sidecarThe City of Seattle’s proposed regulations for ride-sharing startups, which will be discussed at Friday’s City Council meeting, are not making companies like Sidecar and Uber very happy. (Lyft is not pleased, either. Story updated with comment from the company below)

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.”

[Follow-up: Here's what happened at Friday's City Council meeting]

Brooke Steger, general manager of Uber Seattle, said in a statement that her company is concerned with “the anti-competitive direction this draft ordinance has taken.”

“The Committee has already heard from over 12,000 users of the Uber app who would be outraged to see their transportation options diminished,” the statement reads. “Placing arbitrary limits on the number of drivers that can use the Uber app, and the number of hours they can drive, hurts all Seattleites.”

uberxUber also said that the proposed ordinance keeps its drivers from building small businesses that will “grow and thrive.”

“It will also reduce supply in traditionally underserved communities, a problem we’ve seen with the current system,” Uber said. “Our hope for the City Council to create a policy that benefits all of Seattle – drivers and customers alike – by encouraging entrepreneurial activity instead of restraining it.”

Meanwhile, Sidecar feels the same way. The company gave this statement to us, noting that the draft ordinance is “anti-competition, anti-innovation and anti-consumer choice”:

People want transportation options in Seattle. We are disappointed in the Seattle City Council’s reluctance to embrace innovative transportation solutions that will benefit all Seattleites. The Committee’s proposed legislation is anti-competition, anti-innovation and anti-consumer choice. We hope that the Seattle City Council follows California’s lead and moves in favor of legislation that is best for its citizens, not the business interests of the taxi industry threatened by competition.

California became the first state to initiate such regulations in September 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.

lyft-pink
Lyft, another ride-sharing company, would have its famous pink mustaches regulated by the city in the proposed draft ordinance.

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.

The draft ordinance, which proposes a two-year pilot program designed to ensure public safety and a create a more level playing field with taxicab companies, contains various other regulations. They include a $1,000 civil penalty for drivers who pick up riders who hail them in the street, a $50 drivers permit and $5 for a license photo. Even Lyft’s famous pink mustaches, attached to the front of its vehicles, would be regulated.

Perhaps even more interesting is the annual license fee issued to ride-sharing companies. The fee would be $50,000 for the first year, but every year after that, it would be 0.35 percent of the company’s annual gross revenue or $50,000 — whichever amount is greater.

A summary of the proposed regulations is summary from city staff is below:

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.

Update, 4:18 p.m. PT: We heard back from Lyft. Much like Sidecar and Uber, the company isn’t happy, either. Here’s their statement:

The Seattle City Council committee’s draft legislation would effectively shut down new transportation options in Seattle and eliminate consumer choice for residents who depend on safe and affordable transportation alternatives like Lyft. The draft legislation states that these rules address public safety and protect consumers; however, by limiting the Lyft community to 100 drivers who may only drive 16 hours per week, it is clear that these rules are designed to protect existing industries. The committee claims that new transportation options available to Seattle residents are “competing with existing taxicab and for-hire drivers in the transportation market and causing negative impacts,” while the City of Seattle’s taxi usage data shows that taxi companies have made more money in 2013 than in previous years. We have worked closely with regulators across the country to protect public safety while allowing for innovation and consumer choice, and we hope that the City Council will listen to their constituents who want more transportation options.

Comments

  • Richard

    This whole topic drives me CRAZY! I understand some of the “safety” concerns, but the simple fact is that other than “safety” there isn’t a consumer protection in this program. The city, I suppose, could just add one more clause that says, “Hey cab companies, GET YOUR SHIT TOGETHER and we won’t have to do all of this!” Cabs only go where there is natural business. So the folks that live on side streets (99% of us) can’t get a normal cab when we need one. Even if we CALL the actual dispatch, in my experience, the cab only shows up about 50% of the time… and after 20+ minutes usually!

    There are only a few “requirements” I have for any transportation company:
    – Make it easy for me to use your service (an app is a start) (allowing me to track my driver is a NICE added benefit)
    – Pick me up in a timely manner or at least when you say you’re going to
    – Drive me safely to my desired destination (asking me if I have a preferred route is completely optional)
    – Charge me a reasonable rate (including a tip in pricing doesn’t hurt at ALL)

    I don’t think these services necessarily are “cheaper” than cab services, especially after all these HUGE fees they’ll be required to pay. But yet, they just do exactly what they say they will do.

