As Expected, City Council Unanimously Approves Rideshare Regulations (Including Caps)

A year in the making, this afternoon the Seattle City Council unanimously approved legislation that creates regulations for the city’s burgeoning rideshare market. The vote was a long time coming, and went down as was expected - especially after the entire council had previously weighed in during a committee vote in February.

The most contentious point of the regulation - the 150 operating driver cap placed on each rideshare company, like UberX, Lyft and SideCar - was included in the final legislation, despite a last-ditch effort by councilmembers Tom Rasumussen, Tim Burgess and Sally Bagshaw to remove the provision (which went down 3-6). Rideshare companies have repeatedly stated that such a cap will effectively kill their business model in Seattle. Previously, UberX has said it has roughly 900 drivers in Seattle, while Lyft has estimated it has more than 1000. Rasmussen and Co. argued that capping the number of rideshare drivers amounted to stifling innovation.

Meanwhile, a couple of amendments were added to the rideshare regulations, including one lowering the minimum rating for insurance companies covering taxis, and one intended to prevent rideshare companies from getting around the cap by simply cloning themselves.

Assuming Mayor Ed Murray signs off on it, the vote sets the stage for a pilot program, after which things can be tweaked. Among other things, the legislation also increases the number of taxi licenses the city will offer.

Sally Clark, the chair of the Council’s taxi committee, released the following statement after the vote:

“My experience on Council has been that every few years something about taxi regulations gets to the point where something has to be fixed. Realizing that avoiding a comprehensive fix is no longer possible, today my Council colleagues and I took decisive action.

“What we’re voting on today isn’t a complete fix, but it’s a start. The first meeting of the Taxi, Limo, For-Hire Committee (March 14, 2013), started out of a need to resolve conflict between the taxis and the flat-rates and to better fund enforcement of the rules governing the existing, legacy players. The committee was tasked quickly with a different question: how do we bring new players with different business models into a regulatory framework built for a different time?

“Since that time we’ve heard hours of testimony at the microphone; contracted for a study of the Seattle market to get a better idea of the demand for alternatives to the personal automobile and bus; and, been deluged with calls and emails. Through all of this we’ve attempted to ground our work in three goals: Safety, consumer protection, and expanded mobility.

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

“The limited access to taxi licenses in Seattle and King County coupled with driver and vehicle regulations that haven’t kept up with contemporary service expectations and technology, made disruption not only inevitable, but welcomed by many drivers and riders. We’ll change that by releasing more taxi licenses and revamping driver training and vehicle checks.

“We have much more work to do with respect to driver training, safety and customer service, vehicle licensing and re-licensing. We will be working with Mayor Murray as we track the impacts on passengers and drivers. I’m glad to see his commitment to quick and focused revamping of the city’s for-hire regulations, and I hope King County regulators, our partners in all of this, are as excited as we are to crack open licensing.

“In cities across the United States and other parts of the globe, companies have chosen to launch first, ask questions later. Every city and state looks to be playing out the same debate as we’re having here. In Seattle, we’ve now defined the regulatory framework under which UberX, Lyft, Sidecar and their followers can operate legally in the city. These rules recognize that times are changing – and that safety and consumer protection never go out of style.”

We’ve reached out to UberX, Lyft and SideCar for comment on today’s vote, and will update this post accordingly when they respond.

UPDATE: UberX sends this reaction, via Gallatin Public Affairs:

“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. 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.”

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