Nearly a year ago, I conducted a simple commuting test. Who could get me to work faster: a plain old cab or Lyft? At the time, the pink mustachioed Jeep that I conjured with my iPhone was a relatively new thing. But it got me where I needed to go 34 minutes faster than a taxi, plus no one yelled at or hung up on me.
Since then, drivers for Lyft and uberX and Sidecar—who offer people rides-for-hire in their personal cars and have essentially been driving illegal taxis—have multiplied. And the smartphone-based dispatch companies have won a loyal following of customers by making it much more convenient, pleasant, and efficient to get around the city without a car.
On Monday, that popularity paid off, as the Seattle City Council did an about-face and agreed to let those new Transportation Network Companies (TNCs) continue to grow legally without the arbitrary constraints that the city has imposed on taxis for decades. The Council on Monday essentially passed a compromise brokered by Mayor Ed Murray and supported by formerly splintered factions of the ride-for-hire industry. The results don’t exactly add up to a well-constructed and holistic transportation policy. They’re more like a kitchen sink of changes that gave everyone enough of something to stand behind the agreement.
It’s a major victory for the new ride service companies like uberX and Lyft, which did an end run around the Council’s earlier attempt to regulate them and to cap their numbers of drivers (as the city does with taxis). The TNCs took their case to voters by launching a referendum campaign to repeal that ordinance. Other cities have watched Seattle struggle to find the balance between ensuring that the new services are safe, legal, and responsibly regulated without killing their business model. The fact that the year-long debate here has been resolved largely in the TNCs’ favor could have national implications.
It’s also a win for consumers, who have an expanding array of ways to get around town without the hassle of driving one’s own car (presuming that some of the insurance uncertainties surrounding TNCs can be cleared up at the state level next year). Plentiful and affordable taxi-like services facilitate greener urban travel. They help families shed second cars, ride transit more often, walk to work in marginal weather, and provide a quick back-up option in case of emergencies. So residents of Seattle (and other local cities, as the companies expand their reach) have something to celebrate.
What the new ordinance means for the existing taxi and for-hire industry, which is dominated by African and East Asian immigrants, is less clear. Faced with the prospect of a straight-up popularity contest at the ballot box, some parts of the traditional industry made concessions they were previously unwilling to make. Over the last year, their arguments about fairness and racial equity and rule following resonated with a slim majority of the City Council. But there was little evidence that the public would care about those aspects of policymaking. What people tend to remember is the one (or many) times they were stuck out in rain at 2 a.m. waiting for a taxi that never showed up.
The taxi industry did win certain concessions—200 more taxi licenses to be issued over the next four years, some streamlined regulations, the ability for for-hire cars to pick up street hails, and a switch to a private property medallion system that existing taxi owners have sought. Though with an unlimited number of ride service drivers allowed on the road, it seems likely that the value of existing taxi licenses (some of which have traded for hundreds of thousands of dollars) will plummet.
Find this article interesting? Support more research like this with a gift!
At this point, it’s hard to know whether the changes will offer current for-hire drivers more opportunity, since they’ll have more choice in dispatch companies to sign on with, or whether existing drivers will have trouble making ends meet until a more deregulated market finds a new level.
Ben Yam, who has been driving a cab since 2008, says he’ll think about switching to a ride service company now. His friends who have made the jump have been making good money, at least so far. He wouldn’t have to deal with the same regulatory hassles or wear a uniform or operate under the constant threat of getting dinged by the city. He could work on his own schedule. And even though he’d have to purchase his own vehicle, he likes the idea of driving a nicer car and (since uberX uses a fleet of individually owned Priuses and other vehicles) one that doesn’t use as much gas.
Yam also worries that everyone else will have the same idea, and that with no limits on the number of drivers for TNCs like Lyft and Uber, it could make it difficult for any one of them to make a living. As he explained:
I don’t care who wins this fight as long as I can make money. But I am worried about the future. Since it’s unlimited and so many people will want to join, it seems like the market is going to be split many ways.
Monday’s decision is also arguably a loss for public process. At the most basic level, a handful of extremely well capitalized companies came in and started operating outside of existing laws, arguing they shouldn’t apply to their new business model. When the city disagreed and tried to impose some version of those laws on the companies (albeit with a narrow majority), the companies didn’t like it. So they started a signature-gathering campaign to get rid of the law. And, in the end, the city started over and crafted a law that those companies like much better.
The lone opposing vote on Monday came from City Council Member Mike O’Brien, who argued that a number of the ideas that grew out of the closed-door negotiations—like getting rid of cameras in taxis, converting taxi licenses to private property rights, and some of the insurance compromises—came out of left field and had not been vetted by the public, technical experts, or council members.
But the other eight council members heeded pleas from industry representatives to stop debating, pass the negotiated compromise, and let everyone get back to work. As Samatar Guled, president of the Seattle-King County For-Hire Association, put it:
We’ve been coming to meetings for over a year-and-a-half now, and we just want to get on with our lives. We don’t want any more deals and any more unreasonable things to be added onto what has already been agreed on.
So offshore tax evading uber bribed city officials into a compliance. Refreshing. Refreshing indeed.
Dom, I wouldn’t be so quick to go corporation bashing… the TNC’s would have won by initiative regardless of the city council vote and the vote would have have been overwhelmingly in their favor.
What it comes down to is safety and ease of transport; Uber, Sidecar, and Lyft are much safer for odd-hour transport, and much cheaper too. This was a decision in the name of competition and consumer choice. Just because they are corporations does not mean they are a signpost for evil. Have you ever tried to get a cab in Belltown or Pioneer Square after midnight without cash? My spouse has been dumped off in S.Seattle/ Belltown at 2:00AM multiple times because the cabby either wouldn’t take credit card or the fare was to a neighborhood that wasn’t where he wanted to go. Such business practices are appalling and must be discouraged in the name of public safety.
It’s time for the antiquated taxi system to step up its game (take CC’s, have a hailing app, provide good customer service) and I believe that this was exactly the kick in the butt they needed. As a citizen with no car – who relies heavily on public and alternative transport – this is a result to be celebrated. Plus, Uber is still so young, they probably haven’t even had time to go offshore with all that Google money.