Why I Support Innovation in Transportation Services

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From Tom Rasmussen | February 28, 2014

During the last year, three new popular transportation service companies began operating in Seattle: UberX, Sidecar, and Lyft (pink mustache).  These new services called “transportation network companies” (TNCs) appear to be successful in our city, both from a demand and customer satisfaction perspective. I am very supportive of TNCs and want to see them thrive.Invatio

The problem with the TNCs is that they are currently not regulated for basic standards such as insurance, car inspection, driver background checks, etc.  Meanwhile, their taxi company competitors are regulated, which adds expenses to taxi operations.

After many months of fact-finding, I voted to support the following requirements if TNC’s are to be permitted to operate in Seattle:

  • Enhanced insurance requirements for TNC drivers;
  • Mandated vehicle safety inspections and driver background checks; and
  • Updated driver training courses to ensure safety and customer satisfaction.

The major issue debated yesterday by the Council Committee on Taxis, For-Hires, and Limousines was whether to limit (cap) the number of licensed TNC vehicles in Seattle, similar to how the number of  taxis are currently capped in our city. Going into yesterday’s Committee vote, the original proposal would have capped the number of TNCs at 300 throughout the entire city, a fraction of the number of TNC drivers that reportedly exist today.

During yesterday’s committee meeting, I introduced an amendment, along with Councilmember Bagshaw, to eliminate caps on TNCs in Seattle. That amendment failed on a 3-6 vote.  I want you to know why I voted to eliminate caps:

Seattle needs more transportation choices

As Chair of the Council’s Transportation Committee, I am working hard to give Seattle residents alternatives to using their privately-owned automobile for every trip they take. Too many cars on the road cause congestion and pollute the environment.

The need for public transit services to many Seattle neighborhoods is not being met due to shortfalls in our current transportation funding system. Because of the lack of stable funding, agencies such as Metro or Sound Transit will not be able to fully meet our rapidly growing transportation needs for decades.  The politics in Washington DC and Olympia do not support our transportation needs either.

Private transportation services such as TNCs can help meet our transportation needs, especially during peak hours and late nights and weekends when people say they cannot get a taxi.  TNCs can also provide services within neighborhoods and take people to public transportation stops such as light rail stations.

During the last year I worked closely with the car-sharing company Car2Go to ensure that they can operate in Seattle without negatively impacting street parking.  Car2Go has been wildly successful with over thirty thousand customers signed up in the first year.

Just like Car2Go, TNCs have been quickly embraced by the public as another valuable addition to our region’s transportation system.  Why stand in the way of these services which give people convenient options to owning or driving a car?

TNCs will not kill the current taxi industry

There is popular demand for TNC services in Seattle, I know this because of the many comments I have received over the last several months, as well as a 2013 report published by the City and King County that studied this issue.

Allowing TNCs to operate without limiting the number of vehicles will not destroy the traditional taxi companies.  Taxi owners are provided a huge incentive and financial reward for serving all neighborhoods 24 hours a day at regulated prices.

The reward is that taxis have the exclusive right to stop for people who hail them on the street.  The income from such rides is very lucrative and accounts for approximately two-thirds the taxi industry’s revenues.  Under the proposed ordinance the TNCs will not be permitted to stop for street hails.

The taxi owners have argued that they want a level playing field with the currently unregulated TNC companies.  Regulating TNCs for insurance, training, and safety requirements will do just that. But creating a level playing field does not mean eliminating competition.

Competition is good for passengers AND drivers

Competition between taxis and TNCs will improve conditions for drivers and passengers.  The current taxi experience in Seattle receives  mediocre to dismal customer reviews in Seattle (pages 35-37).  TNC passengers report better customer service, including response time and vehicle quality and driver courtesy.  There is accountability with passengers being able to rate each ride, which does not currently happen with traditional taxi services.

Some people argue for the status quo to protect the jobs of taxi drivers.  This is not borne out by the testimony we have heard.  The evidence shows that allowing TNCs to expand creates more jobs for drivers, many of whom are refugees or immigrants.  For example, see the following article in the Seattle Globalist on UberX drivers in Seattle.

Taxi owners fear that drivers will leave for the TNC operators.  If taxi owners must compete with TNCs for better service for passengers and better working conditions for its drivers, it is likely that they will rise to the challenge and improve.  We are already seeing evidence of this.   If the current taxi regulations have prevented taxi companies from being innovative, improving service, and upgrading the driver’s working conditions, then let’s adjust them but not at the expense of TNCs and passenger and drivers’ choices.

Next Steps

While I oppose caps on TNCs, it became clear to me after my amendment failed that in order to keep as many TNC vehicles on the road and continue their convenient services a compromise would be necessary.

I ultimately voted to support an alternate amendment that would permit every TNC company in Seattle (currently UberX, Lyft, and Sidecar) to have a maximum of 150 drivers “active” on their respective systems at any one time. In other words, each TNC may only have 150 drivers actively driving and picking up passengers at any one time.  The Committee did approve this amendment on a 5-4 vote.

The amendment was not a solution I wanted. But, it was far the better than the original proposal to cap all TNCs at just 300 total, via a random lottery.

I do not believe a cap at 150 active drivers per company would force UberX, Lyft, and Sidecar from discontinuing operations in Seattle. If the TNC operations are at risk it would be helpful for the TNC companies to share their data with us to show us why they will not be able to operate. Their refusal to share this information has frustrated some Councilmembers, and that, I believe was reflected in yesterday’s discussion and vote.

When the proposed ordinance comes before the full Council at our March 10 meeting, I will again propose an amendment to eliminate any caps on the TNC services.


