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Lyft to leave November 20

So long.

Lyft

Lyft plans to suspend its Houston operations on Nov. 20, according to a letter sent to Houston Lyft users.

The San Francisco-based ride-sharing service is upset over the new regulations approved by the Houston City Council in August. Those regulations include requiring drivers to have background checks and required medical exams, and installing fire extinguishers in Lyft cars, according to the letter.

“You have spoken up and shown your support at last week’s City Council hearing, along with thousands of other Houston residents,” the letter said. “In spite of this, city officials have moved forward with the most onerous ridesharing requirements to date that essentially treat Lyft like a taxi.”

It goes on to say that the the regulations make it difficult for part-time drivers of the Lyft system, which make up a large portion of the network, to operate and still make money.

See here for the background. Permits for rideshare/TNCs started being issued on Tuesday. For their part, Uber is going gangbusters.

Uber

As of Thursday evening, the city had issued 63 provisional permits to drivers, authorizing them to carry riders legally for the first time. The provisional permits are good for 30 days, giving drivers and the companies that connect them with riders time to comply with the new rules.

Drivers are working through a checklist that includes a municipal court check for outstanding warrants, background check and various requirements for the vehicles.

More than 200 requests for warrant checks have been received in the past week at municipal court, said Lara Cottingham, deputy assistant director of the city’s regulatory affairs department.

“I wasn’t crazy about paying $20 for a warrant check when I already had a background check, but I got it done,” Rice said.

Rice said it cost him about $160 to comply with the drug screenings, paperwork and vehicle inspections. The company isn’t covering the cost because the drivers technically are independent contractors.

City officials, to smooth things along, are using the Kashmere Multi-Service Center in northeast Houston as a one-stop shop for permits. Inspectors can verify vehicles in the parking lot while others check the paperwork necessary under the city’s rules, approved in August. Even the private company that provides the fingerprint-based checks required by the city – the state’s official background company – brought staff to Kashmere to handle requests, Cottingham said.

I wonder if another company like Sidecar will come in to pick up the slack from Lyft. I still don’t understand why they found the city’s ordinance so much more cumbersome than Uber did, but whatever. Hair Balls has more.

Lyft leaving?

Sorry it’s not working out for you. Best of luck in your future endeavors.

Lyft

Less than a week before new city regulations take effect, one of two app-based, paid-ride companies is preparing to end its local business rather than use a city-required procedure to conduct background checks.

“We’ve made the very difficult decision that if Houston doesn’t amend its process, we’ve decided we have no choice but to pause operations,” David Estrada, vice president of government operations for Lyft, said Wednesday.

Estrada said the company will ask the city to delay implementing the rules. If it does not do so, he said, Lyft will cease operations in Houston until the process can be streamlined.

“Houston is one market, but our goal is ride-sharing across America,” Estrada said. “We want to be in every market, but we have come to the decision we want to take a stand.” This is the first time Lyft has announced it would leave a market based on local rules.

[…]

The rules set to go into effect Tuesday include requirements that drivers present their vehicle for inspection, submit a warrant check and personal information to the city and undergo drug screening.

The companies already take many of these steps, but their procedures are not exactly the same. While the companies use online background checks, Houston requires applicants to use the state’s fingerprint-based background check company. This was a sticking point for Lyft.

“We have found a more efficient way to do these things,” said David Mack, Lyft’s director of public affairs.

The drivers would face expensive drug tests and permits just to do something many consider a hobby or side job. Estrada said drivers consider the process onerous. “It treats them like a criminal first,” Estrada said.

The city-required method would cost drivers about $62. Lyft covers the cost of its procedures when it approves drivers.

I’ve said before that I didn’t quite understand the fuss over this. Seems like a pretty extreme position for Lyft to take, especially given that Uber is apparently prepared to live with it, but ya gotta do what ya gotta do. I’ve also said that I’d like to see the rules get reviewed again in a year or so, so maybe they’ll get another crack at this later. The Highwayman, Hair Balls, and Texpatriate have more.

Reminder: Uber and Lyft aren’t legal yet in Houston

Drive for ’em at your own risk for the next month or so.

Uber

New entrants into Houston’s paid-ride market can’t be licensed to operate for another month, but the transition is proving problematic as the companies and drivers rack up citations and the city impounds vehicles.

Since Aug. 6, when the City Council approved changes to the city’s for-hire transportation rules, Uber and Lyft have received 1,046 citations – more than the 861 issued in the six months between the companies’ February launch and the council vote. The companies connect riders and drivers via smartphone apps.

“We are still enforcing all aspects of our ordinance daily,” said Tina Paez, director of the city’s regulatory affairs department. “We started impounding last Thursday.”

Inspectors pose as passengers and issue citations once the fare is charged.

As of Friday, four vehicles – one rogue cab, two vehicles affiliated with Uber and one with Lyft – have been seized by police. The authority to impound violators’ vehicles came with the rule changes in August, in part because many council members felt the city lacked leverage to keep Uber and Lyft in check.