    How many times have I had a cab driver complain about taking a CREDIT CARD??? Again, about 50%, “So, you no have no cash?” or “Sorry no credit, machine broken”. Then it takes them 15 minutes to get my card to process on their 1987 credit card processing network. (Sorry if the “quote” seems racist or whatnot, but… it is what it is, it’s just my experience)

    I actually agree with these “ride-share” companies. This sort of regulating purely inhibits competition and innovation. Boo on you Seattle City Council for bringing progress to a tire screeching HALT!

    • That Guy

      Poor techno-geeks! Here they start a taxicab company, and then they are shocked, just shocked, when the city says, “Hey, taxicab company, you’re going to have to follow the same rules that apply to the rest of the taxicab companies.”

      • Richard

        When those “similar” taxi companies offer the services these guys do… then the city should be making a LOT more money off of all of them. But in the mean time, putting these smaller companies out of business (I hardly call a $50,000 license fee “reasonable” for a new business) for doing something better is not the answer.

        The great part that this whole conversation brings up (which is why the taxi drivers are now getting all pissed off about the topic) is JUST how hated the taxi drivers in this town are and JUST how lowsy their services are. They started this mess as a complaint for equal regulation (which I’m not against) and they end up with a HUGE black eye because it all comes to light how many people HATE them and their terrible customer service, smelly cars and mean drivers.

        • That Guy

          Do you realize JUST how hated the techno geeks are? Plenty of us wish you’d all just say the hell with it and move to California where you belong.

    • ClaimsAdjuster

      You forgot about paying for your medical bills in case of an accident.

      • Richard

        I agree with the medical bills argument that you make. But just because they are “required” to have insurance for this type of thing means NOTHING. We are all “required” to have insurance, but I know plenty who don’t maintain their insurance. Also, a very good friend of mine was NEARLY killed a year ago by a cab driver who was going 85 mph and rear-ended him on the highway (texting while driving in Olympia). That driver, NOR their company, had insurance to cover ANY of the injuries or damage (totalled his car) to his vehicle. He’s been in and out of physical rehab for almost a year now.

        I know Lyft already requires pretty high liability levels from their drivers (a friend of mine drives for them). I don’t know the actual level of liability requirements, but I recall him telling me it was pretty high.

        • ClaimsAdjuster

          Means NOTHING, huh? Don’t think so. Seattle, King County and state regulations require that the insurance company provide proof of insurance to get the cab’s medallion.

          They also require that the insurance company inform the regulators when the insurance is cancelled. At that point these agencies will suspend the cab license. Seattle inspectors will contact the cab owner to surrender his medallion. if he doesn’t they will go looking for him and seize it if necessary.

          Lyft drivers are running around with private insurance on their vehicle that specifically excludes operating a livery service. Lyft drivers are hiding the fact that they are using their car for a business from their insurance comapny. They are committing fraud.

          • Richard

            I wasn’t referring to commercial policies meaning nothing. I was talking about how common place it is for consumers to not have proper insurance.

          • ClaimsAdjuster

            Is that version 2.0 of what you are saying? This is what you wrote: “But just because they are “required” to have insurance for this type of thing means NOTHING.”

          • Richard

            Apparently so. I was assuming the commercial policies acted the same way as consumer in that very little was done about people who cancelled their policies.

          • That Guy

            Not if all taxis are treated equally and are required to get a city license.

    • Richard

      Sorry I didn’t emphasize or elaborate enough the “safety” of “drive me safely to my desired destination” statement. When I say safety, I DO actually mean having proper commercial insurance.

      I grew up helping to run a trucking company in my family business (tractor trailers, cranes and other heavy equipment). I completely understand the need for commercial insurance and safety inspections for vehicles AND no, self regulating these requirements is not the answer either.

      Just out of curiosity, is it normal for the city to require that the City of Seattle be a name insured on the commercial policy? Is that normal for this kind of requirement? Sounds bizarre to me. I would simply assume that having a $1mm umbrella policy (per incident) would cover whomever was involved… including the the city.

