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The City Council Committee on Taxi, For-Hire, and Limousine Regulations will hold its penultimate meeting tomorrow to discuss draft regulations to legalize and regulate new Transportation Network Companies (TNCs) such as Uber, Lyft, and Sidecar. In addition to adding 50 new taxi licenses, the draft legislation would regulate TNCs by imposing annual licensing fees, requiring vehicle inspections, specifying insurance standards, requiring state approval of GPS-based fare calculation, and imposing stricter driver requirements. Many of these regulations are welcome developments, especially clarification of the currently-murky insurance standards. But the core of the legislation — limiting each TNC to 100 drivers unless they hire currently licensed for-hire drivers — is terrible policy.

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This is an issue very important to STB because TNCs reduce the need for car ownership, which builds the market for transit and restrains the cry for parking that threatens to strangle our city’s growth.

A healthy transportation system is redundant. Walking, bikes, transit, Car2Go, TNCs, and taxis provide a robust set of options that have different strengths and weaknesses, and cover for each other when one fails. For example, TNCs are at their best when transit is at its worst, supplying extra capacity on nights, weekends, and in between urban villages (such as Queen Anne to Fremont, or Wallingford to Capitol Hill).

Seattle has an exceedingly low number of taxis, with no new licenses being issued since the early 1990s.  What taxis we do have are not popular with the public, with only 10% of those surveyed for the City’s own study ranking taxi service as very good (compared to over 70% ranking TNCs in that catagory). We don’t care, in principle, if the market fills the demand for taxi-like services with TNCs or conventional taxis, as long as regulations allow one or both to satisfy demand. In practice, however, TNCs are bringing innovation to a stagnant sector, 21st century prerequisites like GPS tracking, smartphone dispatching, estimated arrival times, dynamic management of the supply of cars, and cashless payment.

The unfairness of the current taxi regime should not be a reason to effectively shut TNCs down. Instead, Seattle should relax or eliminate taxi limits, along with the Rube Goldberg system of leasing agents, separate dispatchers, and artificial scarcity that only raises the costs of market entry. Taxis should be freer to innovate and compete, and already we are seeing attempts to bring taxis and for-hire vehicles into the 21st century through apps like Flywheel.

We urge the Council to let innovators innovate, and to produce regulations that answer safety concerns while letting TNCs thrive.

The committee meeting is Thursday (1/30) at 2:00pm in Council Chambers. A vote is expected on February 14th. The STB Editorial Board is Martin H. Duke and Matthew Johnson.

89 Replies to “Editorial: Uber, Lyft, and the City Council”

  1. Interesting initial analysis. not sure about the conclusion. Seems that the conclusion draws from selective use of the data. Both Las Vegas and Boston have more cabs/thousand residents yet they pay more than Seattle. I’m disappointed. Try again please because other factors would seem to be involved. Possibly, fuel prices, etc?

    1. Both Las Vegas and Boston have cabs which get better customer satisfaction ratings than Seattle, though. Seattle’s cabs are notoriously disliked, which probably means they have to charge less than cabs which are considered decent.

  2. Why are we even entertaining the idea of these corporations? No one will even insure them. No insurance, no business model .

    1. I’m curious…how has insurance worked for other commercial drivers, such as delivery drivers? Were my 4 years of pizza delivery in college technically insurance fraud? (I didn’t carry commercial insurance.) When I was hit-and-run by an SUV in 2002 — I was getting into my car and the SUV side-swiped me, closing the door on my leg and breaking my fibula — my employer picked up the tab for medical and workers comp, but my insurance never got involved and I fixed the car (a new door and mirror) out of pocket with junkyard parts.

      1. This is an interesting example in this context precisely because these companies DO NOT see drivers as employees and will NOT step into the breech in a situation like this. Lyft is currently facing a class action along these lines. I’m all for additional transit options and think adding taxi licenses is a good idea but there are real social costs to these “innovations” that rely on an independent contract model to avoid the responsibilities on either side of these middle men: in the end it the customer and driver assume all the risk while these companies merely operate a “platform” for a fee.

      2. How is it that delivery driving is an extremely common vocation (be it pizza or newspaper deliver or whatever) yet no readily available commercial insurance exists? Has it really been a don’t-ask-don’t-tell situation for millions of low-income workers over the years?

      3. Shane, do you really think that a pizza delivery driver would pay to get commercial insurance if he could get avoid doing so? Pizzas don’t talk all that much and the driver (and the store owner) can usually get away with it.

        That is why the city has to make these TNC drivers get commercial insurance. They won’t do it on their own unless the law makes them. And the [ad hom] TNCs have shown that they won’t require their drivers to do so either.

      4. So, you don’t need commercial insurance to carry someone in your car for free, but you do if you charge them money? Why? If it’s the same car and the same risk, what’s the difference?