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Comment from Dawit
Time March 2, 2014 at 12:07 pm

Hi, Councilmember Tom
I am a 12 year driver on taxi industry. I am a supporter of technology and innovations, but our problem here is this new comers like apps based companies are abusing the system in the name of technology and innovations. How?

1. By discriminating citzens with or without knowing telling citzens. If you don’t have credit card, smartphone or computer, we won’t serve you. This is a big time discrimination.I think,That means also they are choosing their customer. That is not wright. Look we taxi driver we pick up all kinds of people, with any kind of payment. This is not fare and also not wright for customer,their own driver and Taxi driver. The way how it works with taxi industry is I pick up for example3 or 4 customer from Grocerry and hospitals which is most of the time low paying fairs the 5th one will be one with card payment and high one and that way we will do our job. Now this apps based companies are selecting and picking up those customer. I don’t have a chance to pay my expense and take some money home.
This is, what we are asking? LEVEL PLAYING FIELD.

2.The other big thing is. At the beginning they just don’t follow the rules they don’t have business license no insurance and all that. You see as councilmember Bruce Herrell said at the previous meeting they are illegal. They brake the law. By just coming and start up the bussiness. Where are we ? Are we in some country, where the rule of the law not obeyed? I am confused. When I came to this country. I thought everybody follow the rules,but I see now things are not the way I thought. This apps based companines telling you (officialls). We know what we are doing. They are saying we are above the law.
Please Councilmember say no to this apps based companies STOP STOP
Litsen to Councilmember Mike, Bruce and Sally. They know better. We talked to them for about 8 months to a year.
Thankyou for giving me this opportunity.

Thankyou again!!!!!!!!!!!!!!!!!

Comment from Lee Shepardson
Time March 9, 2014 at 4:02 pm

I strongly object to the City of Seattle regulating the competition of private enterprise anywhere in our community. I especially object to the rhetoric that is asking the city to limit and restrict competition between the taxi and independent private transportation companies. The ability for these companies and individuals to compete openly, providing competitive costs to the public with improved service is vital to our community and is the fabric of our business community. I have lived in Seattle for 40 years and have used taxes and independent services for years. Since Randy Revell, the taxi service in Seattle has been one of the worst in the country. I would hope that the council and its staffs have experienced the services that have come to Seattle before judging their value to our community. The present service provided by the licensed taxi services (Yellow, Far West) is shameful. Here are a few bullet points about the older existing services.
• They seldom arrive when promised.
• The drivers are indifferent to your needs and you have no easy way to comment on their behavior.
• When talking to their dispatchers you’re treated with contempt when you ask why they have not arrived at their promised time.
• The service is especially poor when you live on the perimeter of the city.( South Park, Madison Park, Magnolia, Ballard etc) Many drivers do not respond to a call in those areas unless they already have a fare to that area because they don’t want to “dead head” that far from the city center. It’s easier for them to sit in a line at a hotel than drive across the city to residential areas.
• Many of the drivers do not know their way around the city (if they don’t have a GPS) and have trouble finding locations.
• Often I have experienced drivers that are absorbed in a cell phone conversation or listening to talk radio.
• Many of the taxi services use retired police patrol cars that are old and worn out. Some are disgustingly filthy. Refusal to enter a taxi because of its condition or the driver will leave you stranded.
The new services that have come to Seattle recently have brought to Seattle and many other cities an incredible improvement to the available services. Uber was a pioneer of innovation in car services across the country. I understand that their business model may not service or be right for everyone. But then again neither does Nordstrom’s. Is the city going to regulate Nordstrom’s so that they have to meet everyone’s needs? The new companies have brought to the market many new and welcome services and innovations.
• There is no cash used. The fare and tip is applied to your credit card previously provided. The fares are very reasonable and worth the service.
• Upon requesting service you are informed of when your car will arrive, the name and picture of the driver and a way to call him directly. You can immediately observe the assigned vehicle while it is coming to your location. In case they’re having difficulty finding you, you can call them directly.
• Upon arrival the drivers exit their cars, identify themselves, confirm that you’re their assigned customer and then assist with packages, luggage and the door.

• After every use of these services, you are requested to evaluate the service and equipment. Including an opportunity to make written comments. It’s common to get a personal response from the management of the company when you’ve had difficulties.
• Because of the quality of service and dependability, many people choose these new services as opposed to driving at night when they might chose to have an alcoholic beverage. Many will decide not to drive themselves because these reliable services are available. Many have experienced hour long waits for transportation that was promised in minutes. Especially if you are at a remote part of our city.
I definitely support the city making sure that all these services are safe and have proper insurance. The city should not interfere with competition and allow the market place decide what services and who the public want to serve them. The better ones will survive and the poor ones will not or will have to improve themselves. The old taxi companies in Seattle need to modernize their businesses to meet the needs of today’s public. The success of CarToGo as an alternative to rental cars is the best and most recent example of innovation that provided the public with a much needed service.
Regulating competition in this very important service industry in Seattle, will forever limit the public’s access to much needed and wanted services. Please consider carefully your responsibility to provide the public the competitive services they want and need.
Best Regards, Lee Shepardson
Madison Park

Comment from Rajinder Singh
Time June 18, 2014 at 9:57 pm

dear Mr. tom Rasmussen, Since then seattle taxi is regulated why taxi license holders had to pay that much insurance,why not keep license open for for new drivers.As uberx get that many signatures from public that means city of Seattle did a big mistake by regulating a taxi Industry and we owner operator loose all that money(insurance, vehicle standard,vehicle inspections of city choice and all fines and fees) with the mistake of city of seattle. So we have right to claim From city of Seattle.

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