back to article Seattle pops a cap in Uber and Lyft: Rideshare bizs get 150-driver limit

Seattle city council has agreed to put in place a controversial cap on Uber, Lyft and other informal taxi booking services. On Monday the authority voted to rubber-stamp a measure that caps each unlicensed cab service to 150 drivers on the road at any one time – normally the companies organize hundreds at a time. For the …

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  1. MondoMan
    Pint

    Final Seattle vote was unanimous

    http://blogs.seattletimes.com/today/2014/03/seattle-city-council-approves-lyft-uberx-and-sidecar-driver-caps/

    1. diodesign (Written by Reg staff) Silver badge

      Re: Final Seattle vote was unanimous

      Edit: We got an earlier non-binding sub-committee meeting mixed up with the binding full city council meeting, although the overall gist of the story is correct (thankfully). Hopefully now the article is accurate - thanks and my apologies.

      PS: Please, email corrections@thereg next time you spot something wrong. I may not see your complaint in the comments.

      C.

      1. MondoMan

        Re: Final Seattle vote was unanimous

        Thx for the fixes!

  2. Nate Amsden Silver badge

    seems reasonable

    I have read some things that indicate the folks that run Uber are pretty shady.....

    Having lived in the Seattle area for 10 years (moved back to California almost 3 years ago), I don't recall noticing that many taxis outside of the airport at least. I did use taxi services probably 4-6 times in the time I was there(every time was to/from airport).

    So I was curious how many there are, and looked it up, found a report on Komo news (local news station there) that says there are 700 taxis in the Seattle and surrounding county (included the city where I used to live), with plans to increase that to 900 over the next two years.

    So 150 per company doesn't seem bad at all, with a quick search I see at least a half dozen what seem like taxi or taxi like services. Granting these new players 150 cars a piece seems very reasonable.

    Uber's tactics just seem poor, so I for one won't be using them(never have used them).

    I suppose it shouldn't surprise me that Uber is based out of SFO, a city I personally hate and avoid at pretty much all costs even though I live only 20mins away from it. I'd rather drive 40 minutes to SJC to do something if it means avoiding anything SFO related(I haven't had to resort to doing that yet).

    Seattle is almost as bad as the hipsters there try to copy SFO, so I avoid a good 90% of Seattle as well. I like the "east side"(as it's called) of Lake Washington though.

    1. Flocke Kroes Silver badge

      seems unreasonable

      150 full time taxi drivers per company in a city might make sense, but it is beyond silly when you are looking at divers who have a separate day job and just happen to be going the right way at the right time.

      Try to understand https://en.wikipedia.org/wiki/Regulatory_capture

      Imagine what this law will do. Lyft and the others will license their software to dozens of micro companies each with 149 vehicles. These companies will insist drivers do not use any other ride sharing app.

      http://www.flickr.com/photos/wfryer/3929189482/

      1. ClaimsAdjuster

        Re: seems unreasonable

        Where did you get the idea that these Lyft etc drivers "just happen to be going the right way at the right time"? These are cab drivers who work 8 to 10 hour shifts on the weekend. Most of them congregate in the downtown club area Friday and Saturday night. They get their fares from proximity to the customer's smart phone.

        The Seattle ordinance prohibits the kind of multi-company scam that you pose. Other players have come into the market, such as Flywheel which dispatches only to licensed and insure For Hire vehicles.

  3. David Kelly 2

    The same-old same-old

    Restrictions on Uber and Lyft are no different than allowing unions to control who is allowed to practice trades. No different than New Jersey preventing Tesla from selling direct.

    Yes, it is just terrible that hotels have to collect taxes that informal B&B's do not. The problem is not that the B&B doesn't collect taxes but that the hotel does. Its the same with b&m stores vs Amazon with sales tax. The problem is not that Amazon does not collect sales tax but that the local brick & mortar stores are handicapped with the obligation.

