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Council looks to tap the brakes on Seattle ride-sharing

Ride-share drivers using apps like Lyft, Sidecar and UberX to connect with passengers could soon face new city-imposed licensing and vehicle inspection requirements, if the City Council adopts regulations similar to the ones they discussed at a committee meeting on Thursday.

The council’s central staff will work to draft new “near-term” regulations over the next four weeks. If approved, the rules could also set minimum liability insurance requirements for the companies that run the apps. The prospect of limited regulation did little to placate the providers of traditional taxi and for-hire car services, who say their new competitors are getting a free pass from the city.

At the meeting, representatives from the council’s central staff and the Department of Finance and Administrative Services presented the council members with two near-term options for regulating ride-shares and three long-term options for regulating all of the city’s “taxi-like vehicles.” One of the near-term options would’ve completely stopped ride-sharing in the city, the other, which the council favored, allows it to continue with new restrictions. The council asked for near-term options because the full-fledged revision of the city’s taxi-like vehicle regulations, which the council is currently debating, will take months to craft and approve.

While the members of the Committee on Taxi, For Hire and Limousine Regulations agreed that they would not shut down the ride-share companies, the contentious debate about how exactly to regulate the evolving app-based businesses remains far from resolved.

“I just don’t see how it works,” said Councilmember Bruce Harrell.

“I don’t really like the notion, the wide open notion, of how we’re treating ride-shares,” he said. “I think we need to restrict them more.” Harrell was the most vocal supporter of imposing a cap on the number of ride-share vehicles. “If you’re issuing a finite number of taxi and for-hire licenses, it doesn’t make sense to allow ride-shares to keep doing what they’re doing,” he said. The council’s central staff did not include a ride-share cap in the near-term regulatory options and it is unclear whether it will be part of the rules they draft in the coming weeks.

Committee chair Sally Clark and Councilmember Mike O’Brien both seemed inclined to allow the ride-share companies to continue operating, if they and the drivers using their apps adhere to city-mandated licensing, safety and insurance requirements.

Uber’s general manager in Seattle, Brooke Steger, said the company is open to working with the city on new regulations. “It’s perfectly reasonable for there to be a specific driver’s license,” she said, adding that if the city hired more inspectors to cut down on wait times, the company would cooperate with city-specified vehicle inspections. She also said Uber opposed a cap on ride-share vehicles. “As we’ve seen with taxis,” she said, “that’s not an environment that benefits small business owners.”

UberX driver Elias Guda said he would be willing to get a for-hire license, “If that’s what I have to do to keep paying my bills, or buying diapers for my kid.” Guda said he was unemployed from 2011 until he started driving for UberX last July. He said that after signing up to use the app he bought a $30,000 2013 Toyota Prius and that he likes driving because the flexible hours allow him to attend community college and to spend time with his three daughters. “If I have to make small changes, that’s better than when they say they just want to shut it down,” he said.

Licensed for-hire drivers were displeased with the outcome of the meeting. “It’s bullshit,” said Walelegn Balcha, who has worked as a for-hire driver for three years. “This is our livelihood.” Balcha said he pays $450 each month for a commercial insurance policy and $1,050 annually for his for-hire vehicle license. He says he can’t compete with drivers using personal auto insurance and unlicensed vehicles.

As they consider long-term policy changes, the councilmembers are debating whether to allow for-hire vehicle owners to convert their vehicle licenses to taxicab licenses. The switch would allow the drivers to pick up riders who hail them on the street and to charge metered fares. Under current city laws, for-hire drivers charge flat rates and all of their fares need to be pre-arranged. The number of taxicab vehicle licenses in Seattle is currently capped at 688.

Balcha said if given the chance, he would trade his for-hire license for a taxicab license, but even then he said he would want to see restrictions imposed on the number of ride-share vehicles.

Taxi industry advocates were also unhappy with the council. “O’Brien wants to say any jackass can get into a vehicle and go drive,” said Chris Van Dyk, a lobbyist for BYG Taxi Cooperative.

“It’s total deregulation,” he said.

Samatar Guled agrees. Guled moved to Seattle from Somalia 23-years ago. He drove a cab for 7-years, but when he couldn’t find an available vehicle license he teamed up with 55 other taxi drivers and started a for-hire company. The company, Eastside For Hire, now operates 270 cars. “We established ourselves and worked hard to create a business,” he said. “We played by the rules. Everyone should be competing on the same level.”

Grievances aside, the new rules, if adopted, should narrow the regulatory gap between traditional taxi-like vehicles and ride-shares. In addition to licensing, inspection and insurance standards, the new near-term regulations could also introduce new fare disclosure requirements for ride-share companies and centralized storage spaces for items lost in ride-share vehicles. The long-term regulations are a complicated mix of rules that cover topics spanning across the entire industry — like limiting the colors and advertising on for-hire cars so customers don’t confuse them with taxis and establishing a new penalty system for current taxicab license holders who lease their licenses to cabbies at inflated prices.

Early in the meeting, O’Brien emphasized that the options the committee considered Thursday were far from finalized policy. “These are starting spots so we can hear comments on different aspects,” he said. “It’s a complex industry for sure.”

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