Editorial: Update city rules for taxi and ride-share services

By The Herald Editorial Board

The city of Everett’s attempt to give the green light to ride-share services, such as Uber and Lyft, to operate under the same regulations as for-hire taxi companies, has stalled just short of an expected vote last week by the city council.

The council and city staff had been working on regulations since January to create uniform regulations that would apply to taxi businesses that are already licensed in the city and the new “gig economy” ride-share services, also known as transportation network companies, that connect riders and drivers through websites and smartphone apps.

Last week the city council postponed a vote on the ordinance after representatives for Uber and Lyft raised objections regarding insurance requirements, compliance audits, vehicle inspections and background checks of drivers, as reported Monday by The Herald’s Chris Winters. Action will now wait for further research by city staff.

In existence for about five years, the ride-share companies have spread throughout the nation, providing another transportation option for those who don’t want to deal with the expense of a personal vehicle, while providing employment for the drivers.

In that short time, drivers for Uber, Lyft and similar services, have come to outnumber drivers for traditional taxicab companies by at least 2 to 1, writes Michael Farren, a research fellow at George Mason University’s Mercatus Center and author of a study, “Rethinking Taxi Regulations.”

Traditional taxi companies, Farren said, will have to adapt, and those cities that don’t rewrite regulations will stifle competition to no one’s benefit.

Farren, in a commentary written for The Herald in February, praised the city for undertaking the effort to reform the city’s outdated taxi regulations, though he urged city officials to consider amendments to its ordinance regarding licensing and fees that could discourage local competitors to the nationwide companies.

Specifically, Farren said the proposed $1,000 fee for companies contracting or hiring drivers would be a barrier for a small company. And a requirement for ride-share drivers to get a city business license, at a cost of $50 to $100, would be a hardship if a driver had to get a business license for each city in the area he or she might potentially serve.

The latest draft of the ordinance addresses the business license requirement for companies, creating two tiers and requiring a fee of $1,000 for companies with more than 10 affiliated drivers, but $500 for those with 10 or fewer drivers.

Farren also noted that if the intent is to create regulations that apply to both platforms, the ordinance should then allow the ride-share services to cater to “street hails,” rather than solely through the app. Conversely, traditional taxi companies could also offer a hailing app for their customers.

A “street hail” amendment was considered by the city’s Public Safety Committee but was not included in the most recent version of the ordinance.

Recent objections by representatives of the national companies seem less reasonable.

During last week’s council meeting an Uber representative said the company wouldn’t be able to comply with the insurance requirements the city has outlined. But the minimum coverages the city included in the proposed ordinance do not seem out of line and are similar to those proposed in legislation under consideration by state lawmakers this session.

The Uber representative also objected to providing the city with a list of drivers who it contracts with, calling that proprietary information.

The ordinance also would have required vehicles to be inspected yearly by a certified mechanic who is not affiliated with the taxi or ride-share company and that companies be responsible for criminal background checks.

None of these seem onerous, especially for a multinational company.

As long as all the requirements are applied equally to ride-share and taxicab companies, the requirements now outlined in the proposed ordinance are reasonable requests that assure safety for passengers and drivers and fairness for the companies.

The state’s proposed regulations, because they would apply across the state, would be preferred. The bill passed the Senate, but remains in the House Rules committee, as the Legislature begins a 30-day special session.

Until the Legislature passes statewide rules, Everett and other cities in Snohomish County should adopt their own, providing competition and confidence for riders regardless of the car they choose to hail.

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