    1. Anonymous Coward
      Thumb Up

      Re: The same-old same-old

      My sole purpose for logging in after reading this article was to make a comment about the unions along with the striking resemblance of this case to that of "New Jersey versus Tesla" but I guess that's been settled already.

      Having said that however I do feel that I need to make a further mention that unions are nothing but a complete waste of oxygen. Their only purpose seem to be... well... how should I put this...

      What's that old American saying again? "How many workers does it take to change a street light (bulb)?"

    2. Ian Michael Gumby Silver badge

      @ Dave ..Re: The same-old same-old

      No, this is not exactly a protectionist thing.

      1:tax revenue, for one. Uber and company don't pay taxes like taxis.

      2: safety.

      Uber and company do not carry the proper insurance that professionals (limo, taxi, etc) must carry. Drivers may/may not have commercial license. Cars aren't inspected.

      That's a big thing.

      A driver hit pedestrians in a sidewalk. He wasn't paying attention and was instead looking at app to find his next fare. Uber... No coverage because there was no fare in car at the time of accident. His insurance? No coverage because he was moonlighting as a gypsy cab. Read commercial use voids non-commercial insurance. Who loses? Pedestrians who did nothing wrong, driver for being a dumb Schmuck for trying to make a quick buck.

      Not to mention that uber's insurance probably won't pay out because it only pays after driver's insurance pays. Driver's insurance doesn't pay, then Uber is off the hook.

      3: No recourse for passenger if something goes wrong. I'll leave it up to your imagination...

      And to top it off... Not really a disruptive innovation.

      Radio car service... Oh I press a button on a phone instead of dialing?

      And I used the term Gypsy Cab? Been around for years.

      Taxes?

      It's what pays for the services you take for granted. Think of the infrastructure projects that could be done if the trillion dollars hid offshore (legally) if apple and company paid their taxes that they would owe on the profits they made over the years.

      1. FutureShock999

        Re: @ Dave ..The same-old same-old

        A very adult comment...which shows the entire debate very well.

        The real threat to Uber is one of the last use cases you mentioned - no real passenger protection. Nearly anyone can become an Uber driver, and accept fares - very little background checking, just have a license. And with such a large pool of drivers they don't actually personally know any of them...unlike most taxi companies, where they at least come into the garage to pick up their cabs.

        I know Uber has a driver rating system, but that really won't stop a true psycho from getting a job for a short bit, doing a few good fares, and then doing something unsociable. That has always been the issue with gypsy cabs, and using Uber isn't much safer than taking a ride from any of the transient cabbies that hang around the Arrivals exit at JFK. You are getting in a mobile, lockable metal box with a stranger - that really was the whole idea behind licensing taxis and drivers in the first place.

        This is predictable, and it will happen. I just hope that the victim(s) are OK and that we learn from it when it does happen.

        1. Ian Michael Gumby Silver badge

          @Future... Re: @ Dave ..The same-old same-old

          I'm a bit older than the average reader... ;-)

          It isn't just the driver rating system. I mean there are checks on regular cabbies and many on further inspection some of them should never be driving.

          The strongest argument against Uber is the insurance and liability.

          That accident did happen and while we haven't seen the end of it, I'll wager the driver is going to end up filing for bankruptcy because he couldn't afford to pay the family's medical bills. They will most likely sue Uber and win or get Uber to settle quietly, putting a gag order on the family.

          Since Uber is still private, they wouldn't have to disclose how much they paid to settle lawsuits arising from accidents, or even report the number of accidents.

        2. ChaosFreak

          Re: @ Dave ..The same-old same-old

          UMMM... what's to stop your "true psycho" from getting a job as a cab driver and doing the same thing? After all, he's a "true psycho", and I wouldn't put anything past a "true psycho".

      2. ChaosFreak

        Re: @ Dave ..The same-old same-old

        And, restricting the number of Uber drivers to 150 will solve these four issues.... how exactly?

        If these four issues are that important, address them directly.

