In a move that disappointed backers of both ridesharing services and the traditional taxi industry, a City Council committee voted Thursday to cap the number of cars that apps like Lyft, UberX and Sidecar can deploy in Seattle. If the full council and the Mayor pass the legislation, only 150 drivers from each ridesharing app would be allowed to pick up passengers at any one time.
Uber and Lyft have argued that driver caps will “effectively” shut them down in Seattle by impeding their ability to meet demand. Those involved in the taxi and flat rate for-hire car businesses have supported rideshare driver caps, saying that the tech upstarts are stealing business without playing by the same regulatory rules. But they’re dissatisfied with the driver cap passed on Thursday because it doesn’t limit the number of apps, called Transportation Network Companies, or TNCs, in the legislation.
“You can have UberX, UberY, UberZ,” said Yohannes Sium. "It's a race to the bottom."
A lawyer who works with the Seattle King County Taxicab Owner’s Alliance, and whose father immigrated from Eritrea and has driven a taxi for over 30 years, Sium believes the council’s ordinance will not stop new TNCs from flooding the market with vehicles.
“Today was a mess,” he said.
Uber’s general manager in Seattle, Brooke Steger, agreed with his assessment.
“This will put hundreds of drivers out of business,” she said, adding that the limit on drivers could also make it tough for passengers using UberX outside of downtown and at peak times.
“In Capitol Hill on a Friday," she said, "there won’t be any availability with these caps.”
Uber does not share specifics about the number of drivers using their app. But Steger said on a busy Friday night there are between 300 and 800 UberX drivers active in Seattle.
The committee’s approval of the cap was a significant step toward putting the heated, months-long debate about ridesharing regulations to bed. A full council vote on the legislation could take place on March 10.
The amendment capping the number of “live” drivers on each app at 150 passed 5-4, with votes from committee chair Sally Clark, Tom Rasmussen, Sally Bagshaw, Tim Burgess and Jean Godden. Bruce Harrell, Mike O’Brien, Kshama Sawant and Nick Licata voted against it, favoring another proposal that would’ve limited the total number of TNC drivers using personal vehicles in the city to 400.
In the draft ordinance the council has been considering, a cap on the total number of drivers was set at 300. O’Brien proposed increasing it by 100 on Thursday.
By not imposing an overall cap, Harrell was concerned that the TNC driver market could become bloated, giving companies too much leverage. “There’s not an equal bargaining, playing field between the driver and these companies that are capitalized by the likes of Google,” Harrell said. “They don’t have the same negotiating power.”
Sawant expressed a similar view. “I do not believe for one moment, that the TNC companies have any interest other than their own profits,” she said.
While the meeting wasn’t exactly a nail-biter, there was some legislative jockeying. Bagshaw, Rasmussen and Burgess went into the meeting opposed to TNC driver caps. The three voted for an amendment that would’ve removed any limits on the number of TNC drivers from the legislation. When it failed, they backed the 150-per-app limit.
Clark had introduced an amendment in the last committee meeting that would’ve increased the limit on the total number of TNC drivers from 300 to 600. This measure was similar to the one backed by Harrell, O’Brien and Sawant. But on Thursday she rolled out a new amendment: the one that eventually passed. Initially she proposed setting the limit at 200 drivers per app. Godden suggested lowering the limit to 100 drivers per app. Burgess pushed successfully to have it bumped up to 150 just before the vote.
When explaining her rationale for the per-app caps, Clark said that she believed it was the simplest way to ensure that there is enough drivers on the apps, while also imposing a limit. "None of these are particularly perfect," she said referring to the options for capping drivers.
A common complaint among the councilmembers is that the TNCs do not share data about the number of drivers using their systems, which makes it difficult to set a cap that will be in line with passenger demand.
“We pride ourselves on making strong policy decisions based on data,” Harrell said. “We don’t know the number of Uber drivers out there.”
The Committee on Taxi, For Hire and Limousine Regulation conducted its first review of ridesharing last May. Standing room only crowds packed the Council Chambers during many of the eight meetings that followed. Dozens of protesting cabbies blocked Fourth Avenue in front of City Hall last August and TNCs have held rallies and bombarded councilmembers with petitions.
The caps are part of a broader package of proposed TNC regulations, which also includes standards for auto insurance, vehicle inspections and driver permitting. The council would revisit the regulations in June 2015. In addition to the rideshare rules, the legislation calls for the city to issue 100 new taxi licenses annually this year and next year.
If approved by Mayor Ed Murray, the new TNC rules would go into effect 30 days later. Though he does not favor the driver caps, Murray said earlier this month that he was not considering a veto.
