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Lyft supporters gather at a City Hall rally in February.
Lyft supporters gather at a City Hall rally in February.

Seattle’s ride-sharing controversy just took an unexpected turn.

A coalition group has collected enough signatures to suspend a newly-passed ordinance regulating companies like UberX and Lyft, and now Mayor Ed Murray wants to work with all stakeholders to reach a new agreement.

The group, which received more than $400,000 in donations from Uber, Lyft and Sidecar, submitted more than 36,000 signatures today to the City Clerk’s office, more than double what was required (16,510).

The City of Seattle has a referendum process in place for situations like this, and if citizens can gather enough signatures — eight percent of the total number of votes cast for mayor in the last mayoral election (206,377) — newly-approved ordinances will be put on hold and then voted on by Seattle residents.

uberxCity officials confirmed to GeekWire this afternoon that the ordinance, which would have gone into effect later this month, has been suspended. The signatures still need to be certified, but that isn’t expected to be an issue. That means everything that the City Council agreed upon back in March — including the 150 cap on active vehicles per company, safety regulations, insurance requirements, etc. — is all put on hold. The ordinance also called for 200 taxi licenses to be added by 2015, which would have been Seattle’s first addition of licenses in 23 years.

This effectively puts everything back to square one. The app-based transportation companies like UberX, Lyft and Sidecar — which allow everyday drivers to shuttle people around town — will be operating in Seattle unregulated and, as the city previously said, illegally.

In a statement, Mayor Murray noted that these companies, the taxis and the for-hire companies “have all agreed to enter into a 45-day negotiation process to work toward a proposal that is acceptable to all the stakeholders and to City Council.”

UberX supporters wave posters during a City Council meeting in March.
UberX supporters wave posters during a City Council meeting in March.

“During this good-faith negotiations process, my office will work with the Department of Finance and Administrative Services to develop the enforcement protocols that the City will ultimately implement,” Murray said.

If a compromise is reached during the negotiation process, the City Council could repeal the ordinance and then work together on a new set of regulations. If that happens, the referendum would not appear on a ballot later this year.

There were questions about how the city defined this particular ordinance — either legislative or administrative. As detailed here, it’s an important distinction: Washington does not allow people to petition ordinances that are administrative in nature. But it appears that, based on the Mayor’s 45-day plan and city officials confirming that the ordinance is suspended, this is not an issue.

Both UberX and Lyft voiced disdain for the City Council’s decision in March and vowed to fight Seattle’s leaders for their right to operate with a limit in the city.

“I think the short answer is that the rules are designed to incapacitate Uber and make it unusable,” Uber CEO Travis Kalanick said last month.

Now, though, it looks like these startups will have a chance to either increase that 150-cap on active drivers, or completely remove it, as some City Councilmembers wanted.

A number of questions still remain. How will the Mayor conduct the negotiation process? Who will be involved? What will change?

We’ll update this story as we learn more.

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