  • kurt

    Why would anyone representing the City of Seattle vote for a proposal to limit the number of options that cut down on drunk driving and increases consumer satisfaction? The Seattle taxi companies need to invest in technology – and have been unwilling to do so to date.

    • That Guy

      Ooooh, that’s a nice attempt at manipulation of emotions there. Play the drunk driving card! If Lyft, Uber, and Sidecar want to combat drunken driving, that’s fine. But they’ll have to do it while playing on an equal regulatory field as the other taxi operators.

      • Richard

        Manipulating emotions? Laughable. Any service that does just that, reduces the opportunity for people to drive drunk, should be commended. That includes taxi companies. Having been one of those drunks a time or two, arguing with someone on the phone at a dispatch (each of the four times I call) to get a cab to me to carry my drunk ass home and keep me from driving, is NOT a compelling way for cab companies to maintain they are doing the same thing. On the other hand, I’ve had zero issues in my severely inebriated states to press the “Request Pickup” button on the apps… the app finds me, I don’t have to explain to anyone in 4 different languages where I am… and they show up, usually AT MOST within 10 minutes. I admit, when I’m drinking for some reason I don’t feel like calling someone over and over and over again to get a ride. I know, sounds completely unreasonable.

        I think you overestimate how easily anyone is emotionally manipulated these days. None of these companies are stating that drunk driving prevention is their sole purposes for existing. Or claiming the current system fails at this (which I would contest that it DOES fail us drinkers).

  • http://www.tatango.com Derek Johnson

    Interesting…

    Trying to look at this from the city’s perspective, giving them the benefit of the doubt. Full disclosure, almost daily Uber user.

    1) Requiring drivers to have permits and photos taken, and it costing $55, I don’t see a problem with that.

    2) Third party inspecting vehicles, definitely a good call by the city. I want to make sure I’m going to get to my destination in one piece, and I have no clue how this is regulated by ride sharing companies right now. Good startup idea, be the inspection company for ride networks like this, and have an API so I can make sure that the car that is picking me up has the proper inspections, insurance, etc. Kind of like carfax, but for getting picked up in the car.

    3) Any distance/time rates measured by smart phone GPS must be cleared through the State. Sounds good to me, I want to make sure I’m not getting screwed on mileage, time, etc.

    4) TNC Driver’s Permit will require taking a course, including instruction in defensive driving and driver safety, and passing an associated test. Sounds good to me, again safety is key.

    5) Can only affiliate with one TNC. – This is stupid, it’s a free market.

    6) Must maintain personal auto insurance. – Agreed.

    7) $50,000 annual license to operate as a transportation network company. – Hummm… There’s licenses for all kinds of business, so why not this kind of business? If the city honestly needs staff to make sure everyone is licensed, cars are checked, there is some form of enforcement regarding the rules, etc. and all of this adds up to $50,000 for each TNC, then maybe I see the reasoning here. $50,000 per TNC seems a little high, but not sure really how many TNC’s there are.

    8) No more than 100 vehicles driving a maximum of 16 hours per week. – This is the one I’m trying to get my head around… Maybe they’re capping the vehicles at 100 so that a TNC doesn’t have 5,000 drivers that have to be monitored, licensed, managed, etc. all under one license which is only bringing in $50,000 of revenue for the city to cover those costs. The only reasoning I can understand the 16 hours per week is from a safety perspective. They say that for-hire cars, taxi’s, etc. drive more, therefore they have to go through much more rigorous and frequent inspections because of the wear and tear on the cars. This makes sense, I don’t want to be picked up by a driver that puts 16 hours a day on his car driving around, and the last inspection he did was a year ago on the car.

    Anyways, just my two cents, trying to see it from the other side.

    • anon

      “Protect me, Goverment, you’re my only hope.” Thank you for promoting the mindset that leaves asshats like this in power.

      • http://www.tatango.com Derek Johnson

        And you trust the private companies to self-regulate themselves?

        • Dave Cannon

          Yes, I do. AirBnb has been functioning perfectly fine with its rating system. I trust previous customers’ reviews more than some city bureaucrat.

          • That Guy

            AirBnB is NOT “functioning fine.” Travelers routinely get ripped off, and neighbors who thought they were moving into a residential building find themselves living in a hotel. Just because some techie geek and his venture capitalist buddy needs to make money doesn’t make it a good idea.

