Rideshare Revisions Pass: Uber Leaving Town, Lyft on ‘Pause’

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Uber supporters rally outside City Council Chambers. Photo by Iris Dimmick.

Uber supporters rally outside City Council Chambers before City Council's vote that approved rideshare regulations on March 5, 2015. Photo by Iris Dimmick.

City Council approved a revised ‪rideshare‬ ordinance with an 8-2 vote Thursday afternoon, reducing regulation on transportation network companies (TNCs). Uber representatives said after the vote that the TNC, which is currently operating in San Antonio, will be leaving as the new ordinance comes into effect because even with the changes, the insurance and background check requirements are still too onerous to continue to operate within city limits.

Council members Rebecca Viagran (D3) and Ray Lopez (D6) voted against the revision. Council member Rey Saldaña (D4) is traveling and could not vote, but expressed support through a letter.

“They (drivers) will be able to operate in outlying areas of San Antonio – in San Marcos, Austin … and Alamo Heights,” said Chris Nakutis, Uber Texas general manager. “It may mean the end of (Uber) jobs in San Antonio, but not necessarily for (those cities).

“We’re not giving up,” he added, still willing to participate in negotiations, “but from what we’ve seen in December and what we saw today, I don’t know if that’s likely.”

Chris Nakutis, Uber Texas general manager, speaks to media after City Council approved revisions to the TNC ordinance. Uber plans to leave San Antonio regardless. Photo by Iris Dimmick.

Chris Nakutis, Uber Texas general manager, speaks to media after City Council approved revisions to the TNC ordinance. Uber plans to leave San Antonio regardless. Photo by Iris Dimmick.

Nakutis said they’ll be shutting down its mobile application that connects drivers of private vehicles to passengers in San Antonio “sometime between now and April 1,” which is when the new regulations will begin to be enforced.

The original ordinance approved in December with a 7-2 vote is in full effect now, according to the SAPD. These are some of the more cumbersome regulations in Texas – more along the lines of what Houston has set up instead of Austin, the latter is what TNCs would prefer, which has a very low permit fee (under review) and does not require a fingerprint check or drug test.

“This (may) not be the best ordinance for the (TNCs), but this will be the best for San Antonio,” said Councilmember Alan Warrick II (D2).

As rideshare regulations are expected to be discussed during the 2015 Texas state legislative session, it’s likely that Uber doesn’t want to set another regulatory precedent like it did in Houston.

Councilmembers Warrick and Roberto Treviño (D1) are considered to be the driving force behind the revisions. While Warrick was elected to the District 2 seat before the December vote, he didn’t officially take office until after.

Treviño “literally had just stepped up on the dais,” on the day of the vote, he said. “I had to abstain because I didn’t have enough information … today I do.”

It was Treviño that made the motion to change the recommended “Period One” insurance back to its original stipulation that vehicles carry primary insurance, but that the $200,000 excess coverage stipulation should be removed.

This interactive graphic from NOWCastSA compares rideshare ordinances across four major Texas Cities, but does not include the proposed revision ordinance that will be voted on by City Council Thursday. (Again, these are the regulations that go into effect now. The revisions will take effect on April 1, according to the SAPD.)

Taxi drivers are required to submit to a background check and drug test before obtaining an annual $440 permit – among other requirements.

Members of the traditional taxi and limousine industry opposed revisions to the original ordinance – which updates Chapter 33 of City Code for vehicle for hire regulations, to include rules for TNCs – but were satisfied that at least the set of revisions kept the requirement of a 10-point fingerprint background check and primary insurance while the app is turned on in a vehicle.

“I have all the trust in the Police Department and City staff that the rules will be properly enforced and they’re not able to (circumvent) these new rules,” said John Bouloubasis, president of Yellow Cab San Antonio.

It’s still not an even playing field, he said, “We pay heavy fees for permits, they pay a fraction of that.”

Yellow Cab San Antonio President John Bouloubasis shakes hands with Mayor Ivy Taylor after the City Council vote to approve revisions to rideshare regulation. Photo by Iris Dimmick.

