There. I said it. By any reasonable reading of the municipal code, Lyft, Sidecar, and uberX drivers are operating illegally in the City of Seattle. They are are unlawful. They are illegal. They are against the law. And this basic statement of fact is absolutely crucial to understanding that, rather than crushing innovation in the service of protecting the status quo, what the city council is really in the process of doing is legalizing an industry that has thus far operated in brazen violation of the law.
Whooh. I can’t tell you what a relief it is to get that off my chest.*
There is likely no issue on which I more broadly pissed off Stranger readers, than my coverage of the proposed taxi and “ride-share” regulations. Capitol Hill hipsters apparently love booking rides on their smartphones almost as much as they love to hate on traditional taxis, and so the coverage they wanted and expected was one that would unflinchingly embrace this disruptive new technology, while telling the decrepit old regulated taxi industry to go fuck itself. And I totally agree, based on my own anecdotal experience, that these new “transportation network companies” or “TNCs” (as they are referred to in the proposed ordinance) generally provide a far superior user experience than Yellow Cab and its cohorts.
But having plunged into this issue with no predispositions, and having ultimately wrapped my mind around an exceedingly complex policy debate, that is not the coverage I could provide. More nuanced critics accused me of being “anti-urbanist;” the less nuanced attempted to dismiss me as being in the pocket of the taxi industry (as if there’s any money in that). But the truth is that the taxi industry provides essential transportation services to a customer base that the TNCs cannot or will not serve. And the truth is—and this at the heart of the issue the council is addressing—the TNCs are operating illegally.
“No matter how sexy these services are,” council member Bruce Harrell proclaimed before voting to cap the number of TNC drivers, “they are unlawful in the City of Seattle.” And Harrell, an attorney, did not choose his words carelessly. It is a criminal offense in the City of Seattle to pick up paying passengers without a for-hire license, punishable by up to 90 days in jail and a $1,000 fine. The Seattle City Attorney’s Office determined last year that TNCs “are subject to for-hire vehicle licensing and regulation requirements.” While the city has yet to enforce these regulations on TNC drivers, it might not take more than a handful of prosecutions to chill the industry.
So whatever limitations the council might impose on the TNCs in the ordinance it is expected to pass next week, above all what the council is doing is legalizing an industry that has heretofore operated without licensing, without inspection, without training, without guarantees of adequate insurance, and in blatant violation of the rule of law. So it’s not like the TNCs aren’t getting anything in return.
The TNCs angrily denounce proposed caps, accusing the council of limiting competition in order to protect the taxi industry. And they are right. That has always been part of the challenge facing the council: how to legitimize the popular TNC services without undermining the still indispensable taxi industry. Not everybody has a smartphone and a credit card. A recent study found that taxis, which accept cash and scrip, serve a disproportionately older and poorer customer base, as well as our crucial tourism industry. Taxis operate accessible vehicles, and provide discounted fares through Hopelink and other social service contracts. They also provide a livelihood to their traditionally immigrant drivers and owners.
However superior uberX might be at getting you home after a heavy night of drinking, it is in the public interest to maintain a healthy taxi industry as well.
How do we sustain the taxi industry in the face of all this new competition? Seattle disastrously experimented with taxi deregulation in the 1980s, removing all caps and price controls only to see prices rise, service deteriorate, and incomes fall in the face of a Malthusian collapse—so there is understandably little support on the council to repeat that experiment in the interest of accommodating the TNCs. And “if we are regulating one half of the market,” argues council member Nick Licata, “we can’t ignore the open-source half” without creating an unlevel playing field.
That is the delicate balance the council is attempting to strike: a regulatory structure that allows the TNCs to legally enter the market while giving the taxi industry the breathing space necessary to adapt to a new reality. Apps like TaxiMagic and particularly Flywheel are already close to providing the same slick user experience TNC customers have come to expect; Yellow Cab, by far the city’s largest taxi association, is in the process of upgrading its dispatch system with plans to release its own competitive app later this year. There’s no question that the innovative TNCs are forcing the the taxi industry to improve its service. There’s also no question that the council will need to revisit taxi and TNC regulations in the years to come.
Maybe the proposed TNC cap is too low. Maybe it is too high. Maybe, ultimately, caps will prove unnecessary at all. But the goal is to transition into a market where both the TNCs and the taxis can peacefully and profitably coexist. And the first step is legalizing the TNCs currently unlawful operations.