          • Dave Cannon

            And those angry customers post angry reviews, then scammers don’t receive business.

            You want to know who’s getting ripped off? Every last person who takes a taxi in NYC—because the industry goons have lobbied the city to restrict competition in order to keep their fares artificially high.

        • http://lianza.org/ Tom Lianza

          Even if you don’t take a completely libertarian stance, it’s at least worth acknowledging there are existing regulations – drivers licenses for all drivers, car inspections for all licensed vehicles – that are in place in the interest of keeping people safe.

          If we want cars that carry passengers for fares to be “extra inspected” or have the drivers take “extra driving tests” beyond what they already do, I’d think we’d at minimum like to see some evidence that there’s a problem with accidents and unsafe vehicles now, wouldn’t we?

      • Owen Nohn

        Government safety regulations arose from railroad dangers, ignored by operators, killing people. I believe the degree of regulation needs appropriate balance, but the market alone may not address safety issues.

    • Guest500

      Most licenses are fronts put up by businesses to keep out competition. Does your hair dresser really need a license to “safely” cut your hair? No. Does someone who already has a license, already has insurance, already has their vehicle inspected need another round of this so they can give you a ride or it won’t be safe? No, of course not.

      • Sam Price

        The hair dresser does need training when it comes to mixing chemicals that they will be placing on your head for colors. Some of those chemicals are mildly caustic and have the potential to cause harm if not properly used.

      • ClaimsAdjuster

        The TNC driver does not have the proper insurance. Private insurance poliocies specifically exclude picking up passengers as a business.

    • That Guy

      The 16 hours a week did cause me to raise my eyebrows. I think all cab companies here should compete on an equal basis. If Yellow, Orange, Stita, etc. are limited to 16 hours a week, then fine for Lyft, Uber, and Sidecar. Otherwise, not.

      The theoretical reason to limit vehicles on the street is to insure a supply-demand balance. If there are too many drivers at peak times, there won’t be enough money to be made. The system will collapse, and no one will be able to get a cab at 2 in the morning.

      I’m fine with the city requiring Lyft, Uber, and Sidecar to conform to the same rules. As for the service complaints with existing operators, the city should have a stronger hackney commission with “mystery shoppers” who bust bad drivers and companies. These service issues could be solved quickly if the city would simply do its job.

      The answer is NOT to flood the streets with uninsured gypsy cabs from Lyft, Uber, and Sidecar.

      • http://www.tatango.com Derek Johnson

        Well what they’re trying to do is to create two different classes of vehicles, which makes sense. I think a yellow cab and a person giving rides to people on the weekend should be managed, inspected, insured, etc. differently. Maybe the city just needs to raise the hourly limit to something like 5 hours a day or something, that would seem fair.

        • That Guy

          They are all taxis, and should be treated identically.

      • kurt

        Yes, ‘theoretical reasons’ are great. However, the reality is different from your theories. The reality is that there are not enough taxis to service the peak hours in Seattle. If it were as simple as supply and demand, we wouldn’t see Lyft, Uber, and Sidecar making any money in Seattle, and they would have already left town.

        • That Guy

          Prove it. Where’s the study? Or is it just that you and the rest of the techno geek yuppies hate the idea that you might have to make an actual phone call, and that your driver might wind up being black?

      • Dave Cannon

        “The system will collapse and no one will be able to get a cab at 2 in the morning.”

        Not gonna happen.

        When the profitability of a new business venture goes down because of competition, fewer people go into that business.

        • J.R. Neumiller

          The problem, Dave, is that cab companies are regulated public service vehicles, and serve the community at ALL times, not just 2AM. That’s what the communities are ensuring – that the driver servicing the 2AM drunk will be willing to pick up the laundry lady at 8AM.

      • J.R. Neumiller

        Oh, AMEN to that, friend. You touch upon a very pertinent topic, which is subsidizing peak demand.

        A power utility rarely operates at full power for 90% of the year, but must have the capacity to generate that power when needed. The cost of that infrastructure needs to be paid for with off-peak billing rates. You can’t simply meter power demand, observe that there is only 40% power consumption, and cry RIP OFF to the power company for charging like its 100%. (After all, you don’t want them charging extra during peak demand, do you?)