[…]

Lyft

As taxi and limo companies urged the city to crack down on the companies, the new entrants pushed for regulatory changes the city already was considering. Ultimately, many of the changes sought by Uber and Lyft were adopted by the City Council, along with a procedure for permitting and regulating the companies and their drivers, who operate as independent contractors.

Council members provided a 60-day window to get the permitting process settled, meaning the city can start issuing permits on Nov. 4. On Monday, the city and companies can start working on details such as drug screenings, which can take place within 30 days of seeking the permit.

Based on what Uber has told city officials to expect, Paez said, thousands of permits could be issued in the first few weeks.

“We expect it to be greater than 5,000, and that’s just Uber,” Paez said.

See here for the story about Uber and Lyft being approved by Council, and note the bit about waiting 90 days to sign up for a permit. Go through the process, y’all – that’s what it’s there for, and that’s what all the shouting and wrangling was about. I have long said that I expect there to be demand for these services from people that don’t currently use cabs, and I fully expect the overall vehicle-for-hire market to grow, but I don’t know if it will be big enough to handle 5,000 or more new drivers, even if they’re mostly part-timers. Not at first, anyway. I hope someone is planning to do a study on the effect of the entrance of Uber and Lyft on existing cab companies and other services. I’d really like to have a better idea of how this worked out in a year’s time or so. The Highwayman has more.

The limits of lobbying

They do exist, as Houston’s cab companies recently discovered.

Uber

More than a year of intense lobbying by established cab companies and tens of thousands of dollars in campaign donations to City Council members were not enough to hold off a pair of upstart tech-taxi firms that now can operate legally in Houston.

In the end, city regulators made few changes to their original proposal revising Houston’s vehicle-for-hire rules. Of the two dozen amendments proposed by council members before they approved the item earlier this month, neither of the cab industry’s top priorities – capping the number of drivers who can sign up with the new companies and requiring them to carry round-the-clock commercial insurance – passed.

To the extent the proposal did evolve, the changes are unlikely to hamper new entrants, Uber and Lyft, or other firms that use smartphone applications to connect willing drivers with interested riders using the driver’s personal car.

Perhaps, said Councilman Michael Kubosh, a staunch opponent of the new rules, the vote simply reflected that the app firms have an idea whose time has come.

“I let the cab companies know right off when they came to talk to me, and I certainly told the cab drivers, ‘Guys, technology always trumps tradition. This is coming and you guys have to prepare yourselves for it,’ ” he said.

Lyft

[…]

Tina Paez, director of the city’s Administration and Regulatory Affairs Department that drafted the new rules, credited Yellow Cab with pushing for disabled access. The final ordinance requires at least 3 percent of vehicles for hire to be wheelchair accessible, that no one company can meet that goal, and that a task force will make further recommendations to City Council.

Paez pushed back on the other victories [Yellow Cab lobbyist Cindy] Clifford claimed, however, saying her department’s original draft was based on research, not suggestions from the cab industry or the new app companies.

The city always planned to place the same public safety rules on all companies, Paez said, though she acknowledged taxi lobbying forced the new firms to submit to city background checks and vehicle inspections rather than let third parties conduct them. And, Paez said, the language clarifying the effect of new entrants’ insurance policies changed the wording but not the content of the law.

“There was very, very little that changed from what we originally proposed to council, except for the disabilities part,” Paez said.

I think CM Kubosh summed it up pretty well. There’s clearly a demand for the type of service being offered by Uber and Lyft, and the main argument against them largely boiled down to “we’ve always done it this way”. Yes, there were legitimate concerns raised about insurance, background checks, and access for disabled folks, but there was never any reason those couldn’t be addressed. I’ve said before that I’d like to see the changes reviewed in (say) twelve months’ time because we don’t have any history to guide us with these changes and we don’t know what the long term effects will be, but again that’s no reason not to try to deal with the evolution of the market. I still think that much of the demand for Uber and Lyft will come from people who weren’t cab riders to begin with and that the existing cab business will be affected much less than they fear, but we’ll see. It’s my hope that we’ll look back on this in a year or two and say that the market has grown and that people have benefited from the expansion of their choices.

Houston’s payday lending ordinance is now in place

Part of me hopes that there’s a lot of complaints, and part of me hopes there’s very few.

Houston’s stringent new rules on payday and auto title lenders took effect Tuesday, reviving industry complaints that it would drive companies out of business, or at least out of the city, but giving borrowers a clearer path out debt.

“We’ll see stores close, we’ll see people laid off,” said Rob Norcross, of Consumer Service Alliance of Texas, a loan industry group. “You’ll have some companies that will maintain stores at lower revenue levels, and they’ll probably close other ones. We’ve only seen a couple companies close up shop totally in the other large metropolitan areas. It will be a gradual process.”

He predicted borrowers whose needs exceed the city’s new limits will go to lenders in unregulated areas, get a loan online or take out several small loans to add up to the amount they want.

