Councilmember Mike O'Brien.
Councilmember Mike O’Brien speaks at Monday’s meeting.

Transportation startups like UberX, Lyft, and Sidecar will finally be able to legally operate in Seattle.

The City Council today voted 8-1 to approve legislation that provides a new regulatory framework for the San Francisco-based startups, also known as transportation network companies (TNCs).

Monday’s vote ends a 15-month process that saw the city originally approve laws in March that placed a cap on the TNCs. However, the original ordinance was suspended in April thanks to a coalition group — one that has received more than $1 million from Uber and Lyft — which forced Mayor Ed Murray to bring together stakeholders from all involved parties to work on a new deal.

After nearly two months of discussions, an agreement was reached in June that removed a 150-vehicle cap for each company, established revised TNC insurance requirements, gave more rights to for-hire companies, set a 10-cent surcharge on each ride to fund wheelchair-accessible taxis, and added 200 taxi licenses over the next four years.

uberxWith the addition of amendments that were passed today — except amendments “J,” and “K,” — the new agreement is essentially what will become law in Seattle.

“I’m excited that once again, Seattle is taking the lead to show how we can adjust to the very rapidly-changing world of technology,” Murray told GeekWire.

Murray noted that Seattle isn’t a city where you can always walk on the street and find a cab.

“This is a city where folks want options other than to drive their own car,” Murray said. “By increasing the number of for-hire vehicles — whether it’s a taxi or TNC — it’s a win for Seattle.”

The only “no,” vote on Monday came from councilmember Mike O’Brien, who several times voiced concern that the city needed more time to establish regulation for the TNCs.

“We have a number of amendments before us today and what’s become apparent to me in the past couple weeks is that this bill is a very complex piece of legislation with lots of policy implications that we have not have the chance to properly vet internally and publicly to understand implications,” O’Brien said.

To start the council meeting, O’Brien sponsored a motion to push the proposed ordinance back to the Taxi and For-Hire Committee for further analysis. However, that failed 7-2.

council212Then O’Brien introduced amendment “J,” which would have required the TNCs to provide exclusive insurance coverage at all times while a driver is active on the app. He expressed worry with the potential “gap” — when TNC drivers are logged into their apps, but not picking up or dropping off a passenger.

O’Brien, who said he had a letter from insurance experts that supported his amendment, alluded to the six-year-old who was killed last year by an Uber driver in San Francisco and noted that he didn’t want to have the same problem occur in Seattle.

“I’m not against innovation, and I’m excited about the product that the TNCs are bringing and excited about the competition that’s going to happen,” O’Brien said. “But I want to make sure that the public is not at risk while we figure out how this works.”

Sally Clark, a councilmember who headed up the Taxi and For-Hire Committee — which O’Brien also sat on — said she appreciated O’Brien’s concern. But Clark also noted how the TNCs agreed to up their insurance standards during the mayor’s negotiation process for that “gap” to meet minimum commercial insurance requirements that the state requires.

The amendment was voted down 5-4, with Clark, Sally Bagshaw, Jean Godden, Tom Rasmussen and Tim Burgess all voting “no.”

Cyrus Habib.
Cyrus Habib.

Uber Seattle general manager Brooke Steger said after the meeting that O’Brien’s stance “represents a fundamental misunderstanding about how insurance works.”

“There will never be a time when anyone has less than $300,000 of insurance coverage,” Steger said. “That is what the city and state dictate as necessary.”

Cyrus Habib, a Democrat who represents the 48th District and sits on the state’s transportation committee, was at the meeting and spoke during the public comment portion. Habib, who has convened a stakeholder group to address the issue of commercial insurance for TNC drivers at the state level, urged the council to pass the legislation without making changes to the insurance requirements.

“If the council would have done something today on the insurance other than what is already in the ordinance, it would have jeopardized a good faith process that will lead us to a state fix,” Habib told GeekWire. “It would have also created a false sense of security in the public because insurance is a state law issue.”

Habib, who voiced his frustration with the original cap back in March, said he plans on introducing a proposal for state commercial insurance regulations designed for TNC drivers in time for the next legislative session in January. Seattle’s new TNC regulations have set insurance rules for a “provisional period,” that lasts until the next legislative session.

Mayor Murray now has 30 days to sign the new legislation and enact it into law. You can read more about what’s happened in the last 15 months from our report from earlier today, or check out what happened during today’s meeting with our live blog from City Hall.

Finally, here’s a statement from Lyft on today’s decision:

Seattle has long been a leader in embracing innovative technology, and today’s vote to authorize ridesharing recognizes that regulations can be modernized to allow new industries to thrive while maintaining the highest level of public safety. We’d like to thank the Council and Mayor Murray for supporting a solution that preserves modern, affordable, and convenient transportation options for residents across the city.