        The existing cab companies MUST PRESERVE their rate structure so as to provide cab service during off peak times. Which means if these ride sharing app companies want to do business, they have to pony up for the same thing. Otherwise, the industry will crumble when the full time drivers cannot make enough during peak times, (bar closings,) to pay for their serious down time at 10:30AM on a Monday morning. Hope this is clear.

        • Dave Cannon

          Wrong again. The barrier to entry for a power company is astronomically higher than for a private taxicab. If I see the potential to make huge profits selling energy during peak times, I can’t just pull a coal plant out of my closet and hang my shingle.

          Go hire a taxicab somewhere outside of the U.S.—if demand spikes at Airport Arrivals near 5pm, then taxis in that area will be able to negotiate higher rates. Other drivers see the opportunity and flock to the area. Demand sets the prices and profit margins signal an opportunity for market entry.

          We need a bunch of taxis during peak time. We only need a few at 10:30am.

          • J.R. Neumiller

            Cab companies are restricted from charging peak rates because their fare structure is regulated by the municipalities. The only ones who can negotiate rate increases are illegal gypsy drivers who are not employed by a medallioned company – the very ones who will not provide service at 6AM on Monday mornings, (which are the people the municipality is deigning to serve.)

            The medallioned companies are REQUIRED to offer cab service 24/7 as a public transportation service. They are not allowed to charge peak rates because their fares are restricted by the municipality, (and will get fined/fired if they do so.)

            Preserving the status quo means having taxis available 24/7 – not just at peak times. If the medallioned companies cannot make maximum profit during peak times, they will not have the drivers willing to work at off peak times.

            This is basically an argument between regulated vs. deregulated service, (like what happened to the airlines in the 80’s when they went deregulated.) Before deregulation, all fares were regulated by the government, and the only thing that differentiated airlines was service. Since deregulation, airlines compete on price – forcing out all but the cheapest carriers. The result? Lower fares, with neanderthal service.

            Same thing will happen to your late night bar crowd, David. For a few months, service and prices will be great. But after the better drivers can’t make any money, (because the cheaper drivers keep lowering their prices,) taxi service will degrade rapidly until all but the cheapest drivers are running people around.

            No free lunch, Dave, any way you cut it. You can’t have good service apart from protected rates, (and if you think different, feel free to start your own airline and prove the naysayers wrong.)

    • Richard

      Good points Mr. Johnson. :)

      The difficulty with ALL of this for me, is that with “normal” businesses the taxicabs would have been put out of business completely MONTHS ago because their customer service, smelly cars, and 3 decades old dispatch system have failed us as consumers. And so, as consumers we vote with our dollars and move to a better service (and I KNOW how much you use Uber so I commend your openness to still try to see the City’s viewpoint). Now we’ll likely not have the ability to even vote with our dollars. On the other hand, I suppose we could start a Kickstarter to crowdsource the funds for the $50,00 per license fee LOL (which I also can’t really tell if $50,000 is too much or what its purpose serves). I am concerned that the $50,000 just shuts down the companies eliminating the dire call out for industry changes.

      There are some regulating type institutions that were initially put into place with the VERY best of intentions. And, they were VERY necessary… for example, unions. No, I’m not anti-Union. But when they were founded their concerns were MUCH MUCH MUCH more important and relevant than they are today (meat factories in Chicago?). I’m sure there are still many instances where unions are very necessary, but… actual regulations already assert protections for workers that unions fight for these days. I’ve always thought that many of the pro-union people I’ve known have been very… entitled. That entitlement can translate VERY poorly into demands for unreasonable wages (I’m VERY much pro-higher wage), and the most difficult part for me about the entitlement is tiered compensation/benefits programs that are set into place. Sure, if you’ve been some place for a long time you deserve more… but not by default! You deserve more because you bring more experience and knowledge to your job. However, when entitlement is set into motion, that experience just plays out as, “HA, now you can’t even fire me if you wanted to… now give me more money to move slower and do what I want”. I know, I know…very rarely actually true.