Yellow Cab San Antonio President John Bouloubasis shakes hands with Mayor Ivy Taylor after the City Council vote to approve revisions to rideshare regulation. Photo by Iris Dimmick.

It’s possible that the taxi industry will move to change their own regulation in the coming months, he said – as others on City Council have mentioned in previous conversations about Chapter 33, but “we’ll see how it goes.”

City Council was unanimous in the opinion that public safety is top priority, where they differed was mainly on when driver background checks and drug tests take place. The new ordinance allows random drug testing of drivers and requires a 10-point fingerprint check within 14 days of giving their first ride.

“The December ordinance was the product of months of community input, public hearings, and ultimately the recommendations of a task force,” Viagran said. “Eventhough San Antonio residents are already integrating TNCs into their day-to-day lives, City Council can not compromise its role of keeping the city safe.”

“Background checks and 10-print fingerprints prior to operating a vehicle for hire is critical,” she said. “These rules have been put in place to provide a basic level of safety to everyone – without exception.”

Lopez said he was annoyed that the term “disruptive technology” has been used so often to describe rideshare apps.

Mario Robledo,  dispatch manager for Yellow Cab San Antonio, holds signs in protest of the revisions to rideshare regulation. Photo by Iris Dimmick.

Mario Robledo, dispatch manager for Yellow Cab San Antonio (right), holds signs in protest of the revisions to rideshare regulation. Photo by Iris Dimmick.

“This is not disruptive technology. This is simply changing the supply chain,” Lopez said. “It’s innovative, no doubt … (but it’s still) moving people from one place to another and charging them for it.

“If you want to play, you have to pay,” he said.

Despite their disagreements, council members lauded Mayor Ivy Taylor’s efforts to find a compromise.

“This is a dynamic topic that we’re dealing with,” Mayor Taylor said. “(The information) changes from day to day … this Council has done a good job in responding in the most appropriate way possible with public safety as the top priority.”

Mayor Taylor cited USAA’s recent announcement that it will begin to offer rideshare insurance to drivers in Texas as one of many reasons that the review process in September will be so important. City Council and SAPD will analyze how the ordinance has worked – or not worked – in terms of TNC compliance and process efficiency. As more products become available, as more cities and states come up with ways to incorporate rideshare, there will be plenty to talk about – that is, unless there is no rideshare industry in San Antonio to discuss.

“We are gratified that the City Council put consumers first by retaining insurance protections for drivers and passengers of transportation network companies adopted in December,” stated Bo Gilbert, assistant vice president for USAA Government Relations, in a press release. “These insurance protections are based on laws in other locations that the TNCs publicly supported, and which have allowed those companies to operate very successfully. The city showed courage in resisting calls to water down the insurance protections for consumers.”

Rideshare advocates and Uber drivers pick up T-shirts and signs upstairs at Bill Miller's BBQ across Commerce Street from City Council Chambers. Photo by Iris Dimmick.

Rideshare advocates and Uber drivers pick up T-shirts and signs upstairs at Bill Miller’s BBQ across Commerce Street from City Council Chambers. Photo by Iris Dimmick.

Uber’s only rideshare competitor in town, Lyft, had no visible presence at Thursdays meeting, but sent out the following statement:

“While we appreciate the City Council’s efforts, the ordinance passed today still includes burdensome requirements that make it nearly impossible for ridesharing to operate in the city. In contrast to states and major cities across the country, San Antonio’s ridesharing rules create a bureaucratic burden for casual drivers while delivering no new benefits to the public. Lyft has pioneered rigorous safety processes and consumers are embracing this new service. Without significant revisions to the ordinance before implementation, we will be forced to make the difficult decision to pause Lyft’s operations in San Antonio.”