      5. @asdf: The assumption is that if you’re carrying people (or pizzas) for money you’re driving many more miles per month (and more stressful miles, in a wider variety of unfamiliar places) than if you’re just driving for personal transportation. And if your personal insurance won’t cover your commercial driving (because it doesn’t want to be on the hook for unusual numbers of miles driven or miles driven in unfamiliar places), well, that’s covered in the terms of your personal insurance contract. But you’d better make sure you’re actually covered when you’re driving, that’s a pretty important tenet of the rules of the road!

        Now we could probably agree that in general per-mile car insurance would probably be fairer (and more efficient) than per-month with a split between personal and commercial, but the insurance industry has only just started to offer flexible per-mile options.

    2. Actually a major insurance carrier is about to start insuring Ridesharing. They’ve been slow in action, but it’s about to happen.

      1. I’m a Lyft driver, and because of those issues I do not move while signed into the platform unless I am managing an active request. If I do a trip outside of a high-demand area, say Capitol Hill to Edmonds or something, then I’ll sign out of driver mode until I can deadhead back to somewhere I’m reasonably likely to get a request, say Ballard or Green Lake.

        I know that my personal insurance would still likely deny any claims, and I’ll be the first to buy any new commercial insurance products that emerge from this new industry. I think the MetroMile concept could actually apply really well here, insuring TNC miles driven at a higher rate, but not penalizing the full policy, recognizing that the driver may drive 20 hours one week and none the next.

      2. Why don’t you guys just get commercial insurance? You can get a policy for $4K a year. I doubt that any insurance company is going to do it for less because how would they know if the vehicle is being driven 16 or 168 hours a week.

      3. ” If I do a trip outside of a high-demand area, say Capitol Hill to Edmonds or something, then I’ll sign out of driver mode until I can deadhead back to somewhere I’m reasonably likely to get a request, say Ballard or Green Lake.”

        No wonder it is near impossible to get a ride on Lyft (or any rideshare service) in an out-of-the-way place like Edmonds.

        For all the grief we have about conventional taxis, at least if you’re in a suburb, they will show up.

      4. “Why don’t you guys just get commercial insurance? You can get a policy for $4K a year.”

        Sir, apparently you are not really familiar with the issues being discussed here. You do realize that these cars are all covered by auto insurance when they are NOT taking part in a ride. And they are insured under the company policy when they are engaged in rideshare.

        Saying otherwise repeatedly and calling rideshare drivers names will not change that situation at all.

      5. Cascadia: “You do realize that these cars are all covered by auto insurance when they are NOT taking part in a ride.”

        @Cacadia, No, they are not insured. Non-commercial insurance policies have an exclusion for business use of the vehicle. That is why Bellinghammer stated: “I know that my personal insurance would still likely deny any claims.” Lyft,Sidecar and UberX, both the companies and drivers, have a business model based on insurance fraud.

        To think about this clearly, you have to drop the corporate double speak. What Lyft does is not “ridesharing” – it is a for hire service. The money that a Lyft driver gets is not a “donation” – it is a cab fare. Lyft/Sidecar/Uberx are not part of the “sharing economy” – they are big vulture capital firms that are thumbing their noses at the law and will throw their driver “partners” under the bus when there is an accident.

      6. “For all the grief we have about conventional taxis, at least if you’re in a suburb, they will show up.”

        Well, there have been comments in this very blog to the effect that they won’t. Apparently your taxis in Seattle suck exceptionally badly?

    3. Sidecar has a $1 Million commercial policy that covers drivers from the time they accept a ride to the time they drop off the passenger. They explicitly claim this policy steps in if your personal insurance denies the claim, which is virtually guaranteed. Uber just recommends that you carry commercial insurance and presumably leaves you out in the cold. I think they carry insurance that covers them and the passenger, but they are vague.

      1. UberX has the same policy as Sidecar. Sidecar’s policy reverts back to the vehicle’s policy when the driver hits the “drop off” button. This describes the situation during the New Year’s eve fatality accident in California. The driver was probably on his own non-commercial policy which was probably due to the business activity exclusion clause.

    4. @asdf, it is not the same risk. Uber-taxis are on the road a lot more than private cars and have a higher incidence of accidents. They are in a different risk class.

  3. I used Uber once and it was rediculously expensive. I’ve used Flywheel a few times and find it’s the best option when transit, Car2Go, and driving aren’t options (in that order).

    1. The plural of anecdote isn’t data. :)

      Uber costs $7 for the drop, $3.50 per mile, and $0.30 per minute waiting, with a $12 minimum. Regular cabs cost $2.50 for the drop, $2.70 per mile, and $0.50 per minute waiting.

      For someone like me, who regularly tips 20-30% for a regular cab ride, Uber is hardly more expensive at all. A 4-mile trip with 5 minutes of traffic delay costs $15.80 in a cab, or about $20 with tip. The same trip cost $22 in Uber. Given Uber’s far higher service quality, that’s hardly “ridiculously expensive”.

