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Washington Wave

And we circle back to Uber and Lyft

Took longer than we thought it would, but on we move to the next contentious debate.

Companies that connect riders with drivers via smartphone and tablet applications could operate legally in Houston, subject to certain conditions, under a proposal to be considered Wednesday by the City Council.

The suggested changes to Houston’s taxi and limousine laws follow more than a year of discussions among city staff, taxi and limo operators and the new companies, Uber and Lyft.

Lyft’s future in Houston, however, remains uncertain. A spokeswoman said the company was unwilling to use the driver background check system required by the city, believing its own procedure is better.

Local cab and limo companies sought to keep Uber and Lyft out of the Houston market, citing concerns about their safety and insurance. Cabbies said they felt unfairly burdened by some city rules that the upstart companies wanted to ignore.

Greater Houston Transportation Company, owner of the local Yellow Cab and United Cab businesses and the city’s largest taxi company, remains opposed to the proposal, spokeswoman Cindy Clifford said.

Taxis must provide trips for disabled passengers, but the same demand is not placed on the so-called transportation networking companies, Clifford said.

Part of the discussion includes a rule that would require the transportation network companies like Uber and Lyft to guarantee that five percent of their drivers can accommodate wheelchair passengers. For what it’s worth, a good friend of mine who now lives in North Carolina suffers from multiple sclerosis and spends most of her time in a wheelchair. When she and her husband (who is from Houston; she grew up in Sealy) last visited, they drove a normal rental car, some four-door sedan. Her folding wheelchair fit easily into the trunk. The challenge was getting her from the wheelchair into the car and vice versa. Her husband was well-practiced in this, and though it took a couple of minutes at each end, he got the job done. Anyone could have done this, with some patience and a bit of upper body strength. I’m saying all this because I’m wondering what such a requirement by the city would look like. Is it about the capability of the vehicles, or of the drivers, or both?

In revising its rules, Houston built on policies in other parts of the country, then “closed a gap in some areas,” said Christopher Newport, chief of staff to Mayor Annise Parker.

As in other cities, the new companies have pressed into Houston on shaky footing. Uber and Lyft launched preemptively in February, despite city officials urging them to be patient. The companies continued discussions with the city to change the taxi laws.

“The biggest takeaway is when everyone comes together to work, we end up coming to a great resolution that is going to be best for riders and for drivers,” said Chris Nakutis, a Midwest general manager for Uber who oversees operations in eight cities, including Houston.

However, a Lyft spokesperson, Chelsea Wilson, said the city’s code would still inhibit its operations, in part because the city requires a criminal background check that includes fingerprinting. Lyft’s system of background checks is more thorough, Wilson said.

Changes to the taxi and limo laws also would forbid Uber and Lyft drivers from soliciting rides through means other than their online systems, and would ban them from cab stands “near any passenger depot, hotel, airport, ship or ferry landing, bus stop or station.”

Rules regarding commercial use of Houston’s passenger airports mean drivers for Uber and Lyft cannot pick up or drop off passengers without a city permit. Cab and limo companies, as well as airport shuttles, pay for annual permits to come to the airport, and also pay a per-trip fee.

I’m okay with the restrictions on soliciting rides, the ban on using cab stands, and the permit requirements for going to and from the airport. I wouldn’t have thought people would use these services for airport rides, but apparently they do. As far as the concerns expressed by Lyft spokesperson Chelsea Wilson go, I can’t see why it wouldn’t be acceptable under the proposed ordinance for a TNC to have stricter background check requirements, as long as theirs contain the city’s requirements. It’s not clear to me what the stumbling block is there.

If you’ve been following this blog for awhile, you know that I am generally favorable towards revising the existing vehicle for hire code to allow Uber and Lyft and the like to operate in Houston. I have some reservations, mostly stemming from the disdain that Uber in particular has shown towards the existing code while the process was in the works, but overall I think the addition of TNCs will be a net positive. A few weeks ago I noted some objections raised by Lauren Barrash, founder and CEO of The Wave, in one of the many stories on Uber and Lyft. She contacted me after that post came out, and we corresponded via email and had a longish phone conversation, in which she went into a lot more detail about her concerns. I was going to write a full post about all we discussed, but between the high volume of activity lately and life in general (cue tiny violins), I never quite got around to it. So, I’m going to take this opportunity here to boil it all down to two points that had some resonance with me and that I haven’t seen discussed much here or elsewhere.

