San Antonio Imposes Strict Rideshare Rules

Fast-growing rideshare services in San Antonio could quickly disappear from the urban landscape in 2015 after City Council voted 7-2 Thursday to impose some of the strictest regulations in the nation and protect the city’s entrenched taxi industry.

Sighs of relief and disappointment filled Council chambers as the long, acrimonious debate came to a close after hours of debate and citizen comment.

District 4 Councilmember Rey Saldaña and District 8 Councilmember Ron Nirenberg were the only members who voted to oppose the ordinance, each citing the need for more time to review the regulations and last-minute amendments. District 1 Councilmember Roberto Treviño, appointed just hours before the vote, abstained. District 7 Councilmember Cris Medina, in attendance earlier, was absent during the rideshare vote.

A vote to postpone the vote on the proposed rules, initiated by Nirenberg, failed on a 7-3 vote.

Beginning March 1, 2015, drivers for ride share companies, or Transportation Network Companies (TNCs), will be required to have a 10-fingerprint background check, drug test, a review of their driving record, an initial and yearly vehicle inspection (including random checks), and proof of personal insurance. Documentation of these requirements will have to be presented to City staff by the driver – in person – before a driver and vehicle permit is issued for $175 each. The process will likely take about two weeks, according to City staff.

“It’s a victory for the riding public and the consumers,” said John Bouloubasis, president of Yellow Cab of San Antonio, who represented the traditional taxi cab industry on the ordinance task force. “Remember, these companies came in here operating illegally. Now there’s a regulatory framework in place for them to follow.”

Rideshare representatives said they are not opposed to regulations, but San Antonio’s may be too onerous for many part-time drivers that TNCs rely on to provide almost round-the-clock service. TNCs must also provide $200,000 in excess liability to cover costs of accidents that exceed the driver’s policy limits when waiting for a fare.

Despite these amendments, “This is (one of) the most regulatory burdensome ordinance that we’ve ever come across,” said Lyft Public Policy Manager April Mims, while taxi drivers applauded the decision outside of chambers. “That’s why the cab and limo industries are so excited right now, because they’ve now authorized a taxi ordinance for a completely different platform.”

The approved amendments put forth by District 3 Councilmember Rebecca Viagran include removing requirements of a defensive driver training course and passing physical and eye exams – last-minute concessions that apparently won over other Council members who might have otherwise opposed the ordinance or voted for a delay.

“The cab industry is still going to do that, because that’s what we feel is required to have the best drivers out there,” Bouloubasis said. “If the TNCs choose not to do that … that’s their business decision.”

Uber and Lyft representatives said they will begin reviewing the regulations and amendments to see if they will continue to operate in San Antonio. In six months, Council will review the ordinance’s performance.

“We need to actually digest the amendments, this is the first we’re hearing of them,” said Uber Dallas General Manager Leandre Johns. “We’ll have to decide how to go forward from there.”

Both TNCs have been operating in San Antonio for about nine months, despite receiving cease and desist letters from Police Chief William McManus, who sought unsuccessfully to shut down the rideshare services while an updated vehicle-for-hire ordinance was studied and implemented. McManus argued successfully to impose tougher regulations than those recommended by the City’s task force.

Sixty citizens signed up to talk during Thursday’s packed meeting, passionately arguing for and against adoption of the rules. When asked to stand in support of rideshare, a majority of the audience stood up.

Dallas City Council passed an ordinance, 13-2 on Wednesday, accommodating rideshare into its vehicle-for-hire ordinance. Lyft and Uber representatives have lauded Dallas for striking a fair balance between ensuring public safety and allowing entry into the market.

Click here to download Dallas’ draft ordinance.

UPDATED at 6:33 p.m.

During the two-hour Citizens to be Heard session, drivers, customers, and administrators from both TNCs and traditional vehicle-for-hire companies advocated passionately for their causes. From the Uber driver who is a U.S. Air Force veteran trying to support his child with a disability and complicated medical schedule to the taxi driver who has driven around this city for 20 years, the vehicle-for-hire industry provides livelihoods for thousands of San Antonians, and thousands more rely on their services.

Each Council member – except for District 7 Councilmember Cris Medina, who was absent from the vote – said they agreed that rideshare should be allowed to operate in San Antonio. The difference of opinion comes when deciding which regulations actually improve public safety and which rules from the status quo simply provide a barrier for new business.

The following are comments made from Council members and the mayor to further describe their position on this contentious issue:

Mayor Ivy Taylor

“This for some reason is being used as a litmus test regarding our City’s progress, but I’m not quite sure about what’s being measured,” Taylor said, reading from a prepared statement.

Taylor added that the ordinance does not try to shut down or discourage TNCs from operating in San Antonio. “Today, we are simply voting on our city’s attempt to provide adequate regulation on a multibillion-dollar industry that seems poised to reshape the future even as it continues to reinvent itself.