      In contrast, UberX has a base fare of $2.14, $1.63 per mile, and $0.30 per minute, so the same trip would cost a mere $10.16 (again, tip is included). In other words, a cab would be twice as expensive!

    2. UberX is consistently cheaper for me than taking a taxicab. (Even moreso now that they’ve dropped rates.)

      And Uber black-car is far more comfortable than a Prius for taking multiple people to the same destination.

    3. Flywheel is effectively an UberX-like front end for Eastside for Hire which provides reasonable flat-rate service throughout the greater Seattle area. I’ve had good luck with it the few times I’ve used it and keep it at the ready as my backup to the bus system.

      1. Something I found odd about Flywheel. If it’s a flat rate, why don’t they let you type your destination into the app, and get a rate quote before you agree to leave? In addition, your driver will already know your destination, which saves time and makes it easier for them to use the GPS.

        Sidecar does this, and it’s great. Uber and Lyft can’t really do it because your fare depends on the route the driver takes and how much traffic there is. Flywheel could do it, though, and I don’t get why they don’t.

      2. Because they work with cab companies in multiple cities and in other cities the cabs are metered. They’re just a dispatching and payments solution for existing licensed fleets. The flat rate is just an artifact of who they partnered with in Seattle.

  4. “Murky” is the charitable way to describe the TNC’s insurance policies. In reality, most of the TNC vehicles are operating with non-commercial insurance which excludes running a for hire service. This “innovation” that the Ubertatrians at STB keep yakking about is based on insurance fraud.

    Although it is not in current draft, the city council should require that the TNC vehicles carry commercial insurance. Because if the city does not make them, neither the TNC drivers nor the [ad hom] at Lyft/Uber/Sidecar will do it on their own. If you doubt that, look at how Uber is trying to dump the liabilities on its driver in the recent fatality accident in San Francisco on New Year’s eve. If Uber gets away with that, this would mean that the injured family gets nothing because it is likely that the UberX vehicle was uninsured.

    The claim that the TNCs would be limited to 100 drivers is wrong. The draft says 100 vehicles.

    1. Nobody is going to pay the kind of money that commercial insurance costs when they only intend on driving for Lyft a couple hours a week. Otherwise, they would spend more on insurance (which is priced on the assumption that they are driving people around 12 hours a day, every day) than what they get carrying passengers.

      A requirement for commercial insurance would effectively drive Lyft, etc. out of business.

      1. Working a “couple of hours a week” is just not a viable business plan. This is a public safety issue. the City Council can’t write their rules to accomodate a bunch of slackers.

      2. It’s absurd for the person defending the city council’s plan to cut the amount of for hire cars available in Seattle considerably doesn’t get to play the public safety card. If you’re in favor of keeping the number of cars for hire available well below demand, you’re objectively pro-drunk driving.

      3. “Working a “couple of hours a week” is just not a viable business plan.”

        Of course it isn’t. This is why there needs to be an insurance option that addresses this fact. And this is why the rideshare companies are working with insurance companies to come up with such an option.

        The fact is that the rideshares exist because of the group of slackers in the taxi industry. Yet you seem to want to deny the public a good service simply because these hard-working rideshare drivers aren’t willing to all work 12-hour days 5-to-7 days per week.

        If you want an issue, I would worry about the overworked taxi drivers staying on the road too many hours per week.

      4. @Cascadia, no, the insurance companies do not “need” to provide policies that cover TNC drivers that work a few hours a week. TNC drivers may want to get a cheap policy that allows them to switch back and forth between a taxi and private car but the insurance companies are not willing to take that risk. How would the insurer know whether the TNC vehicle was working 16 or 168 hours a week?

        Cascadia: “Yet you seem to want to deny the public a good service simply because these hard-working rideshare drivers aren’t willing to all work 12-hour days 5-to-7 days per week.”

        First of all someone who does not want to work enough hours to properly insure his vehicle does not sound all that “hard working”. There is nothing new about businesses that plead poverty to justify cutting corners. Welcome to the real world where businesses have responsibilities.

      5. “How would the insurer know whether the TNC vehicle was working 16 or 168 hours a week?”

        Easy. Rides and time logged in are all GPS-tracked. It’s tailor-made for creating a new GPS-tracked per-mile commercial insurance product. This could work equally well for delivery drivers too, who also need way better insurance options. People already willing to drive with a GPS tracker shouldn’t have the same privacy complaints that have torpedoed other efforts at per-mile insurance, so it should be a much easier sell.

        And to your claim that working a few hours per week isn’t hard-working, that’s just trolling. Most people doing this 5-10 hours per week are doing it to make ends meet on top of another full-time job. Many others are indeed doing it full time, and they should be buying full commercial policies already (but many aren’t).

      6. “@Cascadia, no, the insurance companies do not “need” to provide policies that cover TNC drivers that work a few hours a week.”

