New Orleans City Council introduces regulation changes as Uber digital car hiring service looks to enter the city

Posted on: June 6 2014
By Mark Waller, | The Times-Picayune

With the Uber digital car hiring service showing interest in entering New Orleans - a prospect that has tended to raise questions about the line between regulation of the transportation industry and market freedom in cities around the world - proposed ordinance changes have emerged on the New Orleans City Council. Uber's locally based manager, however, said the changes as now written would not be enough for the San Francisco firm to extend coverage to the city.

The proposals, sponsored by council members Jared Brossett and Jason Williams, remove a three-hour minimum for hiring luxury cars and add language explicitly stating that rides can be arranged through an "internet-based software application." Dropping the time minimum and nodding to the use of an app move in the direction of allowing Uber, which has indicated it wants to activate in New Orleans the version of its service that uses a mobile app to let people hail high-end vehicles, which is called Uber Black.

But the proposed regulations leave intact fare minimums - $25 for luxury sedan rides and $35 for luxury sport utility vehicles - defying Uber's insistence on open market pricing.

"We're encouraged by the introduction of these ordinance changes," said Tom Hayes, Uber's general manager in New Orleans. "However, they don't go far enough. Especially because of the fare minimum, we would not actually be able to operate under the proposed changes."

Hayes said some markets have initial charges agreed upon by the industry - not imposed by government - such as a $7 fee in New York. But the fees in New Orleans would make it a more expensive place to hire a care than New York.

"In none of the other markets that we operate do we face this type of regulation," Hayes said.

He described regulations for the purposes of safety as healthy, but regulations setting prices as interfering with the market.

"With restaurants, for example, we use government to kind of protect and make sure the food is safe and it remains healthy," he said. "But we never heard of the government saying you need to charge this much for a steak."

But, Hayes said, the company plans to work and talk with city officials as the regulations, which were initially introduced on Thursday, make their way through the council's legislative process.

"We want to provide what customers are emailing us and calling us about in a tremendous volume on a daily basis," in New Orleans, he said.

Tyler Gamble, spokesman for Mayor Mitch Landrieu's administration, said the changes are an extension of a 2012 effort to update transportation codes, when the City Council added requirements for taxi operators to maintain newer cars and install Global Positioning System navigation technology, security cameras and credit card machines.

"We are now looking to make updates to the limo section of the code, including allowing customers to have the ability to pre-arrange luxury car service via technology," Gamble wrote in an email to | The Times-Picayune. "These changes will allow for our residents and visitors to take advantage of the latest technology and applications when arranging luxury transportation while tailoring that model for the New Orleans market."

The New Orleans Taxicab Bureau barred Uber from operating in the city last year because it lacked registrations spelled out in city codes.

That move triggered a backlash from members of the tourism and technology industries, who argued the city's position on Uber symbolizes its overall openness to technology, innovation and free enterprise. An online petition calling for allowing Uber has attracted 1,700 signatures so far.

The proposed ordinance retains other provisions that seem to defy Uber's unfettered approach, such as a requirement that limo operators must own at least two vehicles to be qualified to work in the city.

Uber has encountered regulatory friction and opposition from the established taxi and limousine industry in many locations, with arguments that it circumvents rules on safety, non-discriminating treatment of customers and fair pricing.

Hayes argued Uber is a technological platform that encourages entrepreneurs who want to start their own car services. The company connects riders with participating cars but does not own or operate cars or employ drivers.