The approved ordinance – which including amendments made today:

  • removes the requirement of having a $200,000 excess coverage during the “coverage gap,” when the rideshare app is on but the driver has not been matched with a customer;
  • clarifies that vehicles will be inspected on a yearly basis;
  • allows for random drug testing rather than mandatory drug testing;
  • grants a 14-day window for drivers to complete a background check issued by the TNC (instead of an advance-of-work, city-reviewed criminal background check that includes fingerprinting);
  • eliminates the annual vehicle permit fee ($160), application fee ($110), and two-year driver permit ($15);
  • establishes a fee to be charged each rideshare company based on the number of its local drivers, ranging from $625 for up to 10 drivers to $25,000 for more than 300 (Uber has more than 1,000 drivers);
  • allows TNCs to vouch for drivers instead of requiring them to appear in person to meet with San Antonio Police Department staff to submit their materials;
  • removes the requirement for drivers to carry a fire extinguisher;
  • removes the requirement for drivers to prove they are proficient in English.

 

*Featured/top image: Uber supporters rally outside City Council Chambers before the vote. Photo by Iris Dimmick. 

Correction: A previous version of this story reported the vote as 7-2. It was 8-2. 

This story was originally published on Thursday, March 5, 2015.

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Rideshare Ordinance Now on Hold, Pending Revisions 

City Crafting Alternative Rideshare Ordinance

MADD: San Antonio is Safer With Rideshare

Not Okay With Just Okay: Rideshare and Innovation in San Antonio

Commentary: ‘Rideshare’ Needs Rules

52 thoughts on “Rideshare Revisions Pass: Uber Leaving Town, Lyft on ‘Pause’

  1. Actually my opinion at this point is to let them go. Some of us were actually advocating for them, but they never really said what parts of the ordinances didn’t work for them. Looking across the three other major cities, apparently those work for them even though the regs are a hodge-podge. When you don’t help us out and just say it’s too restrictive, it’s hard to advocate for you. So fine Uber, see you later. Come back when you’re ready to work with those who want to help you out.

    • As usual, I’m in agreement with you, Randy. I’m a huge advocate for the TNC’s and use them regularly, but now after this little 11th hour stunt… “see ‘ya” is what I have to say. If Lyft sticks around and makes it work, which it can do, then Uber will be back. This is all just a sideshow circus now at this point.

    • It’s called obfuscation. The TNCs and their shills use the term “ridesharing” to make people think this is something other than a high-tech dispatch service for part-time cab drivers.

      • That implies that the populations and city governments of Austin, Dallas, and Houston don’t understand the issues. I don’t feel we needed to concede to their every demand, but from the beginning there has been a decided lack of any negotiation skills displayed by our city leadership. More than the outcome, I’m embarrassed by the process.

        • Not even close. He said we come off as unprogressive with no forward thinking. I said only to people who don’t understand the issues. That has nothing to do with the populations of Austin, Dallas and Houston, but if you think a protracted back and forth negotiation with the TNCs makes a city look bad to outsiders then you right now are refuting your own point by holding up Austin, Dallas, and Houston as examples of how it should have been done.

          Dallas’s laws are not set and they had a huge issue in the beginning when the council tried to sneak a taxi written regulation in without anybody noticing.

          Houston passed regulations that Uber and Lyft rejected and Lyft has “paused operation” (sound familiar) in that city.

          Austin absolutely rolled right over for Uber and Lyft and conceded to every demand, but you just said you wouldn’t want that here.

          So. Given the fact that you obviously have no idea how this issue has been playing out in other Texas cities, what makes you think anybody gives a rat’s ass about how it’s playing out here?

  2. Lyft will stay and happily swallow up the market share left by Uber. Uber will return once USAA’s TNC insurance is up and running, and they give all credit to that great insurance provider while taking pot shots at our awesome city council.

    Thank you Mayor Ivy Taylor and the rest of the City Council, especially my D1 councilman Roberto C. Treviño, for standing up to the TNCs.

    I’m certain TNCs will be a lasting part of our transportation fabric, but only on our terms.

  3. Austin had its own period wandering the desert when their city council and police booted TNCs after their initial introduction. The city eventually came around (after TNCs were operating in SA, I might add), but Austin was certainly not first at the table of innovation either. It’s a complex issue, and at this point I tend to agree with Randy. The TNCs achieved almost all of their goals – the take it or leave it approach is hogwash.