        They do need to — and they can, in actual fact, be required to. Be careful what you ask for. Unreasonable behavior by insurance companies leads to insurance regulation. Insurance companies can actually be forced to issue policies at terms set by the state government! No free market here.

    2. Yeah… as much as I think that ride-sharing provides some needed innovation in its sector, I think their insurance dealings in practice have been in bad faith. Yes, they need things from the insurance industry that it isn’t providing yet. But instead of negotiating coverage or providing it they’re charging ahead and leaving victims with nothing. They’re not alone in this — other posts in this thread point out similar abuses in food delivery. But until the insurance industry gets moving, these businesses have a responsibility to cover the difference. If they can’t do that they’re undercapitalized.

      1. Al, the Lyft/Sidecar/UberX business model was always based on insurance fraud. The “ridesharing” and “donation” doublespeak that Lyft originated was always just a way to skirt the insurance laws so that Lyft for hire vehicles would fit under the non-profit true rideshare category. They tried to build their whole enterprise on a loophole.

        It is more than just insurance fraud. The TNC drivers are operating under-the-table enterprises with no business licenses or workmen’s compensation. If the driver gets hurt in an on-the-job injury such as an at-fault accident then the tab just get dumped on the taxpayers or people with insurance.

        I know some UberX drivers that have commercial insurance. It costs them $4K a year which compares very favorably with a taxi which now ranges from $6,500 to $13,500 annually. So it can be done. The part time TNC driver who uses his own car is not a viable business model. So what?

    3. Nathaniel: “Insurance companies can actually be forced to issue policies at terms set by the state government! No free market here.”

      Sorry, this is not consumer health insurance. Auto insurance companies cannot be forced to cover you. They can cancel your policies. Nor does the state set rates for auto insurance. Furthermore specialized insurance markets, such as taxicabs, are not subject to the same regulation as consumer auto insurance.

  5. Lyft provides drivers with excess liability insurance up to $1,000,000 per occurrence. Every lyft driver on the road has that.

    Something that TNC’s has over traditional taxi’s is the lack of anonymity. They know who is in each and every car and where that car is. This provides a much safer experience for both the passenger and driver.

    As a woman that has encountered problems with taxi drivers in many cities (including Seattle) TNCs provide a service I am not comfortable living with out.

    1. The excess liability policy only kicks in when the driver hits the “fare accept” button on his smartphone and reverts back to the driver pushes the “drop off” button at the end of the ride. Ouside these digital events, the Lyft auto is uninsured which is one of the issues in the recent fatality accident in New Year’s eve. Uber has indicated that it won’t pay for the accident because “this tragedy did not involve a vehicle or provider doing a trip on the Uber system”. Although the driver says he was working, according to Uber’s definition, he wasn’t.

      A Lyft vehicle hit an elderly pedestrain in San Franvcisco a week later. Again the vehicle was likely unisured.

      1. The continued statements that these vehicles are likely uninsured is ridiculous. Personal vehicle insurance is a requirement when driving for a TNC. While the event that happened on NYE is a tragedy, the driver was at fault, and should and will be held accountable, for hitting a pedestrian. The same thing could have happened regardless of whether he was on the way to a ride or not. More importantly, the availability of TNC drivers on NYE and every other night gives drivers who are drinking a reasonable option home when in the past, at least in Seattle, there has been little options. They transport people who would otherwise be drinking and driving, and killing innocent people. It is fully possible that TNC drivers saved tens of lives on NYE alone this year.

      2. Jennifer: “Personal vehicle insurance is a requirement when driving for a TNC.”

        True, but personal insurance is invalid for a vehicle that is used for a TNC due to the business activities exclusion clause that is in every non-commercial policy. So the vehicle is uninsured.

        “While the event that happened on NYE is a tragedy, the driver was at fault, and should and will be held accountable, for hitting a pedestrian.”

        Actually you are advocating no accountability. Dumping a liability on a driver with no money and no insurance is just a way for Uber to stiff a family that has to bury their daughter and pay for medical bills.

        The city cannot allow uninsured TNCs on the street. It has to mandate that TNC vehicles carry commercial insurance. How the TNCs and their drivers pay for that is up to them. UbertX could just raise its rates from $1.63 a mile. The part timers might have to drop the idea that working a few hours a week is a viable business model. Welcome to the real world where businesses have responsibilities.

        “More importantly, the availability of TNC drivers on NYE and every other night gives drivers who are drinking a reasonable option home when in the past, at least in Seattle, there has been little options.”

        This is a very dubious proposition that there are few options. There are taxis, for hire vehicles and limos. And they actually have insurance if their ride gets in an accident with a drunk driver.

        .

      3. ClaimsAdjuster: there’s going to be a fight. If you pick someone up and drop them off, then after you finish dropping them off, you aren’t involved in business activities, you’re just cruising around. I’m sure the insurance companies will try to deny the claim (they try to deny everything), but if someone decides to take them to court seriously, the personal insurance policies will be forced to pay out. Assuming the car owners got the right policies.

