Seattle To Regulate Rideshare Companies

By | March 19, 2014

See related story: Uber Announces New Policy to Cover Gap

The Seattle City Council passed a measure Monday that puts some regulations on rideshare companies that use smartphone apps to connect passengers with rides from drivers using their personal cars.

Passed by a unanimous vote, the City Council ordinance caps the number of rideshare cars on the road to 150 per company, meaning the three currently operating companies in Seattle could have 450 such vehicles on the road at any given time. The companies would also have to be licensed, but not the drivers, and insurance would be mandatory.

Politicians in Seattle and throughout the country have been attempting to regulate fast-evolving “transportation network” companies such as Uber, Lyft and Sidecar. Using the services, people can have a ride within minutes just by touching a few buttons on a smartphone or tablet, a system many users say is more reliable than hailing a cab or calling taxi company operators. Payment is done through the app.

Lyft Driver (AP Photo)
Lyft Driver
(AP Photo)

Because the firms have been unregulated, taxi companies have seen that as an unfair advantage. In Seattle, the startups have been outright illegal because they are not licensed.

The City Council proposal includes bumping up the number of taxi licenses for the city by 200 over the next two years.

Seattle City Councilmember Sally J. Clark, chair of the Committee for Taxi, For-Hire and Limousine Regulations, said while the resolution is not a complete fix, it’s a start.

“Customers want more choices and better service,” she said. “TNC vehicles will now become a legal choice with appropriate driver, vehicle and insurance safeguards.”

Uber Seattle General Manager Brooke Steger, who before the vote asked the City Council to eliminate the caps, said doing so means current drivers will lose their jobs.

“It’s astounding that that the City Council has chosen to ignore the voices of nearly 30,000 constituents and move to put hundreds of drivers out of work, she said in a statement. “This fight is not over, and as we explore our options, we urge Mayor Murray to reject the anticompetitive and arbitrary caps that will slingshot Seattle’s transportation ecosystem back into the Dark Ages.”

An amendment that would have eliminated the caps, introduced by Councilmember Tom Rasmussen, failed.

Yohannes Sium, an attorney representing Seattle-King County Taxicab Owner Alliance, said previously that taxi companies are already seeing consumer shortages as rideshares expand. They said the plan doesn’t level the playing field on regulation and fees, including requirements to pay for commercial insurance.

Drivers pay between $4,000 and $9,000 a year to be insured, said Dawn Gearhart of Teamsters Local 117.

Seattle Mayor Ed Murray said in a statement that he intends to sign the legislation but plans to direct staff to engage stakeholders and experts outside city government in further discussions.

“I remain concerned about the need to level the regulatory playing field for taxis generally, which includes issues of training, fees, rates, use of technology and latitude for innovation,” he said. “And I remain concerned about the issue of caps on rideshare vehicles, which I believe is unreasonably restrictive and unworkable in practice. These issues remain unresolved, and we need to move quickly to fully and satisfactorily address them.”

The measure comes after about a year of lobbying, rallies and meetings on the topic. After a year in effect, the City Council will be able to revisit the cap on the number of vehicles allowed and could adjust or even lift the cap entirely at that time.

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