While we wait in Houston for City Council to take action on amending the taxi and limousine codes to deal with the entry of Uber and Lyft, the city of Seattle took a novel approach to the issue.
In a major victory for the city’s taxi cab drivers, the Seattle City Council voted Monday to place limits on the number of drivers that alternative transportation companies like Uber and Lyft can have operating at any one time — the first U.S. city to do so.
The new law would limit three companies — UberX, Lyft and Sidecar — to 150 drivers each on the road at any given time, for a collective total of 450 drivers. That’s a significant decrease from the 2,000 drivers the three companies estimate they have operating in the city right now.
Taxi cab operators have said the new services have added so many drivers to city streets that it’s put them at a significant disadvantage. Seattle has not issued a new taxi license since 1990, when the city council passed a moratorium. The new legislation would issue an additional 200 taxi licenses over the next two years to the 688 traditional cabs already in operation.
But the new companies, known as Transportation Network Companies, say adding new for-hire vehicles is good for consumers, especially those who have to wait for long periods of time before one of the city’s taxis can be dispatched to their homes.
“The host of regulatory structures or policies seek to prioritize the interests of taxi monopolies over the interests of consumers,” said Nairi Hourdajian, a spokeswoman for the San Francisco-based Uber. “For decades, the taxi industry hasn’t evolved. They haven’t improved customer service. People who couldn’t get a ride a decade ago still can’t get a ride today.”
Seattle is the first city to impose a cap like this on Uber and Lyft. The story notes that some other cities have refused to allow those services in – it incorrectly identifies Houston as one such city – but notes that this restriction is not permanent and will be revisited.
The City Council’s taxi committee considered regulations for almost a year before Monday’s vote. But Councilmember Sally Clark emphasized at the meeting that the council has a lot more regulation and deregulation to debate.
“What we’re doing today is not a complete fix,” said Clark. “But it’s a start.”
The regulations allow for the council to reconsider driver limits — and maybe getting rid of them altogether — in a year.
Mayor Ed Murray said in a statement Monday that he hopes to phase out limits after the council approves of fair ways to deregulate the local taxi industry.
“I remain concerned about the issue of caps on rideshare vehicles, which I believe is unreasonably restrictive and unworkable in practice,” Murray said.
Council Member Clark explained her reasoning on more depth to TechCrunch.
“I don’t want to ‘temporarily’ kill innovation, but I do want to buy a year for the taxi world to adapt,” wrote Sally Clark, the chairwoman of the Seattle City Council’s Taxi, Limousine and For Hire Regulations Committee, in a post last month before the vote. “The idea seems to be that if you set the right number of vehicles, everyone gets a ride when they need it and the drivers have enough work to make a decent living.”
Clark explained to us in an interview that she’s not opposed to upending the current system of metering and supply controls, but that “it can’t happen immediately.” Instead, innovation must be studied and measured before it can be allowed to impact the economy in unforeseeable ways. “We need to measure the impact on our system and then respond accordingly.”
Clark worries specifically about wheelchair bound residents who rely on available cabs and taxi migrants who have invested their life-savings into a system they believed would be in place for the long-term.
To be sure, we don’t know whether Uber and Lyft ever cause any of these problems; the ride-sharing industry hasn’t been around long enough to know whether it will wipe out the existing system.
So why does a startup have the burden to prove it has the right to come into a new market? Describing the reason to regulate the number of Uber cars on the road, she argued, “Going ahead and doing unregulated numbers means that I go ahead and buy the cost of having to correct the problems later on.”
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The disquieting realization is that there is a trade-off between financial equality and innovation. Technology does away with the inefficiencies that give people jobs. Not everyone needs to be a full-time driver, nor do we need all the human-powered dispatchers that once routed taxis to passengers and maintained an optimal number of cars on the road.
Clark maintains that the “wait and study” approach is far more progressive than other cities, which have made it far more difficult.
The upshot is that tech companies are going to have to juggle protecting the workers they displace with finding a way to be profitable. “It is pretty difficult to shift the burden over to the folks who are going to lose service,” she explains.
So we’ll see. I’m not sure I buy this idea, but it will be useful to see how it plays out. Houston will have taken action long before Seattle revisits its decision. I don’t expect us to follow their lead, but anything is possible. With our discussion about to begin, the tech media will be watching, as I’m sure will be other city councils. Wonkblog has more.
Frankly I think it’s a novel resolution. Might be the best way to smooth out some of the transitional bumps.
Is there a report that describes how the free rides by Uber and Lyft in Houston over the past month have affected the local cabbies?
PDiddie – Not that I am aware of. Good question, I’d like to know the answer as well.