        I’ve read personal car insurance policies. It’s easy enough to answer “Yes, this car is used for my business activities” and get no further questions. It doesn’t even increase your rate significantly over commuting rates, at least not in the states I’ve looked at.

    2. Nathanael,denial is just not a river in Egypt. This following is excerpted advisory from the California Insurance Commissioner to TNC drivers:

      “Most standard personal auto policies contain exclusions for livery – which essentially means driving for hire. A typical exclusion is set forth below (but your exclusion may be different – read your policy):
      We do not provide coverage … arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This exclusion does not apply to a share-the-expense car pool.”

  6. The fact is this city is facing a 17% cut to all Metro services next month, mostly late night routes. These services offer a reliable and safe way for people to get home after a night on the town. This city needs to be soon everything it can to increase public transp

      1. As long as you have the opportunity to look at the price and say “no” before you commit, I don’t see what the deal is. If it’s too expensive, you just don’t do it. An extreme situations, without prices that high, no one (except the extremely lucky) would get rides at all.

      2. Uber makes their surge pricing quite clear.

        I once paid $100 to take an Uber from Queen Anne to Ballard on New Year’s. I knew what I was getting into, and it was damned worth it, because the only alternative was walking.

      3. @asdf, I thought this was a transit blog. Price gouging is fine for a luxury service but don’t pretend that it is “public transportation”.

      4. @ClaimsAdjuster: This sure is a transit blog, but it weighs in on lots of peripheral issues. Transit touches on lots of other issues, and a lot of urbanism and environmental thinking these days centers around the idea that we have to make it easier to get around without a personal car. Ride-sharing and car-sharing services augment this — few people can afford to get around regularly by taxi, but a larger group of people might find that mostly getting around on transit with occasional taxi or ride-sharing trips where transit falls short is a great deal compared to car upkeep.

        Overall, they’re services that fill in the gap, so that we can build the city we want to live in without utterly disruptive change. Many authors have pointed out the tension between pedestrian/transit-centric environments and driving/parking-centric ones, and shown that mathematically it’s hard to have both in the same place, that there isn’t a comfortable middle (Joel Garreu makes this point while advocating for auto-centricity as lucidly as Jane Jacobs makes it while advocating for walkable urbanism). Ride sharing is part of the middle ground that makes it viable to build walkable places and live or work there without owning a car while other parts of town are auto-dominated and the transit system isn’t quite good enough.

  7. The legislation will limit each TNC (which are simply taxis for techies) to 100 drivers. The STB editorial board thinks that is terrible policy. But they didn’t explain the other side. They didn’t explain the thinking behind limiting each TNC to 100 drivers. Is the City Council doing it to anger transit bloggers? Is the number one hundred the Council’s lucky number? Or is there a logical reason why they want to limit it? Please explain their reasoning.

      1. Again you show that you don’t understand the issues here. Since the drivers are driving their own cars, then vehicles will equal drivers. Unless your only point is to prove that ride shares are not taxis, which they are not. We still haven’t answered why they (cars or drivers) should be limited to 100.

      2. @cascadia, there is no rule that says that more than one driver can’t work a TNC vehicle. If more intensive use of one vehicle is required for a TNC to actually pay for their insurance and meet their business responsibilities, then so be it.

        So who is it again that doesn’t understand the issues?

      3. I think TNCs have more than proven the popularity of the concept, and now it’s incumbent on them to use their vast capital and marketing war chests to convince insurers that this is a market worth taking on. And the ad hoc business model — drive when you want/need to — is really a beautiful thing, allowing extra capacity when it’s needed most without sinking costs into full-time fleets etc. The answer here is for council to require that TNCs step up with coverage anytime a driver is signed on but inactive, then TNCs need to negotiate with insurers to offer a per-mile premium at a commercial rate, and then get out of the way and let the markets work. That the current insurance regime is unacceptable is undisputed to anyone looking at this clearly, but that by no means should be a reason to kneecap a really successful concept. If a satisfactory answer can’t be found, then yes TNCs would need to either shut down or raise their prices sufficiently to make it worth it for drivers to buy traditional all-you-can-drive commercial insurance.

    1. One rationale for limiting cabs is to ensure that prices stay high enough for drivers to earn a living driving full time. If more supply actually causes prices to drop, they fear being put out of a job by part-timers. The envisioned Lyft part-timer is someone that already gets health insurance through another job, already has a car for personal use, and is utilizing their spare time and existing assets to earn supplemental income. The fear is that even if ride-sharing expansion grows the sector, that there will be fewer full-time living-wage jobs available in it.

      Whether this would actually happen in Seattle is a complicated question, but the cab drivers don’t want to find out empirically and they have the ear of the council. If the fears are unfounded, ride-sharing companies should probably find a way to prove this to the public instead of only talking about how good they are for consumers. (This is one thing that they could do to help their public image — the other is to take responsibility for fixing the “insurance gap” situation before states say, “Enough,” and implement requirements that will kill them. The reason they don’t do these things is that they’re from the Bay Area, where it’s literally illegal to understand someone else’s point of view.)