1. How exactly is enforcement going to work? This is one part lack of resources – Barrash says the city doesn’t have enough inspectors now, and as we know there’s a looming budget crunch that may put even more pressure on this – and one part the fact that unlike cabs, Uber and Lyft vehicles aren’t necessarily readily identifiable. Yes, I know about the Lyft pink mustaches, but right now at least some Lyft drivers aren’t using them, either to avoid being cited or to avoid harassment. However you slice it, there will be a lot more vehicles subject to city ordinances, but no more inspectors or police officers to oversee them.

2. Other safety issues. This includes a range of concerns, such as drivers having access to customers’ cell numbers, drivers being heavily dependent on smartphones for dispatches and directions, drivers contributing to congestion and general chaos at large events like the Rodeo, and drivers potentially competing with each other (since they can know where their peers are) for pickups in the hot zones. Also a potential problem is that there are no shift limits or rest requirements for Uber and Lyft drivers.

There’s more, and I may return to this subject now that vehicles for hire are back on the front burner, but you get the gist of it. I’m sure there won’t be a vote this week, so we have at least a few more days to talk about this. The Highwayman has more.

Your daily Uber/Lyft update

From the Tuesday Council committee hearing at which the draft ordinance was reviewed.

Despite having a newly-released draft ordinance in hand, City Council members spent a Tuesday committee hearing asking many of the same questions about regulating ride-sharing services as they did months ago.

Echoing concerns raised by taxi and limousine companies, council members grilled Parker administration officials about setting rules for emerging services that connect riders to willing drivers via smartphone applications.

Repeatedly throughout the three-hour hearing, cab and limo drivers stood up as council members asked questions that centered on their fears that new regulations would create an unfair business advantage for the new services and eat away at their livelihoods.

“What will the effect be on the public if the taxicab companies are no longer viable?” Councilman Oliver Pennington asked.

“The taxicab companies will continue to be viable,” said Tina Paez, director of the city’s Department of Administration and Regulatory Affairs. “They probably will lose some market share.”

[…]

The administration’s conclusion is that existing operators will adjust, pointing to studies from other cities that have chosen to regulate, rather than ban, the ride-sharing services.

“What we’ve seen, especially if you look at that Seattle data that just came out from last year with two years of operations … they’ve actually seen a growth in the number of trips and a growth in revenues,” Paez said. “It’s only 3 percent, but if they were having a significant impact where they were cannibalizing, you would have seen a significant decrease.”

Lauren Barrash, founder of The Wave jitney shuttle service, disagreed.

She said her business already has seen a decline because her target market is the same as Uber and Lyft, which have been operating in Houston since February.

Ahead of a City Council decision, both services had offered free trips until last week, when Uber said it would charge riders.

Critics, however, say the two have been charging customers for weeks.

“My April revenue is the lowest in 2014 and 2013,” Barrash said. “January is traditionally our lowest month. Currently, for April, we’re at half of what January 2014 was. … I might not be as big as Yellow Cab, but I will be impacted the quickest. It will put me out of business.”

That would be unfortunate if it happens, and I confess I hadn’t given much thought to non-cab operators like The Wave. With all due respect, however, Council is no more obligated to protect jitneys like The Wave than they are to protect legacy cabs. I’d hate to see The Wave go under, but I’d also hate to see Houston try to deny the existence of change in the business. The basic idea behind the draft ordinance, which will make Uber and Lyft comply with the same safety and inspection requirements as the cabs, seems like the right direction to me. I look forward to Council finishing the job. PDiddie, who is not a fan, Campos, who thinks the lack of representation by Uber/Lyft supporters at the meeting could upset the conventional wisdom about how this turns out, and The Highwayman have more.

Uber

Mark me in favor of this.

A smartphone app could be the subject of the year’s most spirited regulatory battle at City Hall, as lobbyists line up for a fight that pits taxicab companies against a car-service technology company called Uber.

The firm’s entry into more than 20 U.S. cities has sparked lawsuits and cease-and-desist letters from taxi owners concerned for their livelihoods and regulators accusing the firm of skirting the law. Uber says it is merely a broker between riders and drivers, using a smartphone app to make getting a ride more efficient.

Uber must seek a change in ordinance for its business model to work in Houston, said Uber CEO Travis Kalanick. Company representatives first met with city officials in May; a social media marketing push launched in recent days.

The service the San Francisco-based startup wants to offer in Houston is UberBLACK, which would allow riders to hail town cars – also known as black cars or sedans – using the Uber app, alerting the nearest participating driver to respond. The fare is based on speed and distance using each smartphone’s GPS technology, with the fare charged automatically to the customer’s credit card.

Drivers who want to participate are given smartphones with the Uber app installed, said company spokeswoman Nairi Hourdajian, and must pass a background check and comply with all city licensing rules. Drivers continue to work for their limousine company or themselves; they do not work for Uber.

