San Antonio City Council will vote next Thursday on whether to adopt new rules that would allow rideshare companies like Lyft and Uber to legally operate in San Antonio. It’s a process dozens of cities have gone through and dozens more will likely address in the coming months. San Antonio is the latest stop in the national rideshare debate: how do you regulate an “app?”
A representative for Lyft, one such transportation network company (TNC), said the recommended rules presented to City Council B Session on Wednesday would likely mean pulling service from the city as the regulations would make their business model – connecting drivers to riders via a mobile application – too expensive for the company and its drivers to operate in San Antonio.
Lyft suspended operations in Houston earlier this year after similar rules to those proposed locally were approved by Houston City Council. Uber continues to operate in Houston.
The recommendations came from the City Council Public Safety Committee and San Antonio Police Chief William McManus after reviewing a report from a vehicle-for-hire stakeholder task force and making a few adjustments. It was standing room only as supporters of the traditional taxi cab industry and rideshare companies observed Wednesday’s proceedings. Download McManus’s presentation here.
John Bouloubasis, president of Yellow Cab of San Antonio who represented the traditional taxi cab industry on the task force, said he was pleased with the recommendations overall, but that “the devil is in the details … we just want to make sure that the language is proper.
“We’re dealing with public safety,” he added. “The driver processing, the vehicle processing are all put in place to protect the public … it’s the cost to be in business, not a barrier to entry”
Several council members expressed measured satisfaction with requiring both TNCs and traditional vehicles for hire to go through a third-party vehicle inspection (taking that responsibility away from the City) and for keeping the rule that TNC driver background checks be verified by SAPD’s fingerprinting process.
District 3 Councilmember Rebecca Viagran suggested that in addition to random verification of inspection, driver training, insurance, and other certifications, the TNCs (and/or its drivers) should be required to provide documentation of those materials to the City before receiving a permit.
“I don’t think that is a stretch … to establish a process,” Viagran said.
Other council members, District 4 Councilmember Ray Saldaña and District 8 Councilmember Ron Nirenberg, said they were concerned that some of the requirements are based on reasons beyond public safety.
“I’m not okay with putting things into the ordinance for the appearance of safety that are really only obstacles for doing business,” Nirenberg said. “New entrance and competition will help support a vibrant (industry).”
District 2 Councilmember Keith Toney said he was skeptical of the TNC’s capacity to follow any future rules since Lyft and Uber have been operating despite a cease and desist order from SAPD. The proposed rule that TNCs should “attest” to the validity of their drivers and “police themselves” gave Toney pause.
“They’ve shown that they really can not abide by the rules,” he said.
“Punishment should not be in the law,” Nirenberg said. “There are other ways of tackling that problem.”
McManus assured council members that no part of the recommendation was constructed to “punish” Lyft or Uber. “We are here today to try to allow the TNCs to work (in) the city, and I don’t think that compromising public safety for any (industry) is good for the city … we should not overlook them (because) the TNCs don’t want to be regulated.”
Lyft and Uber representatives have maintained that their business model does not violate the vehicle for hire ordinance – as outlined in Chapter 33 of City Code. There is no mention of TNCs in the code language.
“The (task force) had good recommendations,” said April Mims, Lyft public policy manager. “Those were taken and altered throughout the process … we’re very uncomfortable with these.”
One of the main concerns, Mims said, is the insurance requirements. When the app is “off” in a driver’s car, their personal insurance would apply. When the app is “on” and they’ve initiated the process of picking up a passenger or have picked up a passenger, the TNC’s $1 million insurance policy goes into effect. The problem TNCs have is with the insurance requirement for the in-between stage – when the app is “on” but the driver is essentially waiting for a passenger to request a ride. For this scenario, McManus said, TNCs must provide $200,000 in excess liability to cover costs of accidents that exceed the driver’s policy limits.
“That could increased our costs up to 500%,” Mims said. “Insurance needs to be in place to respond to risk and there is no increased risk to having an app on in the background just like you would Facebook or Ebay or any other app. .. If you know as a driver that all you have to do is turn on your app and you’re covered by our (Lyft’s) insurance, why would you ever buy a new (insurance policy)?”
Lyft and Uber have been required to pay annual vehicle and administrative fees in other municipalities. San Antonio’s proposal calls for a one time, $110 application fee, an annual $160 vehicle permit fee, and a biennial driver permit fee to cover the cost of administrative staff and Ground Transportation Units performing random inspections.
“We’re fine with paying upfront and annual fees,” but the insurance, state background checks, and requiring each driver to provide documentation is too much bureaucracy to navigate for the average part-time rideshare driver, Mims said. “(They’re) only thinking of it comparing apples to apples, but it’s a completely different platform.
The TNCs’ concern is that drivers with other full-time jobs, who are single parents, or juggle complicated schedules will not be able to spend the necessary time and attention to go through a more regulated process.
“(Ultimately) it’ll reduce the number of drivers – will have an impact on passengers because they’re not going to be able to use you guys if they open up the app and there are no drivers,” she told a group of concerned Lyft drivers that attended the almost two-hour meeting on Wednesday. “In order to work, (Lyft) has to be on-demand. If it’s not on demand they might as well call a traditional (taxi) service.”
*Featured/top image: City Council member listen to San Antonio Police Chief William McManus’ rideshare recommendations during B Session. Photo by Iris Dimmick.
See all rideshare coverage here.