      There is a second rationale, and I have it on good authority (as a close personal friend of every member of the city council) that it’s essentially to anger transit bloggers.

      1. I would counter that argument by saying:

        1) The premium that drivers get as a result of a limited number of drivers doesn’t even really go to driver, but rather towards the rental of the license or the repayment of the loan to buy the license. If taxi driver’s didn’t have to get into a bidding war for licenses, they probably could charge Lyft prices and still make a living.

        2) Even if you can’t make a living by driving people around full-time, I don’t think that’s really so bad. For every full-time driver who has to switch to part time and find another job, there will be someone else who has only a part-time job for which Lyft driving will fill in the gap and allow that person to make enough money overall to pay the rent. In the end, things balance out.

      2. #1 is a fine counterargument, shout it from the rooftops if you have a solid analysis showing that cab scarcity doesn’t actually benefit drivers.

        As for #2… good luck. A decrease in the number of steady, living-wage jobs is going to be hard to sell. Part of the problem is that health insurance is bundled so closely to employment. But job security itself is highly desirable among most people and has real tangible benefits (ask anyone that’s cash-rich and time-poor why they keep working for the man instead of freelancing), not least is the increased ability to plan ahead in your life. Groups like unions that promote job security for their members use rhetoric emphasizing job security for society, and they have a big megaphone. Maybe you want to get into a war of words about this, maybe not. But just as many poor people support policies that will help them when they get rich (as they aspire to do) instead of ones that will help them now, many part-time workers support policies that will help them when they get a full-time job (as they aspire to do) instead of ones that will help them as part-timers.

      3. The existence of taxi medallions that sell for six figures is the proof of #1. The steady stream of money that owning a medallion and renting out the right to individual taxi drivers (who I don’t doubt make a working wage)

        Put another way, the taxi drivers are treated like replaceable cogs by medallion owners the same way a McDonald’s worker is, and thus not paid well. The taxi medallion owner can reliably mint considerable money. We know this b/c the medallion to operate a taxi sells for so much money. Lower consumer prices, better service AND better jobs for drivers are available to our city by removing this constraint.

      4. Additional counter-arguments

        #3: Even if limiting the number of taxi drivers allows each driver to earn more money, by definition, fewer drivers will get the benefit. In the aggregate, provides no net benefit. By the same logic, we should limit the number of licenses of pizza delivery drivers so that the license holders can have leverage to bargain with the pizza company for higher wages.

        #4: If push comes to shove, why should the interests of taxi drivers trump the interests of the rest of the public?

      5. Al: “The fear is that even if ride-sharing expansion grows the sector, that there will be fewer full-time living-wage jobs available in it. Whether this would actually happen in Seattle is a complicated question, but the cab drivers don’t want to find out empirically…”

        Actually the empirical evidence is already there from Seattle’s disastrous deregulation of the taxi industry from 1979 to 1987. The results are summarized in the hyperlinked report as:

        1. A significant increase in new entry;
        2. A decline in operational efficiency and productivity;
        3. An increase in highway congestion, energy consumption and environmental
        Pollution;
        4. An increase in rates;
        5. A decline in driver income;
        6. A deterioration in service; and
        7. Little or no improvement in administrative costs.

        In the past few years, the Seattle area has implemented defacto deregulation. The city issued 200 For Hire Vehicle licenses over the past five years. King County still issues this licenses. The FHVs are two tone taxi lookalikes that are flat rate instead of metered. The second biggest cab fleet in King County is Eastside For Hire which just started as a company five years ago.

        Now on top of that are the TNCs. Taxi drivers are not making it up that they are losing business.

      6. Ohhh, “ClaimsAdjuster”, you’re a bought-and-paid-for shill for the incumbent medallion owners. Got it.

        The deregulation of cabs in Seattle from ’79-’87 was, by all accounts *except yours* a hell of a lot better than the “artificually restricted supply” conditions now. Partisan, biased, lobbying nonsense from the taxi lobby is not a reasonable citation.

      7. Nathanael: “Partisan, biased, lobbying nonsense from the taxi lobby is not a reasonable citation.”

        The hyperlinked report was written by Craig Leisy, who works for the City of Seattle in licensing and consumer affairs.

        Nathanael: “The deregulation of cabs in Seattle from ’79-’87 was, by all accounts *except yours* a hell of a lot better than the “artificually restricted supply” conditions now.”

        And what account would that be? Uninformed libertarian bloviating is not an actual study.

        “… you’re a bought-and-paid-for shill for the incumbent medallion owners. Got it.”

        I get the STB [ad hominem] edit for calling Uber “sleazeballs” for putting uninsured cabs on the streets but you get to call me a “bought-and-paid-for-shill”. I think you should be able to say it but clearly the Ubertarian STB has biased moderation standards.