  4. What a shame for San Antonio. Uber has been one of the most useful and inexpensive services I have used while living in Raleigh, NC.

  5. A shit ton of people from out of town used über at PaxSouth just wait till they hear about this.. Dumb San Antonio just dumb.

  6. If Yellow Cab were truly concerned about public safety, they’d at least have toilet seat cover dispensers for the back seats of their fleet.

  7. Disappointing doesn’t even begin to describe the way the city handled this entire issue. What’s actually worse is the ignorance and general fear-mongering that our ex-police chief and certain members of our city council (incl. the interim Mayor) spread about ride-sharing in general. Not a single one of them used the service or sought to fully understand the implications that a decision like this would have on how the city is perceived on a national scale.

    • No problem, from second paragraph: “Council members Rebecca Viagran (D3) and Ray Lopez (D6) voted against the revision. Council member Rey Saldaña (D4) is traveling and could not vote, but expressed support through a letter.”

      The rest of the council members, including the mayor, voted in favor of the revisions.

  8. Michael Cirlos III this is the “regulations that keep cool shit from happening here” that I was talking about.

  9. A company with more financial backing than the taxi company wants to complain about cost? That’s like a millionaire asking for a hand out. Goodbye..!

  10. Eventually the city will come around. They won’t have a choice. The steady March to the future can’t be stopped by a few small minded people. Market disruptions happen all the time. I suspect there will be some fallout in the council elections. Perhaps some closer looks at who gave money to whom.

  11. San Antonio is progressive enough to know that this is not good business- to not insure someone or to give criminals a job that’s easier to get than the rest. San Antonio is being responsible, not lame. Portland is the same way.

  12. While I agree that ride sharing is good and progressive and I’m for it, and use it often, many of you don’t realize that these companies aren’t covering them if they have an accident while the app is on!! I work at usaa and have to tell people (this is my opinion and not necessarily usaa’s), sorry your company sucks and doesn’t provide commercial coverage until you get a passenger. Usaa is actually starting to slowly rollout an endorsement for this gap in coverage because these TNC’s don’t care about their contractors’ safety enough to do so.

  13. In the past 24 hours, I’ve witnessed two white “San Antonio Taxis” run red lights after stopping and then proceeding on purpose, through the intersection, on red. Have you gotten a look at our “real” taxi drivers lately? Do you really want to get into a vehicle with people who look like thugs (personal grooming and dress)? If the City makes Uber go, at the very least they need to create a dress code so we will look like we may be worth the extra cost! Other cities do it. and require cab inspection for cleanliness daily before they can pick up airport passengers. We should too!

  14. Its unfair to cab companies to not impose the same regulations… Both provide a ride. Both charge fees. There are no substantial difference. The law is void to cab companies if it is not imposed on similar companies. Moreover, when you the rider gets in a severe accident and there is basic insurance on the vehicle, you won’t be able Rosie any claim for injuries. That is why we have those policies in place…

  15. UBER IS NOT LEAVING

    This was just released by UBER…
    Have no concerns about picking up riders outside of City of San Antonio jurisdiction. Cities like Alamo Heights, Terrell Hills, Leon Valley and all other suburban jurisdictions of Bexar County are not adversely impacted by this ordinance

  16. There seems more to this story than meets the eye.

    Uber may be pulling out of San Antonio because it views this as a mid-major market, one where they can afford to leave and return to later. I just don’t see substantive differences in the City Council’s “”revised” rules compared to those of the other major Texas cities. Uber adhered to the much more stringent regulations of NYC, and the company is working hard to comply with similar laws as ours in hipster cities like Seattle and Portland.

    Could it be Uber is sending a message to cities like San Antonio, those without alternative transportation networks, that it will “up the stakes” in these places to clear out the competition?

  17. City Council and mayoral election May 9, 2015. I normally don’t bother to vote in the local elections, but I will this year.

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