Explaining my no vote on the new taxi, for-hire and TNC regs


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Today, I was the lone vote against Council Bill 118140. This bill was worked out by the Mayor’s office in a negotiated deal with industry stakeholders from the Transportation Network Companies (TNCs, such as Uber, Lyft and Sidecar), the taxi industry and the for-hire vehicle industry. There was no opportunity for the public to vet this bill, and no time for the City Council to explore the major policy questions inherent in the bill.

My first choice would have been to work the bill longer by referring it back to the Committee on Taxi, For Hire and Limousine Regulations. That motion failed. In the name of public safety and with the support of the insurance industry, I also tried to amend the bill to eliminate the “insurance gap” included in the bill, but that amendment failed as well. I could not in good conscience support the bill that introduces major policy changes with absolutely no public process and that undermines existing state insurance regulations set in place to protect public safety.

I think it is incredibly unfortunate that we are here today with massive pressure to pass a bill that I would hazard to guess few of my Council colleagues have read all 113 pages of. This massive pressure comes in the form of a threat of an initiative from the TNCs. These multi-billion dollar corporations told the City of Seattle that if we didn’t simply rubber-stamp this deal today without any scrutiny, we will face an initiative that writes the law to the sole favor of their bottom lines.

And we feel this pressure because we know that a TNC-backed initiative would likely pass for two reasons. The first is simple and it is why the Seattle City Council became the first municipal government in the country to legalize their operations: people in Seattle want the service that the TNCs provide. The second reason we think their initiative would pass is because of the simple fact that they have nearly unlimited resources with which to put into a campaign to win at the ballot in November.

So given this threat, and given this fear that we could end up with a worse law for consumers and drivers than we have today, why did I vote against the bill and want to spend more time working to strengthen it?

Simply put – we have a legislative process for a reason, and while it is not always the most efficient and doesn’t always yield the best result, it is a public process that allows us as the elected policy makers in this city to weigh in on the most important policy decisions in any one piece of legislation.

Our legislative process is also designed to give the public an opportunity to examine and weigh in on the important policy decisions that we have to make. I am not comfortable moving on a bill that hardly any of us have had time to wrap our heads around, let alone the general public.

I respect the Mayor’s effort to build a consensus from the taxis, for-hires and TNCs around this deal, but that does not absolve us on the City Council of our public responsibility to ensure the deal is a good one for consumers and drivers. In this case, with a massive bill that legalizes a new service and adjusts regulations for an existing industry, there are numerous important policy issues that should be examined and discussed by this body. But under the threat of an initiative we were forced to gloss over numerous significant policy questions. Consider the following policy issues that I feel require further examination.

Insurance

Currently, the State sets the insurance requirements for taxis and for-hires. This ordinance would take that out of the hands of the state and allow the city to grant exceptions to the state requirements, for a “provisional period.” What are the implications of this? Why would we allow weaker insurance requirements than what the state requires? How is the public better served by this change?

If we accept this bill, we are creating a system of confusion that, in the event of a serious accident, could leave victims hanging out to dry while insurance companies are caught in extensive litigation to determine liability. This so-called “insurance-gap” has been identified as a major concern across the country, wherever TNCs operate. The gap exists when a driver is on the app but does not yet have a passenger. The TNCs claim this is not commercial activity and so the driver is covered by her/his personal insurance. The problem is that insurance companies say that being on the app is commercial activity and that personal insurance does not cover any action a driver takes while active on the app, passenger or no passenger.

Insurance professionals have had very little no time to weigh in on this and help inform our thinking. But by supporting this bill today, my colleagues have willingly shirked our responsibility to close this gap and that our own goals for public safety in this industry are being met.

Medallion system

This ordinance fundamentally changes the taxi and for-hire industry by converting vehicle licenses into “medallions,” essentially creating property rights for the owner. Making this change is a fundamental policy change for our taxi industry and that comes with significant pros and cons. Some say medallions are great for owners—an investment that is transferable, will add value, and allow owners to borrow against it. On the other hand we hear that medallions will cement an unjust power structure within the industry between owners and the drivers who lease their vehicles.

Fees

This ordinance introduces a $0.10 fee per ride for TNCs, with the possibility of adjusting the fee to cover the cost of enforcing the regulations pertaining to TNCs. In addition, the fees are not to exceed $525,000 in year one for TNCs. The policy questions we are ignoring here include: what is the basis for these numbers? How will FAS determine what share of its enforcement is for TNCs (as opposed to taxis and for-hires)? What if the enforcement of rideshare regulations costs more than the proposed cap of $525,000? Why isn’t there a similar fee cap proposed for taxis and for-hires?

In-vehicle cameras

We have heard from a number of drivers and passengers that cameras are essential to protecting their safety. We have no real basis for understanding what the real safety implications are for getting rid of security cameras.  But by accepting this bill today, we have lost the opportunity to engage in this debate.

Driver Licensing

Taxi drivers currently have to take days of training before being granted a license. An earlier version of this bill required a 4-hour online training. Now it just requires “a training.” What kind of training, and how much will actually protect passengers? I can’t tell you right now.  According to this bill, anyone can get a provisional license with the right paperwork within 48 hours. The catch is that this documentation is not verified for 60 days. What kind of information could slip by us in the interim? Who will be allowed to drive that shouldn’t be allowed to? We have no way of assessing that at this time. How can we ensure passengers are getting into a vehicle with safe drivers if we pass this bill today?

Enforcement

Many of the penalties in this ordinance may seem comparable to what we required of taxis and for-hires, but we have not had the chance to look at the enforcement adequately given the new realities of the rideshare industry. Overall, it is unclear how the penalties for violating the ordinance are fairly distributed between the companies and the drivers. At what point should the companies be responsible for the actions of their drivers? How can we trust that this is a fair penalty system that will actually deter violations, when it is those who are set to be punished making up their own penalties?

 

Because of we were unable to dig into and resolve these major policy issues, I voted against Council Bill 118140.

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Comment from Google
Time August 14, 2014 at 10:19 am

Fine way of explaining, and good article to take facts on the topic of my presentation focus, which i am going to present in institution of higher education.

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