Rep. Cyrus Habib D-48
Washington state representative Cyrus Habib.

One Washington state politician thinks Seattle is making a mistake with its plan to place caps on app-based transportation startups, and plans to introduce his own statewide legislation to regulate these companies.

Cyrus Habib, a Democrat who represents the 48th district and sits on the state’s transportation committee, told GeekWire that he agrees these startups should be regulated with rules like mandated commercial insurance policies, background checks and driver training requirements to ensure passenger safety.

But as far as limits go, he does not agree with what the city is doing.

“Artificially capping rideshares serves absolutely no public interest,” he said. “It simply replicates the scarcity found in the traditional taxicab industry, which frustrates each and every one of us who has waited out in the rain for that ever elusive taxi.”

His comments come as the Seattle City Council prepares to enact regulations that will limit, to 150, the number of drivers that companies like UberX, SideCar and Lyft can have on the road at any given time. [UPDATE: The scheduled vote has been postponed a week, to March 17, because a councilmember will be out of town and unable to participate.]

UberX supporters wave posters during last week's City Council meeting.
UberX supporters wave posters during last week’s City Council meeting.

Here’s what Habib proposes: Abandon caps for both taxis and companies like Lyft, which would initiate a “race to the top.” He’s also in favor of easing regulatory mandates on traditional taxis, like fixed meter rates, to level the playing field for all.

“Then consumers could choose, and players in all facets of this industry could benefit,” Habib explained. “Think about it: When has capping supply ever made sense? How absurd would it be if the Seattle City Council were to calculate dining demand and then only issue a fixed number of restaurant licenses? Caps are simply the wrong approach.”

Habib added that he hopes Seattle considers a policy approach that “promotes healthy and vibrant competition.”

“The techniques these ridesharing apps are pioneering, such as real-time accountability and smartphone GPS-tracking, are already beginning to take hold in the traditional taxicab industry,” he said. “That sort of innovation should certainly be encouraged in any new policy changes the city adopts.”

lyftrallyHabib, who has been legally blind since age 8 and was the first Iranian-American elected to state office in the U.S., noted that there are many ways to both allow ride-sharing companies to exist freely and also help cab drivers compete more effectively. For example, one of his recently-passed bills helps cab drivers reduce insurance costs.

“Let’s help our traditional cab drivers by addressing their actual needs, rather than turning our backs on the future,” he said. “As urban residents increasingly adopt car-less and ‘car-light’ lifestyles, there is more opportunity than ever for drivers to earn a living wage. Meanwhile, consumers, including those like myself who are unable to drive, receive better service, more choices, and lower prices.”

As far as the state’s involvement in all of this, Washington is taking somewhat of a wait-and-see approach with Seattle’s pilot program. While the state could technically impose laws that override anything Seattle has in place — similar to what the state of California is doing — Habib doesn’t think Washington would do something like that.

“The purpose here is to address state issues, such as the intersection between personal and commercial liability insurance, which cities are not in a position to do,” he said. “The City of Seattle is a key partner and will be at the table as we examine these issues.”

For now, legislators in Olympia will begin conversations with stakeholders to examine topics such as insurance, licensure and other issues. Habib said he plans on introducing legislation on this issue in the 2015 session and hopes to have addressed most of the challenges facing all stakeholders by mid-2015.

“There is a win-win to be had here,” Habib said. “The only question is: Are we ready to seize the opportunity?”

Comments

  • http://startuplawblog.com/joewallin Joe Wallin

    Cyrus, great comments/thoughts/idea. Real leadership. Thank you.

  • this_bureaucrat_has_a_job

    bonus points for the most random yearbook photo ever…the FBI ageny sunglass + suite look.

    • jettcity

      Try actually reading the article (and using spell check). He is blind.

  • Cameron Newland

    I couldn’t agree more with Cyrus. Seattle’s City Council is behaving recklessly by restricting ridesharing. I have difficulty walking nowadays due to an injury and often rely on UberX to get from place to place, and cabs are more expensive and provide worse service. I don’t know what I would do without UberX, and I am not alone in my sentiments. The City Council should be trying to give us more transportation options, not restrict them.

    • http://startuplawblog.com/joewallin Joe Wallin

      I agree Cameron. The Council needs to take into account the large community of folks who don’t or can’t drive for one reason or another.

    • ClaimsAdjuster

      Of course UberX is less expensive. It is cutting corners on insurance, licensing, and taxes. It is just like Amazon gaining competitive advanatge for years over its brick-and-mortar competitors by getting a sales tax exemption.

      It is no accident that Jeff Bezos is funding Uber. He has lots of experience at regulatory arbitage.

  • ClaimsAdjuster

    Representative Habib should do his job and get the legislation passed that mandates that UberX/Sidecar/Lyft vehicles in the state carry commercial insurance and a Washington for hire license. Then he can find out what the TNC drivers actually think about caps. After shelling out $5K for insurance + 0.55 /hr for L&I + taxes + license fees, the TNC drivers will look at caps in a new light.

    Oversupply is not a race to the top, Representative Habib. It is a race to the bottom.

    • Guest

      Of course it’s not a race to the top. I want my rides to be cheaper. Please get out of the way, lest you be crushed by falling prices.

  • clibou

    Taxis outside Seattle City are very expensive. Cyrus approach is a win for Washington State.

  • russroberts

    Whoa! Sound economic theory supported by historical data. Am I still in Seattle? I’m uncomfortable. Let’s commence a 4 year long tax payer funded study and then not make a decision.

  • ClaimsAdjuster

    The bill that Representative Habib sponsored in the House that the article characterized as helping “cab drivers reduce insurance costs” eliminates mandatory Workmen’s Compensation coverage.

    Cab driving is one of the most dangerous occupations in the USA due to the risk of accidents and crime. What Habib has done is transfer the tab for injured drivers from the cab industry to the state and local goverrnments.

  • Marco

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  • Guest

    Thanks, Cyrus. After the technocrats take the government offices that are rightly ours, we will keep you on transpo. Great move from a great man.

  • ClaimsAdjuster

    If the disabled community thinks that Rep Habib is an advocate for their interests because he is blind, nothing could be further from the truth.

    “Artificially capping rideshares serves absolutely no public interest” says Habib. In San Francisco where there are no caps on the TNCs, the streets are now congested with 4,000 TNCs mostly congregating near the downtown clubs. But they are not transporting the disabled because there are no TNC wheelchair vans. The taxi vans that were providing that service are now sitting because the trained drivers that were operating them have abandoned their cabs to set up their own TNC businesses. As a result, the number of wheelchair van trips has plummeted from 1,800 to 600 per month.

    The San Francisco Board of Supervisors is now looking at the Seattle model of capping the TNCs to prevent the undermining of the regulated transportation market, which is accesible to everyone – not just to abled bodied yuppies with credit cards and smart phones.

    http://sfappeal.com/2014/03/its-really-starting-to-be-a-free-for-all-out-there-sf-supes-hear-harsh-words-at-ridesharing-hearing/

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