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Uber legalization ordinances proposed by New Orleans City Council members

Posted on: January 23 2015 | Posted in: Latest News

By Robert McClendon, NOLA.com | The Times-Picayune

New Orleans drivers would be able to use their vehicles as part-time taxicabs, dispatched through "ride-sharing" phone applications such as Uber and Lyft under a newly proposed ordinances before the City Council. Council members Susan Guidry and Jared Brossett have each sponsored measures that would let "transportation network companies" that follow certain rules hire drivers who use their personal vehicles.

Guidry and Brossett said that the City Council has been discussing ride-sharing since last summer, when it legalized app-based transportation for hire, and time has come to act.

"The for-hire transportation industry is changing. In many ways it is changing for the better," Brossett said. "New technology and new ways of of operating are providing new options for citizens."

Tom Hayes, general manager for Uber New Orleans, called the ordinance "a step in the right direction by introducing regulations that support ride sharing in New Orleans. We look forward to working together to move sensible legislation across the finish line and provide New Orleanians with the opportunity and choice they deserve." Hayes did not comment on the substance of the ordinance or its provisions, which were only recently made public.

Ride-sharing has sparked controversy in cities around the globe, as critics raise concerns about safety for riders and fairness to established taxicab companies and drivers, which tend to operate under strict regulations and are often subject to extreme barriers to entry. In New York, the city issued so few taxi medallions, which give cabbies the right to operate, that a pair of them sold for $1 million each in 2011. As Uber established itself in the car-for-hire market, the price of medallions plummeted.

Uber in particular has been called out for its aggressive business practices and the sometimes disdainful comments of its executives.

Those issues and more have been debated at length in public hearings before the City Council.

Guidry said in a statement that it's time to act.

"This is an issue we must deal with, and my goal is to ensure that we adopt clear and common-sense policies," Guidry said. "My ordinance seeks to embrace this new technology and ensure public safety and consumer protection."

The measures on offer from Guidry and Brossett include some broadly similar regulations. Both would require companies to:

  • Obtain permits and pay an annual fee.
  • Conduct criminal background checks on drivers in its network and keep a list of them on file.
  • Perform vehicle inspections on the cars used by its drivers.
  • Place logos on cars while they are in service.
  • Have commercial liability insurance.

They differ when it comes to details, however. Guidry's ordinance would set the fee for a license at $100,000, while Brossett's sets it at $75,000.

They would also handle the insurance requirement differently. While both demand the companies have commercial liability insurance on vehicles when they are in service, Guidry's ordinance expressly declares any personal insurance carried by the driver to be inapplicable for accidents that occur when the driver is working for hire.  Either the driver or the company must have commercial insurance specifically written to cover drivers working for companies like Uber or Lyft.

Brossett's would require the companies to have the same kind of insurance as those of a traditional cab company.

They also handle "surge" pricing differently. Uber's signature pricing system, surge pricing automatically raises fares during times of peak demand.

Uber has taken heat for its pricing practices in the past, especially during disasters or other emergencies. When prices spiked ahead of Hurricane Sandy's landfall on the East Coast, critics accused the company of price gouging.

In the ensuing public relations debacle, Uber agreed to cap its surge pricing during emergencies.

In Sydney, Australia, no such cap existed in December when a gunman took hostages at a cafe in the heart of the city. Prices spiked, prompting another backlash that forced the company to issue refunds.

Such responsive pricing schemes would be prohibited during emergencies, under Guidry's ordinance. Brossett caps rates in general, whether or not there is an emergency. Drivers could charge no more than at 1.5 times the average rates charged during the preceding three months.

Now that the ordinances have been formally introduced, they are likely to head to the transportation committee for debate and amendments.

"We'll just look at them and take the best ideas from both of them," said Brossett. "We are working toward the same thing."

The City Council previously opened the door to Uber-Black, the company's up-market offering. But ride sharing, in which people use their own cars as transportation for hire, remained illegal.

Jefferson Parish also is considering allowing ride sharing services.