        No, I do not work for medallion owners. I don’t support these licenses being treated as intangible assets. But capping the number of taxis so that the cab owners can make enough money to meet their responsibilities in areas such as insurance, safety, equipment is necessary. The TNCs and their drivers are certainly not doing that. They are cutting corners.

    2. Zach, the TNCs have already said that they don’t want to provide coverage when a driver is logged on but “inactive”. They stated that some drivers would stay logged in all the time just to gain insurance coverage.

      It is still not feasible. If an insurance comapny finds out that you are driving a vehicle for a business at all then they will deny claims and cancel your policy based on the commercial exclusions clause. Insurance companies love exclusions.

      1. What exclusion? Where I live, which is admittedly a different state, “yes, I drive this car for my business” is a standard option on standard personal insurance policies. Doesn’t cost significantly more than using the car for commuting, either. I suspect this has something to do with the fact that cars being driven for business usually have better records than commuters…

      2. Now, there’s an exclusion for *use as a limousine or taxi*, but that only applies *during use as a limousine or taxi*, which is exactly what the car-sharing operations DO insure.

        Maybe the insurance structure is different in Washington State. Car insurance is wildly different from one state to another. The car-sharing operations set up their insurance schemes based on the state they started in, and maybe it simply doesn’t translate across state borders.

      3. Nathanael: “Now, there’s an exclusion for *use as a limousine or taxi*, but that only applies *during use as a limousine or taxi*, which is exactly what the car-sharing operations DO insure.”

        If you are on the street, looged onto the system and available for electronic hail, you are using the vehicle as a limousine or taxi, whether you have a passenger or not . The TNC insurance does not cover that as was seen in the San Francisco fatality accident.

        A TNC has a greater risk than a private automobile because it is on the street for extended periods – not just because of passengers.

        According to the advisory from the California Insurance Commissioner to TNC drivers:
        “Most standard personal auto policies contain exclusions for livery – which essentially means driving for hire. A typical exclusion is set forth below (but your exclusion may be different – read your policy):

        We do not provide coverage … arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This exclusion does not apply to a share-the-expense car pool.”

    3. The City Council wants to make sure that there is an insufficient supply of taxis so that the incumbent taxi services, who are lobbying and bribing the City Council, can remain incompetent, dangerous, irresponsible, and overpriced.

      Simple answers to simple questions, Sam.

      1. @nathanael, being from out of state, you have real insight into the motives of the Seattle City Council.

        ” incumbent taxi services … dangerous…”

        So who was it that ran over the family in San Fransisco on New Year’s eve?

        “… irresponsible”

        And who was it that said that they weren’t responsible to pay for that accident? And who was it that allowed an uninsured cab to use their platform? And whose drivers are attempting to hide their business activity from their insurer?

        “overpriced…”

        Who was it that charged $415 to Jessica Seinfeld to go a few miles during a snow storm?

  8. One interesting dilemma that hasn’t received much attention is the problem of coverage of taxi-like services in out-of-the-way areas.

    For example, a quick check of the rideshare apps around Bellevue, Redmond, and Kirkland at 5:30 on a Wednesday afternoon reveals one driver with Lyft (near Crossroads Mall), zero drivers with sidecar, and two drivers with Uber (in downtown Bellevue). Again, this is 5:30 on a weekday afternoon. Later in the evening, or on a weekend, you are most likely to depend on a driver to deadhead all the way from Seattle to pick you up. Even if you can find a driver who is willing to do this, which at current prices is not a given (would you be willing to do 16 miles of deadheading in your car to drive a passenger 3 miles for $7? I wouldn’t.), the time required for the driver to get to you means the big advantage over a conventional cab (improved response times) is often wiped out.

    I believe the current regulation of taxicabs requires that they pick everyone up and that the closest driver to the pickup location has to answer the call, even if the closest driver is in downtown Bellevue and the pickup location is in Sammamish. Since all trips cost the same, this is effectively an arrangement where people traveling in high-demand areas are asked to pay more to subsidize people traveling in low-demand areas.

    This model doesn’t work very well for services like Lyft, and rules like this would probably drive up prices for everyone significantly. Conventional taxis still exist, although some question whether they will continue to exist in the long run if their most profitable trips are undercut by competitors.

    Not sure what the right solution is, but my gut feeling is that simply letting Lyft, Sidecar, Uber, etc. continue to operate side-by-side with taxis is sufficient. Given the population of out-of-town tourists who have never heard of Lyft and Uber, combined with people that don’t have smartphones, I don’t think conventional taxis are going to be driven out of business any time soon.

    1. The rideshares are driving around a certain demographic passenger — under 35, relatively tech-savvy, and looking to live in a 21st century manner.

