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There ain’t no free rides

Rideshare_Regulation_Seattle-300x218Yesterday Lyft and Uber had their day in court. Actually they had their day before City Council’s Public Safety committee, as reported by Vianna Davila of the San Antonio Express-News. The committee reviewed the issues regarding whether the ride share companies should abide by the existing taxi regulations or if a new set of regulations for ride sharing should be drafted. Nothing was settled and SAPD Chief William McManus will be back before the committee in a month with a report and a possible recommendation. One thing is for certain. There probably won’t be any free rides when this is done.

By no free rides, I’m talking about fees associated with permitting and other aspects of taxi regulation written into our city’s taxi ordinance. Under the current ordinance structure, both Lyft, Uber, and any other ride share company would be subject to the same fees and requirements of taxi companies. This would also apply to drivers who sign up as ride share drivers. That’s probably something a lot of people hadn’t considered and something the taxi companies will not let slide as this moves forward.

Probably the few fees that will cause the greatest amount of kickback will be the citywide operating permit charged per vehicle per year and the driver permit. What this means is that the dynamic nature of both Lyft and Uber could also cost them more to operate than a taxi company. While it’s unclear how to apply that to the model, one thing is for certain. You can bet both will kick back on those two fees to salvage flexibility.

San Antonio won’t be the first city to tackle these issues. Even though the companies are currently operating in cities in California under rules defined by the California Public Utility Commission, some of those cities are looking at whether further regulations are needed.

Six months after opening the city streets to ride sharing, San Francisco is back to the table debating whether new changes are needed to address a number of concerns, some being the economic impact the companies are having on the taxi industry. One point made was that the drain of drivers from the traditional taxi companies to ride share companies has reduced the number of handicap accessible cabs available for hire in the city.

“Part of the concern for (Christiane) Hayashi, (director of taxis for the San Francisco Municipal Transportation Agency) is the impact on the taxi industry’s service for people with disabilities. Taxi companies are returning medallions to The City as more drivers decide to work for the new industry, she said. That has reduced by more than half the number of wheelchair-accessible vehicles operating, from 1,400 a month to fewer than 600.”

Looking at the situation, it appears the first set of regulations issued by CPUC were just to get the companies back in business. However, CPUC made it clear in the article that there will probably be another round of discussions on regulations. “Marcia Zafar, director of policy for the CPUC, said the state agency has not completed the regulatory process.”

One area other cities are also dealing with, in regards to regulation, is airport pickup. Currently, ride share vehicles are banned from Los Angeles International Airport and Nashville is evaluating whether to either require permitting for the vehicles or ban them entirely.

In Dallas the regulations appear to be headed for a network wide license requirement, but would not require operators to be permitted to drive in the system. Lyft supports such regulation, as expressed in a letter to the Dallas City Council. Seattle passed a similar type ordinance but went a step further by capping the number of ride share vehicles allowed. Lyft opposed the ordinance, most likely because of the cap.

In the discussion surrounding the Seattle changes, several council members expressed disappointment on Lyft’s failure to work with the city in developing and drafting the regulations.

From the live tweeting by Geekwire of the council meeting, “It begs questions,” (Seattle Councilwoman Sally) Clark said. “You are doing so many things right, but if you would only communicate and collaborate better with regulators … How you raised this much money and not had a better plan to engage with regulators is amazing. How many wars can you wage simultaneously in cities and states in the U.S.? It’s incredible.”

One of the reasons cities are requiring the ride share companies to operate under strict guidelines is to not only establish somewhat of a level playing field, but to also make sure the companies are operating under the terms of the regulation.

In Houston recently, a Lyft driver picked up a Houston city investigator who cited the driver for operating during that city’s cease and desist period along with operating a vehicle with an expired inspection sticker.

“You are not doing yourselves any favor in getting the laws changed by operating illegally,” (Chris Newport, chief of staff for the city’s regulatory affairs department) said.

To be fair, city officials in almost all cities faced with the regulatory issues feel the ride share companies are filling a niche and are encouraging their business. But, all feel it is important for these companies compete fairly with taxi companies who have been providing service in the cities for decades.

“I’m not going to allow those that are more taxi-oriented to come in under a different set of rules,” (Houston Mayor Annise) Parker said in the article. “I think, level playing field, and that competition is good. These ride share programs are a wave of the future, they’re going to have to have a different set of standards. But I’ll tell you absolutely, whether you’re a ride share or whether you’re a cab or a limo, background checks, inspections of the vehicles and the appropriate level of insurance, those are non-negotiable.”

San Antonio is just coming into the game that other cities have worked through and are continuing to work with. The best approach for San Antonio is to look at the issues and solutions of these other cities to help draft a solid recommendation that allows the companies to operate in the city, but moves towards leveling the field with taxi companies.

But regardless of the approach the city will plan to take, you can bet some regulatory fees will be in the mix for the companies to operate. Otherwise, it’s not really fair competition.

 

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