Trending: Convoy raises $62M from Bill Gates and other luminaries to transform trucking industry with technology

councilrideshare1212
UberX supporters hold signs at a City Council meeting on March 17.

UberX, Lyft and Sidecar will need to play by Seattle’s rules if they want to operate in the Emerald City.

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

The Seattle City Council today voted 9-0 to enact new legislation that will limit the three app-based transportation network companies (TNC) to 150 drivers on the road at any given time. The same goes for any other new startups who employ everyday drivers to shuttle people around town.

Here’s a recap of what went down today, what stakeholders are saying, and what’s going to happen from here:

What happened today: The Council already met on Feb. 27 at a subcommittee meeting where it voted 5-4 on the proposed ordinance. Today’s vote makes that official. Mayor Ed Murray cannot veto the vote since there were at least six “yay’s,” and once he signs the bill, it will take effect 30 days from now.

There were also several amendments approved, the most important of which forces the TNCs to abide by the state’s requirements for commercial insurance. There was another amendment that prevents TNCs from creating spinoff companies — Uber cannot create an UberY, UberZ, for example.

lyft-pinkWhat the Council said: Three councilmembers were in favor of an amendment proposed today by councilmember Tom Rasmussen that would have lifted any sort of cap on the TNCs. But only Sally Bagshaw and Tim Burgess gave their approval, while the other six councilmembers wanted caps.

Bruce Harrell, who sat on the Committee on Taxi, For-Hire and Limousine Regulations and has always been in favor of capping the TNCs, asked citizens not to look at the legislation as a “cap.”

“The headline should not read that the City Council capped anything. It should read as the City Council allowed ride-shares to come into an industry,” Harrell said. “The bill sets up a conceptual framework for us to start stepping out of the regulatory arc and let technology and consumer choice dictate what we’re about to do. But we are not there yet.”

Sally Clark, who chaired the committee, noted that “what we decide today isn’t a complete fix, but it is a start.” Harrell said something similar, adding that “we’re still missing the mark on a few key issues, but this is about as good as it’s going to get.”

Rasmussen said that while he thinks there should be no caps — “let’s not cut supply when demand is so high,” he noted — he liked the improvements that were made from the original bill. Moreover, Rasmussen said that taxi drivers now have an opportunity to improve their service.

“This is a wake-up call for taxi industry,” he said. “It has to change in order to thrive. Now you have time to do that.”

Eastside For-Hire manager Samatar Guled speaks to Mayor Ed Murray during a rally last month in support of ride-sharing startups.
Eastside For-Hire manager Samatar Guled speaks to Mayor Ed Murray during a rally last month in support of ride-sharing startups.

What the taxi industry thinks: Dawn Gearhart, who represents the Western Washington Taxicab Operators Association, told us that the reaction was mixed from her camp. She was happy that the ordinance includes an addition of 200 taxi licenses over the next two years, but shared concern with how the 150-cap gives power to the companies and not the drivers.

“Drivers should have the authority to decide if they will work or not,” she said. “Putting that authority in the hands of the TNC companies means drivers’ leverage is diminished, and so is their job security. It’s unfortunate for a city this progressive.”

Gearhart also hopes that certain longstanding regulations for taxi drivers can be lifted to allow for innovation.

“They are still under an enormous set of Byzantine regulations,” she noted. “The law says they can only wear bermuda shorts, says that their beard has to be trimmed, says that they have to provide a printed receipt. None of these things open the door for innovation in the taxi industry.”

Eastside For-Hire manager Samatar Guled, who attended every single subcommittee meeting for the past year, said he’s just happy the city finally decided to do something.

“This is a great day,” he said. “Now everyone has to compete on a level playing field. We’re not happy with everything, but overall this is a good legislation.

Guled also shared disdain for the Council’s 150-cap.

“I don’t know how the city will enforce the cap,” he said. “What happens after the Mayor signs this — are the companies going to respect the law, or are they going to ignore it, just like they’ve done all this time?”

uberxsaveWhat the TNCs say: 

Michael Cambern, a full-time driver for UberX, isn’t so sure about Guled’s claim about a “level playing field.”

“We’re limited to 150 and there are already 600 taxis on the road with 200 more coming. That’s not a level playing field,” he said. “You’re not going to see the true numbers of which one is more favored by the public or see how that plays out. In order to do that, you need to have the same numbers on the road or at least give us more of a fighting chance so we can prove what we can do.”

In light of the Council’s concern over insurance policies, Uber Seattle General Manager Brooke Steger told us that her company is in favor of everything that has to do with the safety of drivers and passengers. But she doesn’t understand why, despite thousands of people voicing support for the TNCs, the Council elected to enforce a cap. 

“In terms of limiting innovation and allowing certain industries to catch up, that’s not where we should be — especially in Seattle,” she said.

Steger said that Uber will “absolutely keep fighting” the approved legislation.

In a statement, Lyft spokeswoman Erin Simpson called today’s legislation “a protectionist move that only serves the existing taxi and for-hire industries.”

“These caps have no bearing on public safety, and the motivation behind these measures was planned behind closed doors,” Simpson said. “This vote makes Seattle the only city in the country to impose a cap on peer-to-peer transportation. In doing so, the Council is disregarding the voices of thousands of citizens who spoke out in opposition to these restrictions, and is crushing new economic opportunities for Seattle residents who have chosen to provide rides to their neighbors.”

What happens next: It’s unclear when Mayor Murray will sign the bill, but expect the new laws to take effect in the next few months.

TNC passengers will likely see a decrease in available rides during busy times, especially given that there are approximately 3,000 TNC drivers in Seattle. TNC drivers will now have to compete with fellow drivers of the same company for working hours even more than they currently are. It is unclear how exactly the city will monitor each company to ensure that they have no more than 150 drivers on the streets at once. The companies will also have to implement new software into their apps to abide by the new regulations.

You can expect Uber’s marketing machine to continue humming along until Murray signs the bill. Lyft, meanwhile, announced plans last week to expand service around the Seattle region.

The City will have an employee monitoring this “pilot program,” and expects that person to report his or her findings to the Council if changes must be made — particularly in regard to the 150 number.

It will be interesting to see if the state of Washington takes any action. A state representative told us that even though Washington could override anything Seattle puts into place, the state is taking a more wait-and-see approach to the matter.

Related coverage:

Like what you're reading? Subscribe to GeekWire's free newsletters to catch every headline

Comments

Job Listings on GeekWork

Find more jobs on GeekWork. Employers, post a job here.