UberX, Sidecar, Lyft driver caps become focus of rideshare debate

At least five councilmembers favor limiting the number of app-based drivers who can use their personal cars. Three others and the Mayor aren't convinced.
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Rideshare companies catch a break with Mayor Murray's new plan.

At least five councilmembers favor limiting the number of app-based drivers who can use their personal cars. Three others and the Mayor aren't convinced.

Driver caps have emerged as one of the final sticky issues in the Seattle City Council’s effort to craft ridesharing regulations. With a committee vote looming, councilmembers disagree about how many Lyft, Uber and Sidecar drivers should be allowed to use their own vehicles to pick up passengers.

The full council is considering a draft ordinance that would limit the number of rideshare drivers using personal vehicles to 300. Five council members support some type of cap. Three members and Mayor Ed Murray do not. The ordinance also allows for-hire drivers with commercially licensed vehicles, like taxis, to use the apps. This means that roughly 900 cabbies and flat rate drivers could potentially work with companies like Lyft, Uber and Sidecar. How many would actually do so remains unclear.

“Ultimately we might have to see a compromise,” said councilmember Sally Bagshaw, who opposes the proposed limits, saying they would stifle innovation and reduce the city’s transportation options.

The ordinance would create a rideshare pilot program that ends on June 30, 2016. The legislation refers to ridesharing services as Transportation Network Companies, or TNCs.

The ridesharing debate has been stewing in the council for nearly a year now. Cabbies and flat rate for-hire drivers say TNC drivers compete for their customers while enjoying lower insurance rates and fewer regulations. The TNCs argue that driver or vehicle caps will hinder their business model and could cause them to shut down in Seattle.

All nine councilmembers attended Friday’s Committee on Taxi, For-hire and Limousine Regulations meeting. They chose not to vote on an amendment introduced by committee chair Sally Clark that would have doubled the TNC driver cap to 600. Clark, along with committee members Bruce Harrell and Mike O’Brien, would like to see limits on the number of TNC drivers using personal cars. Nick Licata, according to a staffer, backs a cap. Jean Godden voiced support during the meeting for one between 300 and 600.

O'Brien likened the limit on ridesharing drivers to past legislation that required food trucks to park minimum distances away from existing restaurants. And because many taxi and for-hire drivers are from minority and immigrant communities he doesn’t see how the council could allow the rideshare companies to operate as they do now, “without violating and undermining all the work we do on race and social justice.”

“I support creating space for innovation,” said O'Brien at the meeting, before noting that he backs the 300-driver cap for personal vehicles. “I’m very flexible on looking at, within the pilot, adjusting that number.”

Like Bagshaw, Tom Rasmussen and Tim Burgess don't favor driver caps. Although in a Friday afternoon blog post Burgess seemed flexible and said if a council-majority favors limiting the number of drivers, he could back Clark’s amendment that raises the cap to 600.

Rasmussen doesn't “see any compelling reason,” for caps, arguing that the apps provide a way for people like students and retirees to make extra money. “The problem that we have is that we’re just picking numbers out of the air.”

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The numbers issue is longstanding. Committee members have complained that the TNCs will not say how many drivers use their apps in Seattle, which makes it difficult to gauge demand. “I don’t know how to have [the cap] be anything but arbitrary when we have zero information,” O’Brien said. (Kshama Sawant did not weigh in specifically on the cap issue during the meeting and did not return a call asking for comment.)

While Mayor Murray is not a cap fan, his main concerns, said a spokesperson via email, are about safety and insurance. Asked if the mayor would veto legislation that includes caps, the spokesperson said: “The Mayor has not considered a veto at this point.” Six council votes in favor would make the legislation veto-proof.

In between posing for photos with Lyft drivers during a rally outside City Hall on Wednesday, the company’s co-founder and CEO John Zimmer said he’d like to see a council bill without any restrictions on the number of drivers or vehicles. Uber’s general manager in Seattle, Brooke Steger agreed. “We’re already having a hard time meeting demand,” she said. “It’s ridiculous for them to look at caps at all.”

In recent weeks, it was TNC insurance, not caps, that became the flashpoint for the council. On Friday, no council members expressed specific concerns about the insurance rules now included in the ordinance.

Uber, Lyft and Sidecar offer $1 million liability insurance policies to cover damages if a driver using their app has a wreck. This insurance is designed to pay for claims that a driver’s personal liability insurance will not cover. Most insurers consider personal auto insurance void if a driver is using his or her car to transport passengers for money.

The companies have said that their $1 million policies apply from the time drivers push the button on their phones to accept a passenger until the time the ride ends. The ordinance says the insurance policies should apply for any driver who is active on a TNC’s system. So a logged-in driver, who is cruising around waiting for a rider, would have to be covered.

On New Years Eve, an UberX driver in San Francisco who was not carrying a passenger hit and killed a six-year-old girl. Her parents have filed a lawsuit against the driver and the company. The suit claims the driver was logged into the app at the time of the accident.

Seattle's proposed rules also require TNCs to have underinsured and uninsured motorist coverage. This type of coverage would kick in if a TNC driver gets into a wreck with another motorist who is at fault but has no insurance, or not enough insurance to pay for all the damages. The city requires taxis and flat rate for-hire vehicles to carry this kind of insurance. Lyft added the coverage to its liability policy earlier this month and Uber added it last December. Sidecar is working with its insurer to comply as well, according to a company spokesperson.

Councilmembers and staffers say they've been asking — for months and, so far, in vain — to get copies of the $1 million liability policies from the TNCs. Representatives for the companies have said their polices are proprietary information. Under the draft legislation, the city's Director of Financial and Administrative Services would have to review the TNC's policies. At last week's rally outside City Hall, Lyft co-founder Zimmer (below) seemed ready to share his company’s policy. “It’s in my bag right now,” he said. Zimmer also took a swipe at those who question the reliability of the coverage. “How could we be doing millions and millions of rides without insurance? It just doesn’t make sense. It’s like a birther argument.”

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The council did approve one TNC-favored amendment on Friday, when it struck a rule from the proposed ordinance that would’ve restricted hours for some TNC drivers to 16 per week. In the process, councilmembers also added language that requires all TNC, taxi and flat-rate drivers to attend the same training.

The legislation would also add 75 taxicab licenses to the 688 currently in circulation and allow dispatched flat-rate cars to pick up hails off the street. Councilmember Bagshaw said she'd like to raise the number of added licenses from 75 to at least 100. 

As usual the council chambers were packed for Friday's meeting. Taxi drivers waved “KEEP THE CAP!!!” signs. Rideshare drivers sported “Uber Opens Doors” tee shirts and assorted pink moustache paraphernalia.

The City Council committee vote on the ordinance is scheduled for Feb. 27.

Taxi meter photo courtesy of Dan is awesome/Flickr.

  

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