        Pass an ordinance requiring Uber et. al to pay taxes/licenses on par with taxis, have the same safety requirements as taxis, same customer complaint process as taxis and same insurance requirements as taxis.

        I can understand leveling the playing field and letting the market sort it out, but simply restricting how much business they can do is ludicrous. It's obvious that this is just a protectionist measure to make the cab companies happy, and it's not about the four issues you mentioned.

  4. Mark 85 Silver badge

    Just another case of follow the money..

    At least once someone buys a Seattle politician, they stay bought.

    If the business dealings of these two companies are shady, wouldn't that have come out as an argument against them...?? Or is this just a competition that the cab companies don't want?? I tend to think the latter.

  5. DF118

    Shocking!

    "The question I have for the hotels is this: are you also OK with AirBnB operating in Seattle and providing the same service as hotels but without paying hotel taxes and fees? ... Are the restaurants OK if the City Council goes back and amends the food truck regulations to lift the restrictions we placed on how far food trucks can operate from existing restaurants? Are the tech companies OK if we allow companies to come in and pirate their software as long as the pirated products are popular and consumers enjoy it?"

    Well, the last one's a bit disingenuous and doesn't really fit with the first two, and the first two are just examples of a free market. I'm shocked, shocked to find that anyone in the good old USA would agree to anything that restricts the operation of a free market.

    1. Ian Michael Gumby Silver badge

      Re: Shocking!

      Actually change the third to be steal their IP not pirate.

      So a company writes an app to do X, and Company B copies the app and sells it for a fraction of the price.

      1. Tom 7 Silver badge

        Re: Shocking!

        Its not stealing IP - its a bit of a no-brainer of an idea that has been mooted, and probably implemented, many times before. During the fuel crisis car sharing at my dads uni was organised on a paper map and pins with details attached.

        Like to see it implemented a bit more - wouldn't need to piss £50Bllion on HS2 so 10% of central London can get somewhere a bit quicker.

        1. frank ly Silver badge

          Re: Shocking! and stealing/pirating

          The analogy has a built in assumption that I (as someone looking to get from A to B) am the property of a particular group of taxi drivers and that my money rightfully should be used to buy the services of particular taxi drivers. That is an attitude I strongly disgaree with.

          1. Anonymous Coward
            Anonymous Coward

            Re: Shocking! and stealing/pirating

            Not at all, you are free to use the app.

            but then you also would expect the police, courts and all to get involved when Mr app user driver turns out to be Fred West or Peter Sutcliffe.

            There's so many stories in the Uk of taxi drivers taking lone girls to have "fun" with some mates who turn out to be unlicensed mini cabs operating illegally (picking up fares in the street, UK mini cabs must be pre-booked)

            http://www.bbc.co.uk/news/uk-england-manchester-26381847

          2. Ian Michael Gumby Silver badge

            @frank-lee Re: Shocking! and stealing/pirating

            No,

            The analogy doesn't suggest that at all.

            You want to get from point A to point B you have a set of options:

            1) Walk

            2) Ride a bike

            3) Get a friend to drive

            4) Public transportation

            5) Taxi

            6) Hired Car Service / Limo

            7) Fractional rental cars (aka Zip Cars)

            8) Rental cars (Hertz, Avis, etc ...)

            9) Lease

            10) Own a car

            You are free to choose your mode of transportation.

            You choose to take the taxi, you're not their property. They however, have a legal obligation to get you from point A to point B in a safe and lawful manner for which they collect a fare.

            They are providing you a service. Not sure how you feel that you're a slave.

    2. cracked

      Re: Shocking!

      I was looking at AirBnB the other day. Someone near to us has started offering an ensuite room. They offer the same room through a number of proper travel/booking sites. From (limited) research - The price is always the same.

      The difference between any of these sharing economy start-ups and regular-businesses in the same industry, is the same difference between starting a standalone gardening business, or paying to run as the local Jim's Gardening franchise.

