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February 14, 2014 at 7:23 AM

Seattle City Council postpones tough vote on UberX, Lyft and Sidecar

On Friday morning, the Seattle City Council’s Committee on Taxi, For-Hire and Limousine Regulations will meet (again) to discuss what to do with app-based transportation companies such as Lyft, Sidecar and UberX. The three-member panel had planned to vote on a draft proposal that would have capped the number of ridesharing vehicles that can operate citywide.

That’s good. It means the council can avert the risk of passing a bad policy and punishing innovation.

Probably helps that Seattle Mayor Ed Murray weighed in throughout the week to express his concerns about the pending legislation. He tweeted this on Thursday:

TNC stands for Transportation Network Companies, the new regulatory category California created last year when it legalized ride-sharing. Though Seattle city officials modeled their draft legislation on that state’s rules, they’ve so far chosen to ignore the part where California does not limit the number of ridesharing vehicles that can be licensed.

Here’s a Dec. 16 Opinion Northwest blog post outlining some concerns with the city council’s proposal. Readers weighed in a few days later. The Seattle Times editorial board supports leveling the playing field for all drivers so that consumer safety is a top priority. Here’s an excerpt from an Oct. 16 editorial:

Previous city leaders created a system that no longer works. Many in Seattle’s fast-growing population do not own a car. Today’s council is under no obligation to preserve a flawed taxi monopoly.

An alternative plan presented in this Feb. 13 column by Councilmember Mike O’Brien and OneAmerica Executive Director Rich Stolz  is an effort to be fair to the many immigrant drivers who’ve patiently waited for a taxi license:

The proposal adopts the technological innovations many want by increasing the number of legal vehicles carrying passengers for money on the road by nearly 50 percent, including 300 new app-based licenses and 150 new taxi licenses. Doing so ensures opportunities for those drivers who already invested in their taxis and licenses and have played by the rules.

The proposal ensures public safety by requiring uniform safety and liability standards, such as vehicle safety inspections, driver training requirements and liability insurance requirements. It would also create a two-year pilot to study the impact on the industry and customer experiences during this major transition.

The problem with that argument is that it discounts the high number of immigrants, students and working-class drivers who now rely on Lyft, UberX and Sidecar to make ends meet. Here’s a response to the guest column emailed by Aaron Toso, a lobbyist for Uber:

First, UberX drivers make up the exact demographic (O’Brien and Stolz)  purport to protect. UberX is 75 percent East African, 20 percent Indian and 5 percent “other”, so OneAmerica and O’Brien are picking one group of immigrants over another. This is a disappointing  position by OneAmerica. Even worse, they are telling immigrants that they should take the taxi job that pays less.

Now the wage issue: O’Brien wants to raise the minimum wage.

Lease vehicle – $85/shift ($1,700/month if driver works five shifts per week for four weeks)
After fees and other costs, we’ve heard that taxi drivers make less than the minimum wage.

Drivers own their car – $300/month
Drivers pay 5 percent to UberX on each transaction.
The average driver makes around $20/hour and they can drive when they want.

This is the reason that about 50% of the drivers on the uberX system are former taxi drivers.

Here’s an excerpt from Lyft’s Feb. 12 blog post on the Seattle situation:

There are council members who claim new transportation services hurt existing industries, while the City of Seattle’s taxi usage data shows that taxi companies reported higher revenue in 2013 than ever before as Seattle residents can now more easily live car-free. Also important, new models are providing drivers with greater economic opportunity as 80% of earnings go directly to the drivers themselves, which is often double what drivers of existing models keep. We will continue working with the local community to defend their rights to provide safe and affordable transportation in Seattle.

Instead of trying to fit UberX, Lyft and Sidecar into a box, the city should encourage bold changes and emerging technology to improve its current transportation offerings. In recent months, new apps such as Flywheel are helping traditional for-hire and taxi cars to access the same smartphone-based technology that have made Lyft and Uber so popular.

This whole taxi versus ridesharing debate doesn’t have to be about winners and losers. There is room for all drivers to co-exist and compete with one another.


Comments | Topics: lyft, ridesharing, Seattle City Council


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