. The purpose of the meeting is to discuss the ordinance and the new approach, and gather feedback in advance of a vote next month.

We’ve contacted Lyft for comment on the proposed regulations, which are available in full in this PDF. Also see this summary, below, from city staff.

Summary of Draft Taxicab and For-hire Legislation 

Transportation Network Companies (TNC) 

  • Purpose – To address public safety and consumer protection issues associated with mobile “app” dispatch companies using unlicensed for-hire drivers to provide transportation services.
  • Entire “program” is a pilot. Licenses will expire on Dec 31, 2015 unless Council acts to extend.
  • Maximum of 100 vehicles per TNC (minimum of 15).
  • Can only dispatch through an individual, exclusive mobile “app”, with all payments via credit/debit card (no cash).
  • May not dispatch Taxis, but can dispatch licensed For-hire Vehicles.
  • All drivers must have a TNC Driver’s Permit (see below) or a For-hire Driver’s License.
  • Must enforce a “zero-tolerance” drug/alcohol policy for drivers.

Insurance: 

  • Must have an “umbrella” $1 million policy – per incident, with City as a named insured.
  • Copy of policy must be submitted to the FAS Director.
  • Must include underinsured motorist coverage.
  • Must be in effect while vehicle is “active” on system. This includes times when the driver is waiting for a call, but has not yet been dispatched.
  • Policy must meet State requirements and FAS Director will determine whether policy provides adequate coverage to protect public.

Vehicles: 

Must arrange for third party to conduct a 19-point safety inspection of all vehicles.

Vehicles not subject to more complete inspection by City (e.g. For-hire Vehicles), are restricted to 16 hours per week. (Limits use of vehicles that are not subject to City’s full inspection regime. Commercial Taxis and For-hire Vehicles accumulate many more miles than a typical private vehicle.)

Rates – different possible structures: 

  • Distance charge based on zones, which can vary by time of day.
  • Any distance/time rates measured by smart phone GPS must be cleared through the State.
  • Rate structures must be clear to customers (transparency) and description of rate structure must be filed with the City.

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.

Records – TNCs shall maintain driver and vehicle records and collect data such as dispatch and revenue records, vehicle collision reports, and passenger complaints. The City has the right to inspect TNC records at any time.

Transportation Network Drivers 

  • Must be 21 and must obtain a TNC Driver’s Permit or a For-hire Driver’s License. Providing services without a permit or license results in a $1,000 civil penalty for first violation, criminal misdemeanor for second.
  • TNC Driver’s Permit will require taking a course, including instruction in defensive driving and driver safety, and passing an associated test. Process will be less extensive than that for a For-hire Driver’s License, but with emphasis on safety issues.
  • Permittee applicants will be subject to a criminal background check and a driving record review – same as current requirements for a For-hire Driver’s License.
  • Renewal-City /County will determine initial eligibility and issue permit. TNCs have an ongoing obligation to review driver’s DOL and criminal records and arrange vehicle inspections. Prior to annual renewal, TNCs shall certify the eligibility of drivers and vehicles.
  • Will be limited to 16 hours per week active on the system, unless they have a For-hire Driver’s License. (With “lighter” training not appropriate to be a full-time driver; and restricted hours will help address peak time demand without flooding market with vehicles during off-peak hours.) $1,000 civil penalty for exceeding 16 hour requirement.
  • Can only affiliate with one TNC.
  • May not pick up hails – $1,000 civil penalty and revocation of permit or license for violation.
  • May only provide services when active on the system.
  • Must maintain personal auto insurance.

Taxis 

Authorize up to 50 new licenses to be issued by lottery, under rules set by FAS.

For-Hire Vehicles 

  • Clarify that any trip booked through an “app” is prearranged, regardless of timing.
  • Per above, For-hire Vehicles and For-hire Drivers may operate on a TNC without the hours limit imposed on other drivers and vehicles.
  • MD

    There goes the competitive rates

    • ClaimsAdjuster

      UberX charges the same rates as taxis. The For Hires are flat rate and generally lower than either taxis or the TNCs.