Payday lending involves small, short-term loans that avoid legal caps on fees and interest that apply to such mainstream lenders as banks. Title loans operate similarly and are secured by the borrower’s automobile title, leaving the vehicle at risk for repossession. Borrowers typically lack the funds or credit to get loans any other way.

In the 10-county Houston region, home to a fourth of the state’s 3,240 such lenders, data show borrowers refinance more and pay on time less than state averages and that more than 100 title borrowers have their cars repossessed each week.

Houston’s ordinance limits payday loans to 20 percent of a borrower’s gross monthly income and auto title loans to 3 percent of the borrower’s gross annual income or 70 percent of the car’s value, whichever is less. Single-payment payday loans can be refinanced no more than three times, while installment loans can include no more than four payments. The principal owed must drop by at least 25 percent with each installment or refinancing.

[…]

On the first day of enforcement, city officials had identified 361 active payday and auto title lenders inside Houston’s city limits, 309 of which had registered under the new rules as of Tuesday morning.

Toya Ramirez, a staff analyst in the city’s Administration & Regulatory Affairs department hired to oversee the ordinance, said it was unclear which of the remaining 52 lenders have closed, moved outside city limits or simply failed to register.

Ramirez said the city will approach enforcement using a complaint-based system, and said there are no stings or compliance audits planned.

The ordinance was passed in December, with a grace period to allow the lenders to get up to speed. Houston’s original plan was to do enforcement more aggressively, but I’m okay with this approach. For now, anyway. If the payday lenders are mostly compliant with the ordinance, there won’t be any need to be more proactive. My prediction is that despite Rob Norcross’ crocodile tears the industry will continue to profit handsomely, just a little less handsomely than before. If that does wind up squeezing a few operators out – as we can see by this map, there’s plenty of them – that will be fine by me.

Another taxi survey

From the inbox:

Vehicle for hire industry survey

The City of Houston has retained Taxi Research Partners to conduct a study of demand within the vehicle for hire industry in Houston. The study will review current market conditions, identify key players and stakeholders in the industry and will establish a baseline for demand for those services.

This will allow for an initial review of market conditions and assist in data collection, including the identification of correct market “players” for electronic data requests. Additionally, the study will identify elasticity and cross elasticity of demand between different modes of transportation within the vehicle for hire industry.

Please take a moment to complete the survey by using the link below. Whether you are completely satisfied with the service or if you believe there is a need for improvement, your response is vital to the success of this study. All responses will be held in the strictest confidence, so please comment freely.

Survey Link:

https://www.surveymonkey.com/s/HoustonTaxi

Thank you,

City of Houston Administration & Regulatory Affairs Department

There have been at least two other studies done in Houston, one a taxi study done for Houston commissioned by the Administration & Regulatory Affairs Department, one a taxi demand study commissioned by Uber. I’m not sure what we might learn from this that we didn’t already learn from those, but there’s the link if you want to participate.

Meanwhile, the study process has begun in Austin, and The Highwayman observes the state of play in Houston while noting that all things considered the dispute here has been pretty low-key.

It’s important at this point to note a few things about the status of the negotiations, and this issue in general.

  • City officials and both sides have been at this debate for more than a year.
  • Uber and Lyft are not operating legally in Houston, so long as they accept money for rides without having a taxi medallion.
  • They are, however, doing background checks on their drivers, though not the detailed ones cab drivers face.
  • The city commissioned a $50,000 study, city staff poked holes in and generally disagreed with a lot of findings, which is reflected in their suggested rule changes.
  • The added delay is happening because until recently the city’s largest taxi-limo company, Greater Houston Transportation Company, would not negotiate, saying the entrants were rogue operators, period, end of story.
  • If the city just bars the proverbial gates and refuses to let Uber and Lyft in, everyone is going to end up in court. They’ll likely end up there if they let them in, too, unless Houston finds compromise where no one else has seemed to.
  • Not that it is a guarantee they will abide, but the sooner Houston has a good set of laws that cover everyone, the sooner everyone will follow them.

Taking all of those things into consideration, by the standard set in some other places, this has been smooth. The change taking place is hugely disruptive to the paid-ride market, and Uber and Lyft have racked up 160 citations by last count.

Will mediation and some extra time help things along? Or has our somewhat smooth path just been the precursor to the upheaval?

See Wonkblog for what that upheaval has looked like elsewhere. Things may get more contentious here, but not like that.

Draft ordinance on vehicles for hire is out

Mayor Parker puts another item on City Council’s to do list.

A proposed Houston ordinance could legalize hundreds of for-hire drivers providing rides through smartphone applications, but would require those drivers meet the same permitting and safety requirements as taxicab and limousine drivers already regulated by the city.

Under the proposal by the city’s Department of Administrative and Regulatory Affairs, the ride-sharing services would have to meet the same standards for fingerprint-based background checks and vehicle inspections already required of cab and limo drivers.

Other city and state governments have allowed the companies to do their own record checks based on Social Security numbers, or loosened inspection rules.

