City panel expected to endorse caps on ride-sharing services
A Seattle City Council committee Thursday is expected to endorse limiting to 300 the number of driver permits for businesses such as Lyft, UberX and Sidecar.
Seattle Times staff reporter
What the proposal would do
At 4 p.m. Thursday, the Seattle City Council’s taxi-regulations committee is scheduled to vote on a proposal to regulate the so-called ride-sharing services of Lyft, uberX and Sidecar. It would:
• Cap driver permits at 300 for two years for such companies.
• Require drivers to pay for driver and safety training as well as licensing.
• Require a company to pay the city $50,000 a year initially, and then either that or 0.35 percent of its revenue — whichever is higher.
After almost a year of debating how Seattle should regulate the so-called ride-sharing services of Lyft, uberX and Sidecar, a City Council committee is expected to make a key decision Thursday toward regulating their usage.
The council’s taxi committee is expected to endorse restricting the number of driver permits to 300 in a two-year pilot that would allow the city to further assess how the ride services, which use phone apps to dispatch drivers, should operate safely in the city, while giving existing taxi and for-hire companies a chance to catch up technologically with their own apps.
All three companies say that if the full City Council ultimately approves the proposed cap for companies like theirs, their ability to operate in Seattle will be obliterated.
The debate has drawn an eclectic crowd since it first started simmering at the beginning of 2013. It started with taxi and for-hire drivers — many of them immigrants from India and East Africa — claiming that the city was giving the illegal and unregulated drivers a free pass while taxi and for-hire drivers were still required to abide by strict regulations and pay hundreds of dollars in fees every year.
The type of smartphone-savvy customers who have made Lyft’s furry, pink grille mustaches ubiquitous on vehicles throughout King County fought back, saying the innovative dispatching apps have improved customer service in the passenger-pickup industry. A city-commissioned study backed up those claims last summer when it found that demand for passenger-pickup service in Seattle was growing largely because of the entrance of Lyft, Sidecar and uberX into the market.
As the issue came to a head this week, big-time Seattle celebrities Macklemore and Seahawks players Golden Tate and Sidney Rice plugged Uber on Twitter and Facebook. Uber and a spokesman for Macklemore said the posts were not paid endorsements.
The business models of each service, which the City Council calls Transportation Network Companies (TNCs), have, so far, depended on hundreds of both part-time and full-time drivers without any city-issued license.
Despite repeated requests from city staff and media, Uber, Lyft and Sidecar have never said exactly how many drivers they have. The companies have not shared their insurance policies because they say revealing that proprietary information could give other companies a competitive edge.
The regulations the committee is expected to approve would require TNC drivers to pay for driver safety training as well as permitting. The proposal does not cap the number of licensed for-hire drivers who contract with the TNCs.
TNC companies would be required to pay the city $50,000 a year initially, and then either that or 0.35 percent of its revenue — whichever is higher.
All three City Council members who have studied the debate in detail since last March, Sally Clark, Mike O’Brien and Bruce Harrell, have expressed their approval for a cap of 300 TNC permits.
“No, I don’t want to ‘temporarily’ kill innovation, but I do want to buy a year for the taxi world to adapt — and they must adapt quickly,” Clark wrote in a blog post detailing her position on caps and TNC insurance issues. “UberX and Lyft have changed the game. They’ve elevated the bar for customer service. That’s good for all of us.”
Harrell and O’Brien have emphasized that leveling the playing field for taxi and for-hire drivers and TNC drivers is a social-justice issue as well. For many taxi drivers, the job is the first one they have in the United States.
All three council members were expected to approve the cap Feb. 14 but delayed a decision after more City Council members weighed in on the issue. Kshama Sawant came out swinging against what she called the corporate, market-disrupter mindset of Lyft, Uber and Sidecar, which are San Francisco-based companies backed by millions in venture capital. Sally Bagshaw and Tom Rasmussen were more sympathetic to the TNCs.
Mayor Ed Murray said he was against placing permanent caps on the TNCs but agreed that a pilot phase including caps was warranted as the city continues to study how to best work with them.
“We must find ways to help the industry continue to succeed and evolve by reducing the overly burdensome and outdated regulations and proving opportunity for innovation,” said Murray in a statement. “We also must immediately put in place regulations on the TNCs, including insurance and safety requirements that are commensurate to the for-hire industry.”
TNCs used the extra time before a committee vote to launch an aggressive campaign against the cap proposal.
“Seattle City Councilmembers Sally Clark, Mike O’Brien, and Bruce Harrell have proposed regulations that are, without a doubt, the most destructive we have seen across more than 60 markets,” reads an ad Uber bought in The Stranger this week.
Should uberX shut down in Seattle, the services available from town-car service UberBLACK would still be available because it is considered a limo service that can be regulated only by the state.
The full City Council will vote on the cap proposal next month if the committee approves it at the 4 p.m. meeting Thursday. If approved, the cap would go into effect one month after the mayor signed it into law.
Alexa Vaughn: 206-464-2515 or firstname.lastname@example.org. On Twitter @AlexaVaughn.