City Council committee votes to let Uber operate, but company rejects some conditions

Posted on: March 7 2015


Ride-hailing services in New Orleans moved a bit closer to reality Thursday, with a measure that would allow them to operate sailing out of a City Council committee despite criticism from some people on both sides of the issue.

The ordinance to allow services like Uber — known as “transportation network services” in legal parlance — isn’t expected to come up for a final council vote anytime soon, however.

While council members stressed the importance of finding a balance that ensures a fair playing field for both the new ride-hailing apps and traditional cab companies, a key question remained: whether drivers for Uber and similar companies should be held to the recently increased standards required of taxi companies or whether those strict rules should be rolled back so that all companies could battle it out in a less-regulated market.

How the issue shakes out could have repercussions beyond Orleans Parish.

Jefferson Parish officials are watching what happens in the city and working with New Orleans officials to ensure that whatever standards are set cover the entire region.

Council members Thursday seemed largely in agreement that they should enact regulations governing Uber and other companies that allow customers to hail rides with nonprofessional drivers for a fee.

“As we continue to be a city on the cutting edge, we must embrace new ways of doing things,” said Councilman Jared Brossett, chairman of the council’s Transportation Committee. “We need to make our industry better, more complete and more modern.”

At the same time, he said, Uber needs to be regulated as it comes into the market, particularly with regard to insurance.

The proposed insurance requirements and other suggested rules have been called excessive by Uber officials, who said they couldn’t operate under the ordinance as now written and as approved Thursday by the Transportation Committee.

Brossett said there will be changes before the full council votes.

Uber supporters, including several people who have signed up to be drivers when the app launches in New Orleans, called on the council to allow the service, sharing stories of cabs that didn’t show up or refused to provide service to certain areas of the city.

Cab drivers largely supported the proposed measure, which bears similarities to the requirements put in place for cab drivers before the Super Bowl in 2013.

The issue of regulations comes down mainly to a matter of dollars and cents.

Cabbies or their companies already have had to pay for upgrades to comply with the new regulations, upgrades that some said cost up to $40,000 per cab. With that money spent, there’s little benefit for traditional cabs if the regulations are now loosened, particularly if it’s done so that more competitors can flood into the market and claim a chunk of the business.

At the same time, the business model of Uber and similar companies relies on making it as easy and cheap as possible to recruit drivers who pick up riders with their own vehicles. Any obstacles could reduce the number of people who sign up as drivers, and the fewer drivers there are, the less the company can make from fares and the less efficient it seems to the end user.

While the ride-hailing ordinance does not call for vehicles to be equipped with the GPS devices, cameras and other systems that are now required in cabs, it does hold them to other standards in place for the taxi industry. As with the taxi industry, vehicles older than 7 years would be prohibited, and those cars would have to be regularly inspected.

Drivers also would have to agree to provide copies of their driver’s license, registration and other information to the city, something Uber has characterized as an invasion of privacy.

It’s not clear whether the council will decide to require Uber to meet the standards in place for the taxi industry. In fact, Councilman Jason Williams suggested rolling back some of the relatively new regulations on taxis might be the way to go.

“A big part of the problem rests with a decision to regulate an industry at a time when there was a wave of deregulation across the country,” he said. He added that he would “vigorously support” taking another look at the regulations that are already in place and that were strongly backed by the Landrieu administration and tourism leaders.

The debate in New Orleans is expected to play a significant role in how Uber is regulated in Jefferson Parish, where council members have delayed a vote on their ride-hailing ordinance to see how things develop in the city. Brossett said that’s a good development and a sign of regional collaboration.

Jefferson officials cite a desire to ensure customers know what to get as they travel between tightly linked parishes.

“So many of our residents are going to go to New Orleans, have dinner and come back home,” said Jefferson Councilwoman Cynthia Lee-Sheng, who authored the proposed Uber ordinance in Jefferson along with Councilman Ben Zahn.