The proposed ordinance also would set fees for the new services based on revenues, allow all for-hire drivers to charge for no shows, mandate all companies accept credit cards, eliminate a 30-minute wait requirement for “pre-arranged” pick-ups, and drop a $70 minimum limo fare originally designed to shield the taxicab industry.

“We see this as leveling the playing field,” said Tina Paez, head of the city’s regulatory affairs department. “Uber and Lyft will probably tell you we’re overreaching. If there is some compromise that council makes, I hope it’s one that still works for passengers in terms of public safety.”

[…]

Yellow Cab lobbyist Cindy Clifford said technological advancement does not preclude businesses from following existing law, nor should it weaken standards set in the proposed ordinance.

The city, she said, should set a cap on the number of licensed drivers and keep the $70 minimum limo fare intact.

“If you flood the market with drivers, it will be very hard for anyone to make a decent living,” Clifford said.

For example, she said, existing rules require cab and limousine companies to serve all neighborhoods at all hours, regardless of profit margins and overhead costs. Under the proposed ordinance, she said it appears Uber and Lyft could ignore low-profit calls.

“A lot of our business is taking people to the grocery store, to their doctor’s appointment,” Clifford said. “They’re not always lucrative trips. That’s balanced by the fact drivers have access to other trips.”

You can see the draft ordinance here. As you know, I don’t agree with the belief that the vehicle for hire market in Houston is zero sum. The market will definitely change when Uber and Lyft are allowed in, and those changes may well not be beneficial to the legacy cab companies, at least in the beginning, but I am persuaded that on balance these changes will be beneficial for customers. It’s interesting to me that the cab companies are now touting the Seattle solution, which suggests to me that they don’t think they can keep Uber and Lyft out all together. Falling back on limiting the total number of drivers seems to me to be their way to mitigate the damage. There may be some merit to this approach – I’m a bit dubious, but I am willing to give it six or twelve months to see what the effect on the market has been.

Anyway. I sent emails to spokespeople for Uber and Lyft to ask for their comment, as they hadn’t had much to say in time for the Chron story. This is what I got from Lyft:

The proposed ordinance marks a starting point to a thoughtful discussion around Lyft in Houston. The people of Houston have enthusiastically welcomed Lyft to the city for affordable, convenient and safe rides. We will continue working with city leadership toward a solution that prioritizes safety, innovation and consumer choice.

I didn’t get a response from Uber by the time this was published. If I get one later, I’ll add it. What do you think of the draft ordinance? Hair Balls has more.

Good news and bad news on the Washington Avenue parking benefit district

As you may recall, a bit more than a year ago Council approved a plan to create a “parking benefit district” for the Washington Avenue corridor, which is a fancy way of saying they approved the installation of parking meters whose revenue would then be used to help pay for infrastructure improvements in the area, which could certainly use them. The first parking meters were installed last May, with the idea being that after 18 months Council would rewiew how it’s going and possibly make changes or even scrap the whole thing. So how is it going? Like the title says, there’s good news and bad news.

Meet the meter

Defying doomsday scenarios, paid parking doesn’t seem to have dented sales along Washington, which is set to welcome new shops, restaurants and bars this year. The wait at restaurants is as long as ever, and revelers dash across the street at all hours of the night while the clubs are open.

But parking revenue is below expectations, potentially delaying improvements like wider sidewalks and trees.

Residents worked with the city to form the parking district and start metered parking along Washington last May, in the hope of curbing the problem of people swarming the neighborhoods and flooding the streets with cars late into the night.

Businesses worried the new rules would drive business elsewhere, saying parking hassles might threaten the economic growth that made the corridor desirable in the first place.

Parking problems seem to be reduced after nearly nine months of paid parking, and taxable sales at businesses have not slumped.

“Nobody’s office phones are getting lit up anymore” with parking complaints, said Christopher Newport, spokesman for Houston’s regulatory affairs department.

Most visitors are parking farther away, either to avoid paying a meter or because no spots on Washington are available at peak times, Newport said. Where parking used to be a headache two or three blocks off Washington, diners and drinkers now are dispersing six and seven blocks away. Even so, residents haven’t rushed to file paperwork to restrict parking along their streets, Newport said.

“They either do not think people parking in front of their house is a big deal or they don’t want to go through the program,” he said.

[…]

The city’s agreement with the local board requires total revenue of $250,000 before any sidewalks, landscaping or other improvements can begin. Based on current rates, the district won’t reach that amount until 2021.

If the city lowers the threshold to $100,000, reduces the staff patrolling the district and shares some of the citation revenue with the local district, some small projects could be considered later this year.

See here and here for some more background, and here for the Washington Avenue PBD page. I always like having actual numbers with stories like these, so I sent an email to Christopher Newport for more details. He sent me the original presentation with the initial revenue projections, and this updated presentation that shows where things are now. Let me summarize the main points because it’s a little confusing.