      The traditional taxi companies have utterly failed this group of people. Yes, this is potentially taking business from taxis, but only because the current business plan in the cab industry is to make potential passengers wait until the drivers are ready to pick them up. These people are thrilled that someone is stepping up to service them timely.

      There are so many other people out there that still depend upon the limited amount of full taxicabs that are out there. I doubt that the taxicabs will be disappearing anytime soon. Unless it is through the self-inflicted would of failing to properly serve their passengers properly.

      I believe that it is good public policy to offer these rideshare services. The insurance issues will work themselves out soon enough. Rideshares are new and will evolve with time to provide even better services.

      Sometimes I feel embarrassed to admit that I am a taxi driver in Seattle.

      1. “only because the current business plan in the cab industry is to make potential passengers wait until the drivers are ready to pick them up. ”

        This is the problem, isn’t it? This isn’t the business model of taxis operating in most places.

  9. Notably, on the “insurance gap” issue, Seattle proposes to require TNCs’ insurance to cover drivers whenever a vehicle is “active” on the system. “This includes times when the driver is waiting for a call, but has not yet been dispatched.” Which seems reasonable.

    1. Actually the council’s draft does not define what “active” means. We know how the TNCs define it, the insurance is on when the driver hits the “accept fare” button on his smart phone and it reverts back to the driver’s policy when he pushes the “drop off” button. Leaving it vague like this this not going to cover this gap because the [ad hom] at Uber/Lyft/Sidecar have shown that they will take advantage of any loophole that they can find to try to dump the liabilities all on the driver.

  10. “Must have an “umbrella” $1 million policy …” Who must get the umbrella policy? The company or the individual driver?

    In any case, this is good, because did anyone read this story about Uber being sued for the death of a 6 year old girl? In the article, I like this particular statement: “Dolan said Monday that while Uber shares in the profits of its drivers, it must also share in the responsibility for the harms they cause.”

    http://seattletimes.com/html/nationworld/2022767858_apxridesharingcompanylawsuit.html

    1. Or, more to the point, I am a taxicab driver and ride shares are competition. However, I think we can have a good discussion of the issues without resorting to name calling.

      1. [epithet] is the common name for an uninsured and illegal for hire service. How are your “rideshares” different?

      2. We all know that the ride shares are either illegal or not currently regulated, depending upon your side on this. I believe we are trying to discuss “what if they were legal”. I happen to believe that they could eventually be a good addition to our public transportation choices, once the bugs are worked out. I think the idea has merit.

      3. Adjuster: so, if the council allows ride shares and somehow the insurance situation can be worked out, then TNCs are good to go?

  11. I essentially see these companies as a market solution addressing the total failure of government to provide adequate public transportation, alternate commuting options, and adequate taxi service. I currently am living in SF and it’s precisely these services that allow me to live a car-free lifestyle. It’s easy and always available to get a car to take me across town for $8-10. Taxis on the other hand are hard to find, poor service (drivers who drive like bats out of hell in dirty old cars), and forget about trying to call and book one at short notice without a significant wait. SF also has very poor public transit options for in-city travel, unless you’re staying in one of the limited parts of the city served by BART.

    It would be a shame to see these over-regulated away in Seattle, a city facing many of the same issues as San Francisco (the lack of reliable, fast in-city transit, taxis with poor availability and poor service). These provide an important public service that allows people to reduce or eliminate their reliance on private automobiles. I’ve also talked to several of the drivers. Many of them work part-time after work or school. They love the job, the money they earn, and getting to know the passengers in their city.

  12. There are two problesm with the article. First, “TNC” is a foolish term stupidly applied by the State of California. There is no reason whatsoever that other states, or the public in general, should start using this incorrect and misleading term, which is almost as bad as “ridesharing” (the term “TNC” was meant to replace). What you are talking about are taxis. Whether and how they are or should be regulated or licensed is a secondary issue; to have any clarity on the subject we need to start with the recognition that Lyft, Uber, etc are taxi companies.

    Second, this is a pretty counterintuitive argument to take on the issue. Of course taxis can reduce automobile usage and an expansion of taxi fleets could play a role in reducing the number of private vehicles on the road. However, if there is a flood of taxis onto the streets, there can also be an increase in traffic and congestion from taxis driving around empty competing for business. This is one of the main reasons taxis numbers are limited in most cities.

    So the problem with the “TNC” model is that it throws out the baby with the bathwater. You can increase the number of taxis, but some kind of limitation on the number of vehicles (as well as enforced vehicle and driver standards) needs to be maintained, or you will end up with the opposite of the effect you are hoping for.

    1. Taxi numbers are unlimited in most cities, actually.

      They’re limited in most big, dense cities. But go to a small city and you’ll find the city trying to pay companies to get more taxis.

      1. And no, you never need to limit the total number of taxis. What you need to do is limit the number which are allowed to be “cruising aimlessly”, or the number which are allowed to be queuing in any one place.

        Having the city control dispatching would probably solve the problems, actually; I don’t know if anyone’s tried this.

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