Houston is the last major U.S. city in which Uber does not operate, largely because of the city’s “draconian” regulations, Kalanick said, calling the city’s rules typical of those negotiated by taxi companies to protect themselves at the expense of riders.

“I don’t think taxis in Houston are as readily available as other cities, and (I’d like) to have something like this where you can call, it’s on-demand, they’re there, they’re always very reliable, very respectful,” said Houstonian Natalie Petratis, who uses Uber when visiting her native Chicago.

Uber wants to drop the minimum fare for a sedan ride in Houston from $70 to $5.50; wants regulations changed to enable on-demand service, as opposed to rides arranged at least 30 minutes in advance; and wants to delete the four-car minimum required for new limo and sedan companies, among other tweaks.

This is a no-brainer to me. Regulations that inflate prices while limiting choices are regulations in need of overhaul. Christopher Newport of the city’s Administrative and Regulatory Affairs department correctly noted the parallels between Uber and things like pedicabs, REV Houston, and the Washington Wave. To that list, I’d also add food trucks and their ongoing fight to be allowed to operate downtown.

I have no issue with the cab companies working to protect their interests, and I’m sure Uber will be disruptive to them, but I see no reason to stifle this kind of innovation. I presume cabs continue to exist in the cities where Uber already operates. As such, I see no need to fear it operating here. Uber sent me some information about what has gone on so far and what they’re specifically seeking to change. Here’s the letter from Administrative and Regulatory Affairs that outlines the relevant ordinances; Uber’s response to ARA’s letter; and Uber’s briefing statement about what it does and where it does it. If all that doesn’t have you convinced, note that in addition to using Uber to arrange a ride, you can also use Uber to request an ice cream truck on demand. Need I say more? Hair Balls was on this as well.

Washington Avenue lite

That’s what someone thinks White Oak Drive is becoming.

Is White Oak Drive becoming a cozier, more walkable version of nearby Washington Avenue as a restaurant-entertainment hub?

One local real estate agent thinks so.

White Oak is more concentrated with restaurants and bars in a much smaller area, said Jeff Trevino, a local commercial real estate agent who has done work on both streets.

Washington is three miles long and the restaurants and bars are spread out, he said. By comparison, White Oak is about a mile long, and many of the restaurants are popping up along a quarter-mile stretch between Studemont and Oxford.

BB’s Cajun Cafe recently announced it will open a new location on White Oak at Studemont.

Tacos A Go Go, D’Amico’s Italian Market, and Christian’s Tailgate are also planning to open soon there.

Already on White Oak are Onion Creek, a cafe and bar; Fitzgerald’s nightclub; Jimmy’s Ice House and Beer Island.

Most of the new restaurants are in old buildings, Trevino noted, which gives the area charm. A greater percentage of bars and restaurants along Washington are in new strip centers, he said.

It’s a little hard for me to judge the comparison, since none of these places are open yet. I’ll say this much – I have no idea where all of the patrons of these future eateries are going to park. The properties that are being rehabbed for the new venues didn’t have much parking space on them, and street parking is already at a premium thanks to Onion Creek. And if you look at a map of the area, there’s not much available on other streets nearby for the Studewood to Oxford area. If the Washington Wave were to extend service to White Oak would help some, but I don’t know how much. Don’t get me wrong, I’m delighted to have all these places opening up so close to where I live, I’m just wondering how they’re going to deal with that.

CultureMap previews the Wal-Mart

Some interesting stuff here.

Restaurants and stores on Heights Boulevard, along with new pathways and landscaping on the boulevard’s esplanade, will be part of Ainbinder Company’s Walmart-anchored retail development in the Inner Loop of Houston, the developer of the project said Friday.

The project, called Washington Heights, is planned for 23 acres near the southwest corner of Yale Street and Koehler, just south of Interstate 10 and the Heights community. Much of the project will be located on industrial land vacant land that formerly was the site of a Trinity Industries steel fabrication plant.

“We are going to take this land from a factory site to a fairly upscale development,” said developer Bart Duckworth, principal in the Houston-based Ainbinder firm.

Washington Heights will also spread onto land Ainbinder is acquiring on Heights Boulevard, south of the freeway. An old apartment project there will be demolished to make way for the new retail space, Duckworth said.

You can see the back end of the apartment complex here, looking east from Koehler Street. I’ll reserve judgment on that for now, but I’m pretty sure extending this development across Yale like that isn’t going to alleviate anyone’s concerns about traffic. I’m already envisioning a new traffic light being installed at Yale and Koehler to handle the exiting and left-turning vehicles.