  • The city did a survey over several weeks of how many cars were parked on a nightly basis in the affected area prior to the creation of the PBD. The count was usually right around 270-280 cars, so the projections were based on that.
  • In practice, about 170 cars per night have been parking at the meters. The total number of cars parking was the same as before, but now some drivers were going farther into the surrounding neighborhoods to avoid paying to park. This is the reason why meter revenue has fallen short of projections.
  • There is another source of revenue related to the PBD, however, and that’s revenue from parking citations, particularly for expired meters. That revenue all goes to the city, not to the PBD. One of the changes that will be made going forward is that a portion of this money, from citations that are a direct result of the creation of the PBD and the installation of the meters – i.e., citations for expired meters, not citations for things like parking too close to a stop sign or blocking a driveway – will be used to help pay for the overhead costs of the PBD. These revenues can’t be used to pay for infrastructure improvements in the PBD, but by using some of this revenue to pay for the overhead of the PBD, it will allow enough money to be collected and used for the hoped-for improvements.
  • The change described above is administrative, so it can be done with a stroke of the pen. The other change, to lower the threshold of revenue needed to begin doing improvements from $250K to $100K, will require Council approval. Assuming it is granted, that threshold should be reached in a couple of months.
  • Finally, the city will continue to talk with the surrounding neighborhoods about residential parking permits, which would serve to send those wayward parkers back to the meter zone. If the neighborhoods are okay with how things are, that’s fine, too.

So the bad news isn’t really bad, and with a couple of tweaks improvement projects can be proposed and approved this year. There will be another review of the program around the end of the year, eighteen months after the ordinance was passed, as specified in the ordinance. If things continue on this course, I would expect the PBD to be renewed.

Cab companies push back on Uber/Lyft

The first Council action on updating the taxi and limo codes to accommodate Uber and Lyft went about as you’d expect.

Houston City Council members struggled Tuesday to strike a balance between ensuring paid rides in Houston are available to everyone and encouraging competition from new firms that say they can provide faster service.

Speakers at a joint meeting of two council committees considering changes in taxi regulations said the business models of the new companies, Uber and Lyft, could complicate a system important not just to established businesses, but to city residents dependent on cabs.

“This needs to be broader than who makes a dollar off of it,” said Tomaro Bell, president of the Super Neighborhood Alliance.

Lyft and Uber use non-professional drivers behind the wheels of their personal vehicles. Taxi industry leaders complained that the new companies would not face the same requirements as established ones, such as serving disabled passengers and providing service all over Houston.

“They don’t want the difficult part. They want the easy part,” said George Tompkins, who owns a company with five taxi medallions in Houston. “They want the fruit but they don’t want the vine.”

[…]

Council members also blasted the online companies for jumping into the market without approval after months of discussions. The companies’ hasty action complicated the council discussion, said Christopher Newport, chief of staff for the city’s regulatory affairs department.

“There is an implication you are having a conversation under duress,” he said.

Uber and Lyft faced similar concerns when they started service in Seattle, Chicago and Washington, D.C.

The online companies’ ultimate effect on Houston taxi service is difficult to predict, Newport said. Data from other cities doesn’t point to an obvious outcome in Houston.

Taxi companies complained about the potential loss of business before Houston revised its cab laws to cover jitney service that circulates in high-traffic areas. When the city eventually allowed jitneys in certain circumstances, though, their entrance didn’t significantly harm taxi companies.

The shorter chron.com story has a bit more information. I am not surprised that the claim-jumping entries by Lyft and UberX caused some fuss on Council, but in the end I don’t think it will matter. I refer you back to the demand study on taxi service in Houston, which points pretty clearly to Council taking action of some kind to open the market. The Chron sure wants it to happen. I think it will, and I think the market for paid rides is not zero sum; I think it will expand to accommodate the newcomers, though I’m sure there will be some pain for the legacy cab companies. In the end, I believe we will be better off.

More on the Lyft and Uber entrances

It’s a new day in Houston for people who need a ride.

Brian Walts was out until about 3 a.m. Friday hitting the clubs, but he didn’t have a single drink or set foot on a dance floor.

Rather, he was driving two gents home from the Washington Avenue area for free, hoping that by giving away an Uber trip, he might gain some customers for the service.

Uber and its competitor Lyft charged into the Houston ridesharing market in the past two days under the watchful eye of Houston officials who warned that the companies cannot accept payment until the city changes its rules governing taxis and limos.

For the companies, it’s a chance to earn some street cred with locals and gain some attention. Houston residents looking for a lift benefit from free trips within Loop 610.

For drivers like Walts, paid by the hour by the companies until they can make money based on their trips, it’s a chance to ease into their new role. For the customer, the experience is somewhere between calling a cab and bumming a ride from a friend.

Walts is hoping that collecting riders in his 2013 Hyundai can be a second job on top of his full-time gig as an account manager for a security technology company.

“It’s easy to do, especially if you’re a native,” he said on a spin through downtown.

[…]

Taxi companies have argued the companies are skirting established rules and do not live by the same strict standards governing taxi and limo companies.