      So, playing off of the entitlement angle, the cab companies and the old school driver permits (there’s a different name for them, but can’t recall what it is, chit? medallion?) to regulate the number of TERRIBLE drivers employed by the cab companies… those permitted drivers who are terrible to their customers, BUT they HAVE their permit so therefore they are FULLY qualified! Bullshit.

    • RileyDeWiley

      “Any distance/time rates measured by smart phone GPS must be cleared through the State. Sounds good to me, I want to make sure I’m not getting screwed on mileage, time, etc.”

      Be careful here: what they are proposing is that the State have the power to approve rates, essentially, to fix prices. If the State wants to guarantee that any ride that Uber claims is a five-mile ride, actually is a five-mile ride, then fine. But I think they are saying that the State can tell Uber that a five-mile ride should cost $X, which is a toad of different color.

      As far as the limits on hours drivers can work, and the number of cars on the road: they are limiting competition, pure and simple. Cab drivers work up to 12 hours a day, every day: the medallion is so expensive, the cab must be in motion constantly to pay for it. In New York, some medallions are co-owned by partners who work 12 hour shifts: the night driver ends his shift outside the day driver’s apartment, where he hands over the keys, slides over, and accepts a ride home. Twelve hours later, they repeat the process, 24 hours a day, 7 days a week, 365 days a year.

      • Dave Cannon

        The medallions are so expensive because they are artificially scarce—years ago, the industry convinced the city to cap the number of medallions issued, in order to prevent competition. It’s an artificial barrier to entry. This example is used in every Econ 101 textbook.

        • J.R. Neumiller

          The barrier needs to be there to preserve 24/7 service. Cab companies are incented to provide full time service because they need to make as much money as possible. They are REQUIRED to field cabs 24/7. Your gypsy/app drivers are not so.

          • Dave Cannon

            I’m not making heads or tails of your comment. Restricting the number of cabs somehow makes more of them available?

            If there are more paying passengers at night than there are willing drivers, then that signals demand. Night drivers will charge higher fares and will be more profitable than daytime drivers, which will entice more drivers to start offering nighttime services.

          • J.R. Neumiller

            The rate structure is capped by the municipality – no driver can charge more or less at different times or days. Same fare no matter what.

            Therefore, the only way the 24/7 driver can subsidize the off peak times is by making as much as he can during peak times. If he is competed against during peak times by the unrestricted ride-share driver, he will not be willing to provide off-peak service.

            The unrestricted, ride-share driver – as he is currently situated – is not required to provide 24/7 service, and can be opportunistic.

            As the municipality needs cab service for ALL times – not just peak – you will not find many ride-share drivers wanting to pickup a fare at 6:30AM on a Tuesday morning because the traffic is just not there.

            Hope you can get a hold of this, Dave. Its not as simplistic as you think.

  • Eleanor Zimmermann

    Very disappointed to see city council apparently kowtowing to special interests. For the average Seattle resident, this is a loss. Especially considering they chopped public transit funding earlier this year.
    Lyft drivers make a living wage, moreso than than taxi drivers.
    The only winner here is Taxi execs.

    • DanMark en

      Actually, voters chopped public transit funding.

    • That Guy

      Lyft drivers do not have automobile insurance that will cover their passengers, bystanders, and other drivers in the event of a crash. Until they do, they and drivers for Uber and Sidecar should be prohibited from offering taxi service here. And there are a bunch of other reasonable rules to comply with before getting into the taxi business.

      If these companies want to free-ride, let them do it somewhere else.

    • ClaimsAdjuster

      Lyft drivers get 80% of the gross revenue of their fare. Out of that they have to pay for gas and maintenance. If they were paying to actually insure their cabs or themselves through L&I, the money for these items would also come out of that.

      On an $100 night, they might go home with $65.

  • 520 Slogger

    Ok, the city that allows a 30 unit building where a single family house existed yesterday with ZERO available parking kills the only transportation system that we now depend for mobility??? I don’t get it. The taxis are worthless in this town.

  • Dave Sutton

    Something needs to be done. As things stand now, UberX and Lyft are dangerous for passengers AND drivers because they have the following insurance problems:

    Car insurance will NOT cover UberX or Lyft drivers (private individuals) operating their vehicles in a commercial manner.

    By downloading the UberX or Lyft apps, passengers agree to hold these companies harmless for ANYTHING that happens on the ride.

