Seattle may shut down ride-sharing companies as it establishes regulations

lyftsideStartups like UberX, Lyft and Sidecar cleared a monumental hurdle on Thursday after the California Public Utilities Commission voted unanimously to legalize ride-sharing, as California became the state to initiate such regulations.

The legality and legitimacy of ride-sharing is still undecided in Seattle, though, as city lawmakers continue to discuss how exactly to manage what has become a complicated and crowded space thanks to our smartphones.

Lyft and Sidecar allow riders to pay via “donation” with credit and debit cards linked to their smartphones, while UberX charges similar rates to taxis but does not require tips. These models typically save riders money over typical taxi services.

Taxi companies in Seattle and other cities are concerned that the three ride-sharing companies are cutting into their customer base with services that say require far less regulation and oversight. They’re letting the city hear about it — quite literally.

The problem the taxi companies have is that Lyft and the others are not regulated by the city the same way taxis are. Technically, since the ride-sharing companies operate without any licensing or inspection by the city, some argue that the ride-sharing startups are conducting business illegally.

sidecarBut the city has yet to make a decision as it allows these companies to scoot around town in the meantime. The Seattle City Council met earlier this month to discuss transportation study that analyzed the growing demand for ride-sharing, which is definitely increasing.

[Related: Lyft co-founder: Ride-sharing startups will make taxi companies more money]

uberxCity Council president Sally Clark, who’s heading up the committee on taxi, for-hire and limousine regulations, said that it’s possible the city would shut Lyft, Sidecar and UberX down until they really figure out what ground rules to set.

“I think it’s either shut them down completely until we have the new regulatory framework fully ready or put in place short-term rules addressing safety and consumer protection,” she told GeekWire. “We’ll see how the discussion goes.”

Clark said that she liked the model California adopted, one that requires ride-sharing startups to enforce company licensing, criminal background checks and a $1 million per-incident insurance coverage.

“I can say that based on the draft I read, they’ve adopted a compelling model,” she said. “For me, it addresses the insurance concerns, as well as concerns about driver background checks and vehicle safety.  However, the draft didn’t address the question of whether rideshare drivers should be licensed in some way. That’s an open question here.”

There is another meeting scheduled for next Thursday which will focus on both the possible elements of a permanent overall regulation reform package and what rules should be made in the interim as the city decides what to do.

  • patroclus1

    Sally Clark! Hand off our rideshares! No shutting them down while you dally or what not. Come up with some regulations fine. But know this. I’m done with taxis until they evolve. I’m an UberX’er through and through.

  • http://wac6.com/ William Carleton

    Car2Go FTW! As big an advance in city-living as a smartphones were a few years back.

  • Guest

    “Taxi companies in Seattle and other cities are concerned that the three ride-sharing companies are cutting into their customer base with services that say require far less regulation and oversight.”

    pffffft… how about we start cracking down on the crazy drivers that we see in yellow cars with a light on top first? Cutting people off, stopping in traffic to let a rider get in or out, blocking intersections, speeding, weaving in and out of traffic. I actually smile when I see a taxi get pulled over. Price gouging every passenger. The ones that need more oversight and regulation are taxis.

    • Kat

      Exactly! People don’t feel safe with city taxi drivers as a rider or a pedestrian! Why should I be forced to give my money to people who drive like dicks and act like dicks?

      Taxi drivers need to work on their customer service. Point blank.

    • Clay

      I had a cab driver try to run me off the road as I was cycling down 3rd ave. He laid on the horn and even drove lightly into the back of me while i was at a stop light. I tried to report him to the cab company (Far West), but they basically told me that there was nothing that they could do, and that I would have to file a police report to do anything about it.

      It is ridiculous. At least with Uber, the drivers have some accountability for their actions. I will never use another city taxi again.

  • Justin Graham

    Sally Clark, please do not be draconian in your approach. There is a clear gap in the needs of the public and the services available from traditional taxis. Uber, Lyft, and Sidecar have filled this gap nicely with safe, easy, reliable, and cost effective service (did I say reliable?). I will never take another taxi their rates become competitive, they respond to pickup requests promptly, show up on time, and the riding experience is consistently pleasant.

    Stifling innovation with law while the government catches up with the times is more deep south than progressive Northwest.

  • Michael Paul Warncke

    Sally Clark’s email is available on the seattle.gov website, she can be contacted at sally.clark@seattle.gov. If you are passionate about keeping rideshares going, I would recommend sending a respectful email her way. It can’t guarantee anything, but it can’t hurt and only takes a couple minutes.

  • Seattle Lefty

    Uber and the like are not advantaged because of lack of regulations. They are advantaged because they have built a dramatically better customer experience using technology and innovation.

    Regulations certainly have not been effective in making my Seattle taxicab experience reliable, friendly, clean, or safe (one cab driver I rode with hit 90 on the viaduct). Additionally, when I pay with a credit card, most cab drivers act like I stabbed them in the face.

    Uber, on the other hand, seems to have actually gotten this calcified industry’s attention. I wouldn’t know for sure, though, because one experience with Uber was enough to make me say “never again” to the terrible Seattle taxi experience that these vaunted regulations have delivered to us.

    I’m a Seattle lefty in most respects, but any government official who pops out of the woodwork to mess with this extremely welcome market development will not just find me voting against them at the next opportunity, but writing campaign donation checks to any opponent who agrees that this kind of transportation innovation in the Seattle market should be encouraged, not stifled.

  • guest2

    Why do so many people ignore reality? Guest says taxis price gouge and Justin Graham complains that taxi rates aren’t competitive.

    Reality: taxi fares are government regulated. Taxi drivers have no control over them.

    Reality: taxi drivers have to pay public utility taxes. Rideshare drivers don’t pay those taxes.

    It’s easy to be competitive and disruptive if you don’t have to follow the same rules as the competition.

    • br

      At one time taxi’s were not regulated either and I guess they somehow sucked even more then today. If Uber had these problems then regulation would be in order.

  • Kara

    regular taxis are the worst – poor drivers, dirty filthy cars that pollute our streets!

    Uber is amazing!!

  • real jobs create

    Let’s call it what it really is… more tax revenue!