Real estate broker Lance Gilliam of the retail division of Moody Rambin Interests has been handling the project.

Gilliam hopes to attract chef-driven restaurants, local boutiques and non-chain outlets to the retail space on Yale and Heights Boulevard, as an extension of the restaurant development that has occurred along Washington Avenue in recent years.

“We have really made an effort to reach out to the Houston, and also to Texas cities including, Austin, to see who that is out there would best serve this community,” Gilliam said. “We want shops that are unique and add to the community.”

Color me skeptical of that effort. I’m not sure how many driven chefs will want to share space with a Wal-Mart, but I suppose anything is possible. Maybe if pedestrian access between this site and Washington Avenue is improved, and/or if the Washington Wave extends service in that direction, it might make the proposition more attractive to the kinds of chefs and restaurants they seem to want. Or it might not. I know that when they were filling out the Target site on Sawyer that I was hoping for some decent food options, but what we got was Chili’s, Panda Express, and Freebird’s. Seems to me that’s the more likely, and more fitting, outcome over there, but I guess we’ll see.

Ainbinder is seeking an agreement with city officials to make public improvements to the area on city owned property, Duckworth said.

Under the proposal, Ainbinder would spend $6 million to widen and expand streets around the project, beautify nearby bridges, improve drainage, build new sidewalks, and create a crushed rock path and landscaping in the esplanade of Heights Boulevard, he said. Ainbinder would be reimbursed for the public improvements over time as the project reached completion and occupancy goals, in a government sponsored program that has been used for other projects around the state, Duckworth said.

The “government sponsored program” Duckworth is referring to is apparently a 380 Agreement. Which apparently has to be approved by Council first. Expect there to be some pressure applied to Council members about that. Usually, other Council members will defer to the District member on matters like this in their district, so watch what CM Ed Gonzalez says and does very carefully.

Walmart’s trucks will enter the store property off of Koehler Street, next to Berger Iron Works.

There’s already some truck traffic on Koehler, for the Berger Iron Works and for San Jacinto Stone, but for the most part we’re not talking 18-wheelers. Better hope widening Koehler is part of the plan.

New jitney rules coming

City Council is preparing to make some changes to its ordinances regarding jitneys.

The goal of the new rules, some of which also will be established by mid-September in a “green” ordinance that will govern the use of zero-emissions vehicles, is to “allow the market to function appropriately,” said Chris Newport, a spokesman for the city’s Department of Administration and Regulatory Affairs.

Newport said the previous rules are outdated and inhibit new ideas.

“The changes create a flexible framework and set the foundation for the industry to grow without standing in the way of technology and investment,” he said.

Erik Ibarra, owner of Rev Eco-Shuttle, said that is exactly what the new ordinance will do. The changes to the ordinance may “regulate us out of business,” he said.

I’ve written about RevHouston before. Ibarra’s concern appears to be because his service is currently neither fish nor fowl. Jitneys are being defined as having between nine and 15 passengers and operating on a fixed route. If that sounds like the Washington Wave to you, go to the head of the class. RevHouston is using a jitney license that Ibarra got to keep from getting tickets for not complying with taxi ordinances, but his service is for six and fewer at a time, and really is more like a taxi since it’s not on a fixed route. The city says it has a plan for that:

Although Ibarra’s two six-seat vehicles would be allowed to continue operating under the law under an exception, he said the new ordinance may not allow him to grow or to purchase more vehicles.

City officials say Ibarra’s company will be able to operate as a pedi-cab under the “green” ordinance, which the council is expected to consider in mid-September.

[…]

Ibarra said he is concerned that his company’s growth potential will be limited before the new regulations are in place.

He agrees that many of the changes proposed in the ordinance will be good for the industry but questioned why his company will be left in limbo.

“Why not put the green ordinance first?” he asked, noting that he would be in “regulatory purgatory” for six weeks. “It just seems backwards to say, we’re going to regulate you out of the market first, but don’t worry, we’re going to set up a green ordinance for you. … If this passes, they’re not going to prevent other companies from growing, just my company.”

I’m sure there’s a reason Council is doing the jitney update before the green ordinance, but regardless of that it does potentially leave Ibarra in the lurch. What happens if the green ordinance doesn’t get passed, for example? It probably won’t matter in the end, but I can’t blame the guy for fretting about it. As for his concern about his company’s growth potential, I must say that classifying RevHouston as a form of pedicab makes sense to me. As long as the green ordinance wouldn’t forbid him from operating, say, a ten-passenger eco-shuttle, I don’t see the problem. Am I missing something?