  • David O’Neill

    Apart from the exorbitant fees for the service, I’m not seeing anything that as a consumer I wouldn’t have expected to be already part of the service. Which makes me wonder just what is part of the service…

    • tony

      I agree that all of these regulations seem to be things a company would expect in their drivers to begin with. My question is how does this compare to cab company regulations? Is this the exact same? Seems to me that limiting the number of cars in a fleet does not level the playing field with cabs, but it actually keeps ride share companies at an unfair advantage. I doubt Yellow Cab only has 100 cars in its Seattle fleet. Cab companies are getting beat because of faster service, cleaner cars, and drivers who are not overtly rude (I’m sure everyone has experienced a cab driver who became upset when you wanted to pay with a card instead of cash).

      It is on cab companies to keep up with Uber and the like who are offering a better service. If Yellow/Orange Cab want to stay competitive, perhaps they should consider improving their own service before asking the city to regulate the service of others: don’t smoke in your own cab, arrive on time/have better dispatch operators – how many offer a quality app for reservations?, offer more efficient payment options (seriously, who still uses manual swipe machines?), etc.

      I am admittedly not very knowledgeable with a lot of this stuff, but it all seems very sketchy to me.

      • David O’Neill

        I don’t get the limit on car numbers either. And think the focus should be driving to improve cabs so they have to compete with the new services rather than force everybody down to their level.

        OTOH – I’ve no issue with insurance requirements or that drivers acting as public hire drivers have some additional training and assessment of their driving skills (I wouldn’t mind seeing that with cabs either)

      • DudeHAHA

        The yellow cab makes their drivers independent contractors. They have to deal with credit card companies and some don’t have the ability or the credit rating to set up an account, not to mention they dislike the cut credit card companies take.

        If we wanted to support better service and company responsibility for the quality of employees, we’d support better labor laws where businesses would not off load benefits, administration and payment to “independent” contractors (cough, employees). Which, by the way, makes yellow cab no different than these mobile schemes of off loading costs to drivers. Why would they be more diligent over time than yellow cab or other companies as to drivers when they are about making the fare and the driver fees, actually signing up more drivers as possible (unlike yellow cab)? They only way the public gets protections is through the law.

  • Kevin McCarthy

    There must have been a lot of complaints? Or were the bureaucrats simply feeling left out?

  • Guest

    I’m not a lawyer, but I’d like to think of myself as one. Under the law as it’s been drafted, a TNC is only subject to regulation if it has between 15 and 100 vehicles, but no more than 100.

    I’d like to propose that Lyft simply divest itself of all but 14 of her vehicles, thus disqualifying her from being a TNC. This will save riders a lot of $.

    “But wait,” you’re thinking. “How is Lyft supposed to make $ with only 14 vehicles, you moton?!”

    Ladies and gentlemen, here’s One More Thing.

    (draws back curtain)

    This is Lyft 2. It looks and works just like Lyft, but it’s a separate company. It also has only 14 vehicles, thus making it not a TNC. If there’s enough demand, we’ll start Lyft 3, Lyft 4, and so on up to Lyft 999.

    “You moton!” I hear you cry. “How are we supposed to keep these cos straight?! I hate you and your family!”

    Well, I can’t do anything about that last point, but for the former, I’d like to propose “Lyft Search.” This proprietary engine will “search” the available cos in the area for cars. Of course, we’ll start with Lyft 1, 3, and 9, but other cos can come online. Because Lyft Search has no cars, it is not a TNC, and as such it will not be regulated.

    In conclusion, these laws are not enforceable and will not effect your commute. Float on, all right!

  • DudeHAHA

    Having zero tolerance for drug and alcohol infractions and requiring open records on drivers and such is just good public policy for people transport businesses. I’d add sexual offender to be added to the exclusion list for drivers. Requiring insurance and a business fee is also not awful for the people transport businesses. Ya wanta have a business to transport people? Then ya have to obey some public interest rules. To whine about it makes you seem like a privileged venture capital twat.

  • ClaimsAdjuster

    The new 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? Is the city now becoming a partner with the TNC driver in insurance fraud?

    • DudeHAHA

      Yup. Insurance rates for businesses who are people transporters are different than personal rates. Yup. It’s a skirting of appropriate rates for risk.