    Since no regulatory official has ever been permitted to review the terms of Uber’s or Lyft’s own insurance policies, it’s practical to assume these companies can pick and choose which accidents they will cover.

    These circumstances could leave UberX and Lyft passengers COMPLETELY UNCOVERED by car insurance, if a ridesharing driver causes an accident. Drivers are at risk of losing everything if they cause an accident. Lyft drivers in
    California have reportedly been losing their nerve and quitting over these serious insurance concerns.

  • ClaimsAdjuster

    Uber says that it is providing transportation to “underserved areas” by that they mean Mercer Island, not Rainier valley.

    • Richard

      Or… East Capitol Hill… or Madrona (where ever that is). :) When they say Underserved they are NOT trying to imply they are offering charity service for neighborhoods/people who can’t afford taxis. Underserved just means… JUST that… areas that don’t get normal taxi cab traffic and where it’s otherwise very difficult to get a cab (be it by waiting on a street corner or even calling their horrible dispatch companies)

      • That Guy

        Ah, Richard, a Capitol Hill techno geek who doesn’t bother to get to know the city where he lives.

  • Eric

    Seattle must have learned from their problems in regulating for-hire and cab services, because they’re moving pretty damn quick here. I’m all for regulations as long as it’s fair, but I doubt the arrival of some new alternative mode of transportation in the city is going to make cab companies improve their service. The day I don’t get yelled at for trying to pay for a cab ride with a credit card, is the day I’ll know something is changing.

    • J.R. Neumiller

      Patronize the companies that give best service. Refuse those who don’t. Just because the industry is regulated doesn’t mean it can’t be competitive.

  • Tom

    Outside, for-profit corporations enter a local transportation market without obtaining any permits. (“We ask for forgiveness, not permission, ha ha.”) They poach customers from regulated taxi and limousine companies, then cry foul and roll out the lobbyists and lawyers when the local jurisdictions try to impose even the most modest of regulations. What entitles them to be exempt from regulation? Why should they be allowed to perform vehicle-for-hire operations without commercial registration and insurance for their vehicles? Why shouldn’t their drivers be subject to comprehensive fingerprinting and DMV background checks? Why shouldn’t their vehicles be inspected by an independent government watchdog agency? Why shouldn’t they have to field hybrid or other green vehicles? Why shouldn’t they have to serve poor communities, the elderly and the disabled? Why shouldn’t they pay the same fees and taxes as regulated taxi and limousine companies?

    • J.R. Neumiller

      Clap, clap, clap.

  • Tom

    Also, how many of the “12,000” Uber supporters cited in this article are from Seattle? Let’s make a generous guess and say 2%. Uber regularly generates what’s known as astro-turf emails whenever they get caught trying to cheat their way into a new market. Only a gullible idiot would fall for their public relations nonsense.

  • James Hawkins

    Eventually there is bound to be an accident followed by a big lawsuit. This type of legislation, if not worse, would happen then anyway. You can’t expect to move people around in vehicles without insurance and other requirements, and some admin cost to verify it. The opportunity for Uber, Lyft, Sidecar, etc., is to match available cars to fares. It would be a mistake to get hung up on some perceived entitlement to a different set of rules.

    I would not be surprised to see one of these break from the pack and concentrate on doing this for existing taxi companies. Seems like a timely pivot…

  • Mohamed Abdulrazak

    Drivers can join this Facebook Page: https://www.facebook.com/groups/582421028507502/

  • J.R. Neumiller

    The technology of phone apps is a winner, and the IDEA of every man a taxi hack is utopian in theory, but falls apart in reality. (Hey, I’m going across town. Maybe make a few bucks giving someone a lift.)

    What few have observed is that taxi driving is inherently risky business, and is one of the most dangerous professions anywhere. Taxi drivers are KILLED regularly, for their daily fares. That’s why so few want to respond to poorer neighborhoods where Johnny Ice is looking to score for his daily fix.

    People responding with a consumerist-only mindset are understandable, but blithely ignore behind-the-scene reality of the industry. All they are looking for is the cheapest/quickest – like going to Walmart – but discount the resultant capital erosion. If the local cab company cannot make as much as it can during peak periods, he won’t be around at off-peak times. He’ll be out of business.

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