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."
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."
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.
"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.”
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.