Even giving away rides has been questioned. Yellow Cab spokeswoman Cindy Clifford argued that if a driver is paid to transport passengers, he or she is operating a “vehicle for hire” even if someone other than the customer is paying.

The city’s position, however, is that the trips are lawful as long as no money is exchanged, said Christopher Newport, chief of staff for the city’s regulatory affairs office.

The main thing that we learn – or at least, that I learned – from this story is that Uber, and I presume Lyft, will be paying drivers an hourly wage for the time that rides are free to users. That answers my question about why anyone would want to do the driving during that time, but still leaves open the matter of how long the companies will be willing to do this. Seven weeks is a long time, and delays are always possible. Be that as it may, here they are. We’ll see how well they’re received by the public.

Lyft gets set to lift off in Houston

Another option for getting a ride.

Prepare to see see pink-mustachioed cars roaming around the city as San Francisco-based car sharing company Lyft launches in Houston on Friday.

Lyft is an app-based service that allows anyone to register as a driver and use their own car to make money by giving other people a ride. People needing a ride log in to choose the nearest car from an online database, then they can call the driver directly to request a pick up.

[…]

Lyft is launching at Hughes Hanger on Washington Feb. 21 and is already accepting applications from potential drivers. The company claims drivers can make $800 every weekend.

That’s the short version of the story. The longer version makes it clear this is an incomplete beginning.

An app-based ridesharing service is charging into the Houston market without waiting for the city to revise rules that could subject the company and its drivers to fines if customers paid for their rides.

But the company, Lyft, is avoiding any immediate confrontation with city officials by temporarily refraining from charging or accepting donations. The city, meanwhile, will continue work on changes in its taxi and limousine ordinance that could enable Lyft and similar services to operate and accept payments.

The company, which connects riders with drivers who use their own vehicles, has evaluated the city’s ordinance and believes existing law allows it to operate, Lyft spokeswoman Erin Simpson said.

The service doesn’t charge a prescribed fee – payments are made via mobile phone and are technically donations – and it conducts its own background checks of drivers.

“Lyft is not a taxi or limo service,” Simpson said. Houston officials disagree, however, saying the city ordinance covers all sorts of fees and tips.

“There are some working girls that work the streets of Houston who say, ‘We’re legal because it is just a donation,’ ” Mayor Annise Parker said Wednesday. “I’m sorry, we will enforce our ordinances.”

After more detailed conversations on Wednesday, the company indicated it would – for an unspecified time – forgo any exchange of money between drivers and riders, said Christopher Newport, chief of staff for the city’s regulatory affairs department.

Anyone who accepts payment for a ride would be operating an illegal taxi service, Newport said. And Lyft could be cited for operating an unregulated dispatch service by connecting drivers and riders, he said.

This free start gets them off the hook for now, with the forthcoming changes to city code the finishing piece of the puzzle. Here’s some background info on Lyft sent to me by a company representative. It’s different than Uber, which is more like a traditional livery service, but similar in general to UberX. Speaking of UberX, last night I received an email from an Uber representative, with the following news:

Starting tonight at 7pm, uberX will be hitting the roads in Houston, for a limited time, delivering the Uber magic Houstonians have been demanding for months. The service will be free for users during this limited period.

Game on, then. Uber is the better known name, and they have the two different services to offer. Lyft stresses its custom insurance policy, background check and safety inspection of the cars, and its casual, friendly vibe – you sit in the front seat and pay what you want via the smartphone app, with no money changing hands – as its selling points. Drivers work their own hours, though I wonder how much capacity they’ll have during this no-fee opening period; same for UberX. The Houston Business Journal suggests we’re looking at a six to eight week timeline for Council action, and I don’t know if either of them can maintain that policy for that long.

In any event, as I said in that previous post, I see services like Uber and Lyft as another viable transportation option that allows people to be a little less dependent on owning their own car. Having options like these, in conjunction with better transit and complete streets, will do much to make the dense development we’re seeing in the urban core that much more attractive and livable. The Chron editorialized for Lyft in December, calling on Council to make the changes necessary to Chapter 46 to allow services like Lyft and Uber. That process will begin soon, and I am looking forward to the discussion. The Highwayman and Texpatriate have more.

Get ready for the taxis and Uber debate

Here’s the first challenge for the new Council.

City officials, armed with a new study showing weaknesses in the local system, are inching toward regulatory changes that would open Houston’s cab industry to new players, such as Uber, which enables customers to schedule trips with a smartphone application, bypassing much of a traditional taxi company’s bureaucracy.

Such companies can’t operate now under city codes, which are focused on making sure limos and private cars do not directly compete with cabs.

“We need a pretty comprehensive restructuring of our taxicab regulations to get in line with what’s the city’s role in making sure passengers have the safest and best choice available to them,” said Chris Newport, spokesman for the Houston Administration & Regulatory Affairs Department.

The city-commissioned study, by the Tennessee Transportation and Logistics Foundation’s director, Ray Mundy, suggests Houston serves certain ride-seekers well. Getting a ride to and from the city’s airports, for example, is easy.