      Like bitcoin; a few horror stories down the road and world+ will be demanding regulation, and so taxes. And then that will be the end of all the money Yahoo spent on acquiring the start-up, the previous year.

      I too am shocked to see an American ... with open eyes ;-)

  6. Caff

    hailo

    There appears to be quite a contrast between uber and other companies like Hailo who actually engage with the existing taxi industry.

    1. ChaosFreak

      Re: hailo

      Uber engages with the taxi industry. You can order a taxi on Uber's app and pay for it through your Uber account. It's cheaper than a "black car" and you get confirmation on when your taxi will arrive.

  7. stu 4

    @Ian Michael Gumby

    1. how does a 150 limit solve the tax issue ?

    it doesn't

    2.how does a 150 limit solve the safety issue ?

    it doesn't.

    3. how does a 150 limit solve the 'customer recourse' issue ?

    it doesn't

    Sorry, but it IS protectionism pure and simple.

    IF they had issues with your 3 (very valid) points, they could have put proposals forward to solve them., They did not.

    This is absolutely a case of union/group lobbying exactly like the NJ tesla case.

    1. MondoMan

      Re: @stu4

      The new law will require that Lyft/etc drivers be specially licensed and their cars inspected by the city, that the organizing company carry liability insurance that covers them while on duty. That should hopefully cover the tax/safety issues.

      Customer recourse is notoriously poor even with the current Seattle taxi companies. The City Council has promised to improve current regulation of for-hire rides. We'll see what happens.

    2. Ian Michael Gumby Silver badge

      @ Stu Re: @Ian Michael Gumby

      That wasn't the point of my comment.

      The truth is that 150 doesn't do anything but try and find a compromise.

      I dont agree with their position, because I believer the number should be 0.

      As I stated in my post. Uber doesn't carry the right type of insurance, nor do their drivers.

      By law, you must be insured in order to drive a car. I believe this liability insurance is required in all 50 states. (It is in IL. Uninsured drivers get arrested.)

      But the personal insurance is not the same as commercial insurance.

      Ask yourself why cities limit the number of tokens/ medallions in a city to taxi services.

      And then there are car livery services...

  8. Tikimon Silver badge

    Pure protectionism, folks

    "The question I have for the hotels is this: are you also OK with..." COMPETITION?

    No, none of the existing business models want competition. They want to have their income stream nice and safe without pesky upstarts stealing their business and forcing their prices down. It's what they buy politicians for. Any mouthings about insurance and taxes are just "think of the children!" distraction. The cab companies want the disruptive startup crushed.

    Here in Georgia, we only recently struck down laws against ordering wine online. That was some local protectionism for the alcohol distributors, took years to get rid of. They're all the same.

    1. pepper

      Re: Pure protectionism, folks

      What really? Surely if you are a wine distributor it would be advantageous to be able to distribute online?

  9. Anonymous Coward
    Anonymous Coward

    Never quite so black and white

    Uber and Lyft were started in the Bay Area to address problems faced by wealthy tech workers - the taxis in that area are notoriously bad and unreliable. There are many bad things in the US with the existing taxi system and some equally bad things about these disruptive services.

    In most cities in the US, taxis are used almost entirely by poor people who cannot afford cars or by people who have lost their driving licenses due to old age, DUI, etc. A small part of the business is taking business people to and from the the airport, but the cabs and their drivers are driven by the first and the level of their service reflects the "no other choice" ethos. A compounding issue is that in most cases the driver will never see the airport traveller again so there's no incentive for good service, clean cab, etc.

    In cities where people may not have cars (NYC) and use "car service" there is another layer of offerings altogether with clean, professional, reliable, more expensive offerings. Uber is trying to bring this latter service in line with standard taxi offerings (which are mostly dire) and Lyft and co are trying to improve the taxi experience by letting amateurs moonlight in the area.

