By Jenny Xie, March 18, 2014
A Lyft driver waits in her car as a taxi cab passes her in San Francisco.
Yesterday afternoon, the Seattle City Council unanimously voted to limit the capacity of uberX, Lyft, SideCar, and other on-demand transportation services in the city.
The new regulation caps the number of drivers at 150 for each service at any given time. The Council will also require those services to meet state insurance rules already imposed on traditional taxis - both Uber and Lyft are currently on track to do so.
Setting a cap means these services won't be able to compete with the established taxi industry. At 150 drivers, they simply won't be able to keep up with demand. As one uberX driver told The Seattle Times, “In rush hour, 150 drivers each is not going to be enough. It’s not even enough for downtown."
The bill would also force hundreds of drivers off the roads - uberX alone employs nearly 1,000 drivers in the city.
These services have faced regulatory hurdles in virtually every city they're attempting to expand to. So far, Uber has been barred from setting up shop in Miami, Portland, and New Orleans entirely. And in Chicago, where Uber and Lyft already operate, taxi drivers have filed a lawsuit against the city for not regulating these services as stringently as it has the taxi industry. There was, however, some success in California, which recently rolled out a specialized regulation framework for these new transportation services, now designated as "Transportation Network Companies."
Seattle's measure has been controversial. Last month, tech industry folks in the city started a petition urging the council to drop the proposed restrictions in order to promote competition and innovation.
But the council stood firm. According to a GeekWire live blog of the voting session yesterday, Councilwoman Sally Clark criticized the companies for failing to adequately communicate and collaborate with regulators. Councilman Bruce Harrell was also quoted saying, "the headline should not read City Council capped anything. It should read that it allowed rideshares to come into industry."
The decision is also a defensive move, an effort to buy some time for the existing taxi companies before companies like Uber and Lyft cause too much disruption.
"This is a wake-up call for taxi industry. It has to change in order to thrive. Now you have time to do that," says Harrell.
Mayor Ed Murray, who has 10 days to sign the bill into law, said in a statement that he hopes to phase out of driver limits after the council figures out how to fairly de-regulate the local taxi industry.