What’s unclear is the city’s ability to handle more intercity routes because many cabs rely solely on taxi stands and major trips. Further, the study found some Houstonians have a negative impression of cab rides because of poor service by drivers. Many riders also find the litany of cab colors and company names confusing.

[…]

City staff, based on the report, recommended elimination of a $70 base fare on all private trips and a requirement that trips must be arranged 30 minutes prior to departure.

To pave the way for companies like Uber while ensuring safe trips, Houston officials would also establish insurance liability requirements for dispatch companies that cover the drivers. Drivers in the company’s Uber Black service would be independent contractors, not employed by Uber, but part of a partnership with the company that connects them with interested riders.

Under the city staff recommendations, the insurance would apply whether the car was carrying a customer or en route to pick one up. The insurance coverage could potentially be extended to all times the vehicle is in use, according to a city memo issued Friday.

Here’s the memo to the Mayor’s office from Tina Paez, the Director of Administration & Regulatory Affairs, with a review of the study and the recommendations for Council. A brief glimpse, from the Conclusions section:

The City of Houston has an interest in strictly regulating the taxi industry because it serves a vital public interest and ordinary market forces have proven themselves incapable of delivering reliable service at reasonable prices in the absence of regulation. This framework is supported by theory, empirical fact, and both local and State law.

We recommend moving forward with a phased approach to amending the vehicle-for-hire ordinance to address new entrants and technologies in the market, as well as address the taxicab issues identified in the taxicab study. Addressing the taxicab issues will involve major changes to the existing regulatory structure; thus, we recommend the taxicab changes to the ordinance occur in the second phase of the Chapter 46 amendments, after substantial stakeholder input is solicited and incorporated.

In the interest of public safety, the new entrants and emerging technologies can and should be addressed in the shorter term, in Phase I of the Chapter 46 amendments. In this phase we can expand the existing mobile dispatch provisions in our ordinance to ensure public safety standards are explicitly outlined, and we can update those provisions in the ordinance that may have become outdated due to the emerging technologies – such as the 30-minute reservation requirement for a limousine trip. With the advent of smartphone applications that can dispatch vehicles-for-hire at the press of a button, a 30-minute waiting period is no longer reasonable. Several regulatory authorities around the country have reconsidered this requirement and have replaced it with a definition for “prearranged” that instead speaks to the intent of the passenger, i.e. in order for the passenger to request a ride he/she must download the application and agree to the service agreement with the transportation provider, including providing a credit card. This shows clear intent by the passenger to prearrange a trip. Further, these trips cannot be hailed. All passenger information must be provided in advance.

Emphasis in the original. The memo goes on to identify Uber and Lyft as the main firms poised to enter the Houston market and the changes they say they need to be made. I’ve done a bit of blogging about Uber before, and I continue to believe there’s room in the market for companies like them and the existing cab industry. I think they’re coming whether we or the cab companies like it or not, and I’d rather the city took the approach of adjusting its existing regulatory structure in a way that everyone can at least live with rather than do nothing and wait for someone to file a lawsuit or for the newcomers to enter the market as rogues. As it happens, a couple of weeks ago I was having lunch in the tunnels downtown and I ran into Joshua Sanders having a meeting with representatives from Lyft, who were preparing to make their initial pitch to Council. Like I said, it’s coming.

I believe that if done well, the potential is there for the car-for-hire industry in Houston to expand and serve a larger audience with better service and a broader array of options. Frankly, if this happens it will be a boon for those who advocate for more density and a less car-centric culture in at least the inner-urban parts of Houston. It’s a lot easier to go carless or be a one-car household if you know there’s a convenient and affordable ride readily available when you need it. Having said all this, while there’s a lot of justified focus on the customer experience here, we need to keep in mind the needs of the drivers, especially those that will be serving as “independent operators” and thus will have less clout than full-time employees of a company would have. The Roosevelt Institute has some well-timed thoughts on this subject, which I would encourage Council members to read. Let’s make sure everybody’s interests are being represented and considered as we go forward with this.

On the Parking Benefit District

A proposed ordinance to create a parking benefit district in the Washington Avenue corridor was on Council’s agenda this week, but it was tagged and will wait a week while everyone gets up to speed on it.

CM Ellen Cohen

District C Council member Ellen Cohen says the city has been working with business owners to come up with a plan to test having parking meters,not only better regulate the constant influx of traffic, but:

“To deal with the issues of parking, increased crime, of safety, and neighbors live several streets off, and they walk in the evenings to restaurants and other services there. It’s a great place, but we want to make sure that it works, and so we’re gonna give it an 18 month trial and see how it goes.”

Mayor Annise Parker says contrary to some belief, they’re not creating an entertainment district.

“We’re trying to create a tool, so we can better manage the intersection between the businesses and the neighborhoods, and the public that needs to travel these major thoroughfares. I do hope that taking some of the lessons learned from creation of this parking benefit district will have 18 months to prove itself. We are not trying to create a one-size-fits-all model of this is what a parking benefit district looks like.”