    Of course, the issue is that (as stated above) neither Uber, Lyft, or co have been completely honest about insurance coverage and licensing requirements and have tried to circumvent and ignore licensing requirements while leaving customers and drivers to bear the burden. The absurd libertarian talking points spouted above illustrate how this has become emblematic - but seriously, unions? Do you think taxi drivers are unionized anywhere in the US?

    The taxi business needs a shake up in the US (especially as more and more people forego private cars in the larger cities) and maybe these companies can start that process but this extreme attitude on both sides misses most of the real challenges and potential benefits

    1. weathertop

      Re: Never quite so black and white

      Indeed, and the solution is not some app-driven company who is looking at circumventing the regs and placing drivers and riders in uncomfortable, dangerous, and/or expensive situations of testing the waters.

      Protip for start-ups: Make sure you have the legal right to engage in your business before engaging in business. An app to immediately higher an armed security guard (read as some dude with a gun moonlighting as armed security) might fill a void in the market, but is it legal? Smart?

      1. NullReference Exception

        Re: Never quite so black and white

        If Uber/Lyft had asked for legal clearance first, the answer would have been "Heck no" and they wouldn't have a business. By not asking, they got to fly under the radar for a while and build up a customer base (which becomes an asset during the inevitable regulatory fights - the customers want the company to stay around, and they vote.) It's ALWAYS easier to beg forgiveness than to ask permission.

    2. Ian Michael Gumby Silver badge

      Re: Never quite so black and white

      No wonder you post anon.

      You make sweeping generalizations.

      Poor people don't take cabs. they take public transportation.

    3. cracked

      Re: Never quite so black and white

      I agree that many services offered to the public - the world over - could be improved. But I don't believe - for one second - this is the purpose of the myriad start-ups bring the sharing economy to just about every corner of the business world.

      Take the Fast Food Delivery lot, based out of London, I believe? (The domain name escapes me)

      Does this business intend to increase the amount of fast food sold?

      If it does not - and it does not - then what is its game?

      Its game is to be sold, to a big-player dot-com - And it has hopes to have everything a big-player wants: Income stream, customer-data and signed-up suppliers.

      It's USP appears to be that it is allowing "small local businesses to compete with the big boys". But many of those big boys are franchised; meaning many are a small local businessman operating as part of a buying group .

      And anyway, at the point the start-up has a high percentage of "locally run take-away restaurants" signed up ... you can bet Pizza Hut is finally allowed in.

      And, so - in the end - the start-up added nothing to the fast food industry; it merely took 10% of its revenue.

      There are approximately zero normal-people who happen to be driving in the general direction you are headed and are prepared to pick you up, when you requested a share on Uber. There are a lot of people who have a car and need a second (or third) job; Uber "supports" those people. There is no "sharing" just a new booking system for an increased number of taxi-drivers (but, almost certainly, the same number of passengers).

  10. stu 4

    @an

    " but seriously, unions? Do you think taxi drivers are unionized anywhere in the US?"

    er.. yes

    http://www.taxi-library.org/history.htm

    https://nytwa.org/

    wtf made you possibly think they weren't ??

    1. ClaimsAdjuster

      Re: @an

      Taxi drivers in the US can't belong to a union because they are independent contractors. They are not employees. They do not get a pay check or any benefits. They cab make less than minimum wage. They cannot strike. According to the National Labor Relations Act, they cannot collectively bargain.

  11. Steve Gill

    I'm shocked

    Shocked that any city would think that permitting what are effectively unregistered taxi drivers to operate in their jurisdiction would be a good idea.

  12. Wanderingone56ish

    Consider this

    Of all the examples quoted by the Seattle councilman (taxis, restaurants, etc.), which have to pay money to Seattle city council and which don't.

    That and that alone is the basis for their decision.