“If we find that any ordinances passed today is unnecessarily restrictive or too lax, a six-month or 12-month review process is built-in, and we’ll have the opportunity to make changes after we observe how the (rideshare) industry operates here in San Antonio – officially and legally,” she added, hoping that a report reveals a thriving rideshare industry. “It’s not my job as mayor or the job of this Council to ensure that TNCs can operate profitably in our city. It is our job to at least try to make sure that they operate safely.”

District 3 Councilmember Rebecca Viagran

Viagran, chair of the Public Safety Subcommittee, verified with Chief McManus that he was comfortable with the ordinance and amendments as presented on Thursday. He agreed, but added that he was not comfortable with the provision that TNCs would attest the the requirement documentation since they’ve ignored the ordinance and cease and desist orders so far. Hence the requirement that drivers show up in person to provide required documentation.

“Government’s first priority is public safety,” Viagran said. “When a passenger gets into a vehicle for hire in our city, they assume that the City has made sure (rides are safe).”

Viagran said she believes City Council has agreed on an ordinance that strikes a balance between public safety and fair market entry. “Some may say that the rules and regulations we’ve put forward today will harm innovation. But I am confident in the entrepreneurs of this great nation that we will have others similar to them (Lyft and Uber) willing to follow our ordinances and come in and operate in San Antonio legally.”

District 8 Councilmember Ron Nirenberg

Nirenberg summarized his position and reaction to the rideshare vote in a statement released Thursday evening:

“Today, I disagreed with and voted to postpone an ordinance that ostensibly integrated new transportation options, but effectively creates an environment that stifles innovation. By increasing the cost of doing business past what public safety requires, governments threaten competition in new and evolving markets, which is counterproductive to consumer choice and safety. The entry of transportation networking companies (TNCs) poses an enormous opportunity for our city to accelerate progress over parochialism, and innovation over market intervention. I believe that we should work together to revise the provisions that were adopted today in order to promote a vibrant and safe private transportation industry in San Antonio.”

District 4 Councilmember Rey Saldaña

“I’m never a big fan of delaying a vote,” Saldaña said. “Usually it means you either haven’t done your homework or you have (an agenda).”

This time, however, Council simply isn’t ready to pass an ordinance that at least one of its members – District 1’s Treviño – hasn’t read and includes last-minute amendments.

“We lose nothing by letting both parties vet this further,” he said. “Let’s get the best policy … and I think the best policy would take some more time.”

District 9 Councilmember Joe Krier

Krier said he trusted McManus’ judgment as a seasoned public safety officer and the advice from USAA as the insurance agency that approved of the insurance structure in the ordinance.

“I have complete confidence in you,” he said, also commending Viagran and the work of the Public Saftey Committee. “I don’t want to wake up down the road with some horrendous lawsuit or some horrendous accident and someone standing (there) saying, ‘Why in the world did you people on City Council not have protections in place that might have prevented this from happening?’”

District 10 Councilmember Mike Gallagher

Gallagher kept his comments very brief. He found the process of coming up with this ordinance to be very transparent and thorough.

“We can not afford to delay it,” he said. “The idea of having a loved one out there being picked up by this vehicle … I want to know that that driver is qualified … I want people playing by the rules.”

District 5 Councilmember Shirley Gonzales

“We’ve made a pretty good effort to try to accommodate everybody by having the task force,” Gonzales said. “I typically wouldn’t be opposed to delaying if I felt we had not vetted it out thoroughly, but I do believe that this has been.”

There’s no reason the TNCs would stop operating if the vote was delayed, she said. Small businesses have to bring themselves up to compliance all the time – costing them thousands of dollars and closures.

“We do this to our own companies and businesses … these are multibillion-dollar companies that we’re asking to comply with what I believe are simple regulations,” she said.

District 2 Councilmember Keith Toney

Toney pointed out the disparities between the regulations of taxi companies and TNCs included in the new rules. For example: Taxis pay $440 per vehicle permit and TNCs will pay $160. There is also a cap on the number of taxi permits.

“I’m not averse to you being here,” he said, addressing TNC representatives. “It doesn’t help your case to ignore a cease and desist order from our police department.”

He was not confident that more time would mean Lyft and Uber would have a “cathartic revelation” to follow an ordinance.

District 6 Councilmember Ray Lopez

Lopez asked Leandre Johns of Uber directly if they would comply with the cease and desist order between now and the new regulation.

Johns said that would be a decision they would have to come to after digesting the information.

“I’ll take that as a probably,” Lopez said.

District 1 Councilmember Roberto Treviño

“Stepping into this role just today and seeing these new amendments … I have to ask we give this a little more thought,” he said, asking Council members for at least a week to review.

Future District 2 Councilmember Alan Warrick

Warrick was the last citizen to sign up to speak on Thursday. He briefly addressed his future colleagues from the podium.

“I look forward to working with you on this,” he said. “I can add some input and move this forward. I’m definitely in the camp of moving toward (having) Uber and Lyft in the city … regulation needs to happen, but I think these are too stringent … I would like to be at the table when the decision is made.”

*Featured/top image: Rideshare advocates (right) and taxi industry defenders (left) chant opposing slogans in front of City Council Chambers Thursday morning. Photo by Iris Dimmick.

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