Jane West is president of the Washington Avenue Coalition. She says money generated from parking meters will go to things like more sidewalks, better lighting and overall improved safety.

“This is a rare example of where members of our residential community, our business community and our development community have come together in a consensus opinion, for a proposal before city council. We’re disappointed that is wasn’t vote on this week, but we anticipate a favorable vote next week.”

See here for some background. I think this is an idea that makes a lot of sense. It’s based on the simple principle that parking is a valuable commodity, and it seeks to leverage that commodity and invest the revenue it generates back into the district. If you’ve ever tried to walk along Washington Avenue, you know how badly the infrastructure there needs work. Anyway, courtesy of CM Cohen’s office, here are some documents to help familiarize yourself with this proposal:

The PBD FAQ and flyer, plus the full presentation put together by the city. Be sure to at least read this document.

The left and right halves of the map of the area in question.

We’ll see what Council does with this, but I fully expect it to pass. What do you think about the idea?

Washington Avenue parking

The city of Houston has been trying to tackle the problem of insufficient parking in the busy Washington Avenue entertainment corridor.

What to do about Washington Avenue is Houston’s latest public policy discussion of what government’s role should be in growing business, in helping a fledgling business strip turn into a destination district.

The players all seem to want the same thing: Turnover at the restaurant tables, safe revelry in bars and clubs, pedestrians strolling a well-kept avenue and sprinkling their cash at the storefronts. All the while, people should be able to sleep through it two blocks away.

The city’s parking czar is rolling out plans for what he calls a parking benefit district, which would include residential parking permits to protect nearby homes, better lighting and security, and spruced-up sidewalks. It would be paid for by charging for spaces along the curb.

Don Pagel, whose official title is deputy director of Houston’s Department of Administration and Regulatory Affairs, says the avenue’s very success threatens to undermine its future. It is a Yogi Berra philosophy summed up in the Yankee legend’s oft-quoted remark that a New York restaurant “is so crowded nobody goes there anymore.”

Parking is a commodity, Pagel said, just like groceries or furniture, and should be priced accordingly to derive the maximum economic benefit. In practice, this means it should cost more when it is scarce. Charging for parking will not only bring in money that can be reinvested into the neighborhood, Pagel said, but it will ensure that the folks who have money to spend will get the premium spots at the curb. Someone who tries to avoid a $2 parking charge, Pagel suggests, is unlikely to spend $50 on dinner.

“Folks with the most money have the least amount of patience,” Pagel said. They will make one pass along Washington, he speculated, and if they don’t find a space they’ll move on to Montrose or Midtown.

I’m not particularly thrilled about residential parking permits, but everything else sounds pretty good. It’s particularly encouraging to hear officials like Pagel talk about parking as a valuable commodity, one that should be priced accordingly. Among other things, the sidewalks on Washington Avenue are atrocious, so if this parking benefit district can genuinely raise some money, perhaps that can finally be addressed. I have to think that any long-term solution must include better ways to get to Washington Avenue’s recreations without driving and parking – i.e., bikes, mass transit, and remote parking areas with shuttle service. But this sounds like a good start and the right direction, so let’s see how it goes. The Chron’s editorial page has more.

Council passes noise ordinance revisions

They’re the first such changes in a decade, and are intended to make it easier to prosecute complaints.

The police now can cite revelers, musicians and other noise makers for bass notes that officers can feel from the sidewalk. In addition, police and prosecutors were given legal language to describe how loud is “too loud.”

Previously, the vagueness of the “plainly audible” standard made it difficult to enforce in court, according to a memo by the city’s sound regulators.

The revisions also double the fines on violators to $1,000.

Wednesday’s action does not change the legal levels of acceptable noise – 75 decibels with a permit and 65 without. Nor does it change the practice of using sound meters to support charges of exceeding those levels.

The city, however, cannot afford enough $800-to-$2,500 sound meters to investigate all complaints, according to the Department of Administration and Regulatory Affairs. In other cases, department aide Christopher Newport said, a mechanical measurement may not fairly assess whether a violation is occurring – for example, barking dogs, pounding on walls or the revving of a motorcycle.

Therefore, the city will continue to use the “plainly audible” standard for non-bass noise, which it now defines as sound that “unreasonably disturbs” others. The new standard continues to give police officers leeway to make judgments based on volume, time of day, whether the sound is intermittent or constant, and whether it can be controlled easily.

Rocks Off has some of the specifics. The main objection to the revised ordinance was that it was too vague and and would be harmful to live music venues. I don’t have a good enough feel for this to make a judgment for myself. I sent an email to CM Melissa Noriega to inquire about this, and was told that Council has committed to a task force review of the revisions in six months’ time, so there will still be plenty of opportunity to give feedback on it. CM Noriega said they need to discuss entertainment districts going forward and that she would welcome any concerns or specific issues at atlarge3@houstontx.gov or 832-393-3003. You can always contact your district Council member or any of the other At Large members with your questions and comments as well.