  13. weathertop

    Not an easy discussion

    There are valid points for and against services like Uber and Lyft. In the Pro camp, Taxi services just don't cut it. In urban areas, you can wait hours for a taxi, that then costs an arm, leg, and your first born just to go a few miles, and there are problems with the drivers themselves (language issues, driving safety, vehicle safety, rudeness, smell and cleanliness, etc.). In the urban/suburban/rural interface areas, on the edge of town, you're lucky if you can get a cab at all. Mass transit in these areas especially sucks. An increase in competition certainly can do nothing but help address some of these deficiencies.

    In the Con camp, there are serious legal considerations. Insurance, for one. Sure, both companies boast robust insurance, but it is still after all a private vehicle. Drivers are placing themselves at risk financially if they do not have commercial insurance on their own, plus a liability umbrella. There is also the lack of inspections, plus the same driver issues taxis face. Not to mention the massive legal gray area... they provide a public service (which is licensed and regulated in most areas), but operate on a false-share-economy principle. Then, finally, there is the issue of ADA requirements. Since it's a private vehicle, on one hand they can refuse service to someone traveling, say, with a service animal (unlike taxis, which cannot legally, but do... well, cabbies do, or they grumble and complain the entire time), but they are also offering a public service which could thrust them into that requirement without ever knowing it, causing the Service Provider and Driver into a lengthy court battle about the scope of the ADA requirements.

    My overall point though is Lyft and Uber have the right idea, but terrible execution, one that places the risk on people who may not realize they're taking risks.

    On a side note, though, I think most start-ups need to be drown in a bathtub. Too many of them seem to be centered around "Let's make an app that will do X! We can make money when user does Y! Lawyers? Are we operating legally? Laws? Bah! Who needs those things, we're on THE INTERNET!" Too many one-app companies out there trying to make a quick buck. It's like looking at a gold rush, watching all the miners head into the hills, and the only one's with fat pockets and any sense are the suppliers (in this case, app-stores and CC Clearinghouses).

  14. Richard 15

    The result of a limit of 150 will be higher prices charged to the consumers since

    the intent, if not effect, is to limit it to 150 active drivers at a time.

    Now, ironically, it may eventually lead to lower prices as the drivers bid for the right

    to get the passenger. I imagine when it rains badly that it will still go up regardless.

    I think that it would be reasonable for anyone who wishes to participate in the programs

    have some kind of background check and insurance such that they are covered at all

    times.

    The city councilman's examples all have to deal with money.

    Money flowing into the city's coffers and insuring that those businesses paying it get

    protected to ensure the money continues to flow unabated.

    The last example of piracy is pure garbage though since the other example have to do

    with legal services, just not as profitable to the city, while piracy is straight out theft.

    He should be ashamed, but as a politician I don't expect him to actually experience that

    emotion.

  15. heenow

    There Is A Document To Consider

    Thank God the U.S. of A. has a constitution that prohibits these actions.

    Carry on good folks! The local commies are just grasping at straws.

  16. seraphim
    WTF?

    What's it supposed to accomplish?

    I've got a friend who drives for Lyft here in Denver, and have used it myself. The ride is worlds better than taking a grimy taxi, for a comparable or in some cases actually lower price. Every driver I've had a ride with has been polite and pleasant, in comparison to many taxi drivers from whom about the best you can expect is stony silence. You also don't get charged extra for luggage or additional passengers. The legislature has just passed specific laws that work with Lyft and Uber. (I've never used Uber, so can't say much there one way or the other.)

    Apparently they do in fact do a vehicle inspection, DMV record check, and ride with the driver before allowing them to begin driving. From what my friend has said, they take that quite seriously. I sure would in their place--they absolutely can't afford a black eye from a major incident.

    I'm no one's libertarian by any means. I'm all for reasonable regulation on any of these, like the ones we passed here. I'm generally pro-union, too. But I'm not pro-monopoly, because that ultimately hurts us. If a lot of people would rather take Lyft or Uber than a taxi, it's probably time for the taxi companies to start reevaluating how they do business and figuring out how they can make their customers happier too. It's not time for them to have competition outlawed.

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