(Adds background on regulatory landscape in other cities)
By Jonathan Kaminsky
OLYMPIA, Wash., March 18 Seattle lawmakers on
Monday voted to cap the number of rideshare company drivers in a
hotly contested move to limit a nascent industry that has
emerged in dozens of cities to compete with traditional taxis.
The rules, approved unanimously by the Seattle City Council,
will limit each of the three ridesharing companies - UberX,
Lyft, and Sidecar - operating in the Pacific Northwest city of
about 630,000 people to 150 drivers on the road at any time.
Seattle Mayor Ed Murray said he would sign the measure into
law, despite concerns the limits were too strict.
The companies, which allow members of the public to hail
rides at the touch of a smartphone app from drivers using their
own cars, have said the rules will make it difficult, if not
impossible, for them to continue operating in Seattle.
The companies together have at least 2,000 drivers citywide,
according to the Seattle Times newspaper.
In addition to capping the number of drivers, the council
also moved to require that drivers and cars meet state insurance
rules already in place for taxis.
"In cities across the United States and other parts of the
globe, companies have chosen to launch first, ask questions
later," said Seattle City Council President Sally Clark in a
The limits and changes are to last a year, when they could
Getting legislators and regulators on board with ridesharing
is a key part of the ridesharing companies' business plans, with
many local officials specifically citing insurance coverage
among other concerns.
UberX on Friday expanded the insurance coverage it offers to
ridesharing drivers, a new policy designed to make drivers more
comfortable, along with regulators and lawmakers working through
industry rules, the company said.
Lyft allows customers to book rides from a network of
screened drivers and Sidecar offers a similar peer-based
Regulatory and other hurdles have hurt ridesharing
companies' expansion in U.S. cities, such as Miami, while other
places are considering legislation.
In California state regulators last year gave the green
light to ridesharing enterprises, along with some conditions,
which had taxi companies saying the alternatives lacked the
safeguards they provide and makes for unfair competition.
The move is a victory for Seattle's traditional taxi and
car-for-hire drivers and companies, which have said the
app-based ride service operate at an unfair advantage because
they don't have to abide by rules such as having to accommodate
elderly or infirm customers.
Uber Seattle General Manager Brooke Steger, whose company
lobbied aggressively to defeat the proposed rules, said their
passage means Uber will not have enough drivers to keep up when
demand is highest.
"It's astounding that the City Council has chosen to ignore
the voices of nearly 30,000 constituents and move to put
hundreds of drivers out of work," Steger said in a statement.
Uber has faced criticism in recent months for its practice
of surge pricing, in which it increases the cost of a car ride -
sometimes several times over - at times when demand is highest,
such as during a snowstorm. Uber Chief Executive Travis Kalanick
has defended the practice as an example of market-driven
(Reporting by Jonathan Kaminsky in Olympia, Washington; Editing
by Eric M. Johnson and Eric Walsh)