The progress made today truly belongs to the tens of thousands of Lyft Seattle community members who have spoken up over the past few months in support of ridesharing; sharing their stories, enthusiasm, and belief in a transportation movement built by Seattle residents for Seattle residents. The passage of today’s ordinance is an important milestone for the ridesharing movement and we are excited to see the Lyft community in Seattle grow and thrive for years to come.

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  • Jason Gerard Clauss

    Let freedom ring!

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  • Guest

    Mark it on your calendar — this is the day taxis in Seattle started to vanish. Every single taxi company should convert to become a so-called TNC. If they don’t, they are stupid. TNCs have less fees, less insurance required, and less regulations.

    The Uber folks are straight up lying when they say that their drivers will always be covered. The insurance companies have said clearly that they will not cover drivers when they are working, and it is a lie to say that they are not working when they are waiting for a fare. They’re not just hanging out — they’re working! If somebody has a “fundamental misunderstanding about how insurance works,” it is Brooke Steger. Let’s hope nobody dies between now and January when the state might start working on legislation.

    It is a sad day indeed for Seattle when the power of bubble money from California has outweighed common sense. It will be sadder when all the old taxi companies are gone and all the new taxi companies fail because there’s not as much money in it as they thought.

    • YNWA

      Just curious. What taxi company do you work for exactly? Please educate yourself on the insurance that Lyft and Uber carry for their drivers. They carry full commercial liability policies as umbrellas for anything private insurance doesn’t. Even if a private insurance company fully declines their claim these umbrella policies will pick up the tab.

      • Guest

        I don’t work for any taxi company, never have, and never will. I’m just a customer. But I’ll guess you work for Lyft.

        Lyft and Uber are lying, plain and simple. They cannot claim that the driver’s personal non-commercial coverage is primary when those insurance companies have been very clear that they do not cover the vehicles when the drivers are working. While it might be convenient for Lyft and Uber to narrowly define when a driver is working, common sense says they are working when they are waiting for a fare. Otherwise, they’d be home or out partying. Nobody just hangs out in their car downtown just for fun. Claiming otherwise is a fraud on drivers, consumers, and potentially their own insurance companies.

        On top of that, Uber has specifically disclaimed liability in the case where the young girl was killed in San Francisco. So much for “full coverage.”

      • Anon Techie

        Here’s a simple regulation Seattle can enact:

        Require TNCs like Uber, Lyft and SideCar to have the drivers show proof of informing the private insurance company about their intent to drive for a TNC.

        If private insurance company doesn’t approve, TNCs should cover without the need to get a denial from personal insurer first.

        It is that “if personal insurance doesn’t cover then we cover” clause that f’s up the drivers and the riders in the event of an accident.

        Since most of these TNC drivers are low income types, they cannot afford to take on these 18 billion dollar behemoths in the court of law. Hoping to see some sensible regulations about insurance for the occupants of the car as well as those on the streets (like the one in case of Uber driver’s accident that killed a kid in SF)

  • Guest

    Hooray! Taxis as we know them are dead. Long live the.

  • Jonathan Bowen

    A $0.10 surcharge on each ride for wheelchair-accessible taxis is ludicrous!

    • guest

      Yup. It should be higher to reflect actual costs of making sure that Uber and Lyft aren’t marginalizing this vulnerable population. If one of these companies will guarantee that they will serve the wheelchair population, then they shouldn’t have to pay the surcharge.

      • Jonathan Bowen

        Über and Lyft are private companies and shouldn’t have to guarantee anything. I stand by my statement that paying a surcharge of any kind to help support taxis is absolutely ridiculous.

    • Anon Techie

      why not 1% surcharge? if TNC makes money by %age of fare+tip, surcharge should also be %age, no?

  • guest

    Are Uber and Lyft still illegal in Bellevue, Tacoma, Seatac, etc?

    • YNWA

      They never were illegal. Just Seattle decided to regulate them. Other areas have not.

      • Guest

        If they break the law (and they do on the Eastside, Tacoma, etc.) then they are illegal. See section 6.64 here to see the laws that the new taxi companies think don’t apply to them. The fact that King County hasn’t gone after them yet doesn’t make them legal.

        If you read the news, you’d find that these companies have been breaking laws not only across the country but around the world. They think building an app exempts them from the law. Seattle’s mistake in legalizing them does not make them legal elsewhere.

        • Guest

          Sorry, you don’t get to determine who’s breaking the law. Call the police when you think section 6.64 is being broken. If they prosecute, you’re right. If they don’t, you’re wrong.

          You’re wrong.

  • Marie @RideShare Guy

    Good to know that UberX, Lyft, and Sidecar will finally be able to legally operate in Seattle. What are other cities that they are still illegal?

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