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.
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.