In a major victory for the city’s taxi cab drivers, the Seattle City Council voted Monday to place limits on the number of drivers that alternative transportation companies like Uber and Lyft can have operating at any one time — the first U.S. city to do so.
The new law would limit three companies — UberX, Lyft and Sidecar — to 150 drivers each on the road at any given time, for a collective total of 450 drivers. That’s a significant decrease from the 2,000 drivers the three companies estimate they have operating in the city right now.
Taxi cab operators have said the new services have added so many drivers to city streets that it’s put them at a significant disadvantage. Seattle has not issued a new taxi license since 1990, when the city council passed a moratorium. The new legislation would issue an additional 200 taxi licenses over the next two years to the 688 traditional cabs already in operation.
But the new companies, known as Transportation Network Companies, say adding new for-hire vehicles is good for consumers, especially those who have to wait for long periods of time before one of the city’s taxis can be dispatched to their homes.
“The host of regulatory structures or policies seek to prioritize the interests of taxi monopolies over the interests of consumers,” said Nairi Hourdajian, a spokeswoman for the San Francisco-based Uber. “For decades, the taxi industry hasn’t evolved. They haven’t improved customer service. People who couldn’t get a ride a decade ago still can’t get a ride today.”
For the last year, a three-member committee has been holding monthly meetings to hammer out the new rules, meetings in which angry cab drivers and Uber and Lyft employees have been packed into the standing-room-only council chambers, the Seattle Times reported.
Seattle Mayor Ed Murray said in a statement he would sign the legislation but that he wants to see long-term fixes to the city’s transportation service sector.
“Had I been in office earlier than January, I would have sent my own recommendations to Council for integrating rideshare companies into our existing regulatory framework while also reforming that framework to ease undue burdens on taxis,” Murray said. “While I intend to sign the legislation approved by the Council today, I do not believe it is either a complete solution or a long-term solution.”
Murray has 10 days to sign the bill, which would take effect within 30 days of mayoral approval.
Seattle’s new legislation will require Uber, Lyft and Sidecar drivers to get insurance that meets Washington State requirements. Council members said they were frustrated that the companies hadn’t been forthcoming about the insurance they required of drivers; now, drivers will have to purchase commercial insurance.
The three companies vying for Seattle passenger dollars have received tens of millions in investments from prominent venture capital firms. Amazon CEO Jeff Bezos, who owns The Washington Post, is an investor in Uber.
Seattle is the first city to place operating caps on alternative for-hire services like Uber, Lyft and Sidecar. The D.C. City Council was considering similar restrictions that Uber worried would have hurt its business in the nation’s capital, but the fight was settled through an agreement in 2012 that codified the companies’ rights to operate. Miami, Houston, Portland, Ore., Austin, Tex., and New Orleans have refused to allow companies like Uber and Lyft to operate. Minneapolis, St. Paul, Milwaukee and Detroit have required the companies operate like taxi cabs.
Uber has also faced challenges in cities overseas trying to regulate their business. The company, and several similar French services, are challenging a new regulation that requires car services to wait at least 15 minutes between taking a reservation and picking up a customer, more than twice the average amount of time it takes for Uber to collect a customer in Paris, the Wall Street Journal reported.