Rideshare advocates stand in support of Lyft and Uber during a City Council meeting that resulted in approval of strict rideshare regulation. Photo by Iris Dimmick.
Rideshare advocates stand in support of Lyft and Uber during a City Council meeting that resulted in approval of strict rideshare regulation in December 2014 that ultimately took effect April 1, 2015. Credit: Iris Dimmick / San Antonio Report

Uber management sent a letter to Mayor Ivy Taylor and City Council Wednesday, warning that the rideshare service will leave San Antonio on March 1 unless the recently-passed existing ordinance is modified or repealed.

Uber representatives say the new ordinances raises “substantial barriers” to ridehsare companies operating in the city. The ordinance was aggressively pushed by the local taxi industry and former Police Chief William McManus.

Mayor Taylor and Councilmember Rebecca Viagran (D3), chair of the City’s Public Safety Committee, which studied the issue and recommended the restrictive measure while supporting the local taxi industry, led Council in approving the ordinance. Mayor Taylor and some of the council members who supported the new ordinance have acknowledged that they have never personally experienced the rideshare service and refuse to do so.

The existing vehicle for hire ordinance was amended to include and regulate rideshare, or transportation network companies (TNCs), in December via a 7-2 City Council vote that left Uber and Lyft, another national rideshare company operating in San Antonio, in limbo for three months until the ordinance takes effect on March 1.

Both companies have continued to operate, despite cease and desist orders from the San Antonio Police Department, while reviewing what the impact of the local ordinance will be to its drivers and its business model, which connects drivers of personal vehicles to customers via a mobile phone application.

“After much consideration, it is clear that these regulations will cripple Uber’s ability to serve drivers and riders in San Antonio. A vote in support of these regulations was a vote against ridesharing, and if the rules remain unchanged, Uber will have no choice but to leave San Antonio,” stated Chris Nakutis, general manager for Uber Texas in the letter sent out early Wednesday evening. “We respectfully ask the city to repeal these burdensome requirements and replace them with smart regulations, like those adopted by Austin, that protect public safety while at the same time fostering technological innovations that enhance transportation options and economic development for the city.”

Click here to download Uber’s letter.

The new ordinance will require TNCs to provide insurance for drivers when the app is turned on, whether they have picked up a passenger or not, and requires driver and vehicle background checks and inspections. The rules would require new drivers to physically submit paperwork and other materials that rideshare representatives say put an undue burden on part-time.

“The Council worked real hard to strike a balance that would focus on public safety,” Mayor Taylor said Wednesday night. “So we had looked forward to Uber operating for a kind of a pilot period and then coming back and reevaluating it a few months on to see how it goes. I hope that they’ll consider doing that.”

Their exit of the market prevents Council from analyzing how the new ordinance would have worked or not worked, she said.

Rideshare representatives agree with checks and inspections, but not to the degree that the local ordinance demands. They also point to the insurance grey area when the app is turned on a car, but has not been assigned to pick up a customer. New products such as the one offered by USAA in Colorado offer an alternative to rideshare company insurance covering that grey area.

“Expensive fees, excessive insurance regulations, and burdensome processes do not enhance public safety; they will eliminate a safe transportation option,” Nakutis stated.

Lyft representatives did not go so far as to say they would cease operation in San Antonio.

“We hope the City Council will revisit these regulations and allow Lyft drivers to continue providing safe, affordable, and friendly rides to people in San Antonio. Unfortunately, without any changes to the law before the March 1st date of compliance, it will be extremely difficult for our peer-to-peer model to operate in the city,” stated Lyft spokesperson Chelsea Wilson in an email.

So, that’s a tentative maybe.

“San Antonio is a city that will lead in technology, innovation, and emerging markets. I look forward to continuing to work with my colleagues and the industry so that we encourage a safe, competitive, and user-friendly private transportation system,” stated District 8 Councilmember Ron Nirenberg in an email, who was on his way back from a Council trip to Washington D.C.

Nirenberg and District 4 Councilmember Rey Saldaña were the only two that voted against the regulations.

One irony noted by many observers is that the anti-rideshare ordinance gained strong support from Mayor Taylor and City Council even though taxi service in the city has been notoriously sub-standard. Late or non-arriving taxis are not unusual, and dispatchers often promise on-time car arrivals that never materialize. Taxi drivers flouting traffic laws and driving aggressively in dense traffic are the norm in the urban core and are not curbed by police.

One fear now is that San Antonio, the largest city in the country to reject all public transportation options other than buses, will now become known as the city where carshare failed and where city officials rejected rideshare along with urban bike lanes and complete streets.

This story was originally published on Wednesday, Feb. 4, 2015. 

*Featured/top image: Rideshare advocates stand in support of Lyft and Uber during a City Council meeting that resulted in approval of strict rideshare regulation in December 2014 that will take effect March 1, 2015. Photo by Iris Dimmick.

Related Stories:

USAA Offers Rideshare Insurance in Colorado 

Commentary: ‘Rideshare’ Needs Rules

Commentary: Does Rideshare Regulation Save Lives?

San Antonio Imposes Strict Rideshare Rules

Graham Weston: A City on the Rise Needs Rideshare

Villarreal Backs Rideshare, Van de Putte Follows Suit

Senior Reporter Iris Dimmick covers public policy pertaining to social issues, ranging from affordable housing and economic disparity to policing reform and mental health. She was the San Antonio Report's...