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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