UPDATE: On Tuesday the City Council unanimously passed new rules to ease restrictions on local taxi companies.
Despite a two-day taxi strike protesting deregulation last week, San Jose lifted fingerprint and background check requirements for ridesharing services Uber and Lyft. Come Tuesday, the City Council will vote on whether to extend similar treatment to traditional taxi companies.
— Matt Bigler (@mattbigler740) November 11, 2015
The city rolled out a pilot program this past summer that required mobile app-based shuttle drivers (namely Uber and Lyft) to undergo criminal background checks, submit fingerprints and obtain a business license as well as permits to pick up passengers at Mineta San Jose International Airport.
But no Uber or Lyft drivers even applied to work at the airport under those rules, which also required them to disclose vehicle conditions and banned cars more than a decade old.
San Jose has borrowed a regulatory scheme from San Diego, which requires a monthly audit on 1 percent of drivers. Uber and Lyft drivers will still have to undergo background checks, which are required by the California Public Utilities Commission (CPUC).
Cabbies have argued that they face stricter regulations and higher trip fees, which puts them at a competitive disadvantage. In protest of this inequity, last week cab drivers refused to provide rides at the airport, instead driving by people and honking their horns. It was a dubious strategy to win the hearts of people in need of a ride.
To level the playing field between conventional taxis and ridesharing services, the city may simplify car inspections and allow lower fares for rides booked online.
“Ground transportation options and related regulatory frameworks are rapidly evolving,” according to a memo signed by Mayor Sam Liccardo and council members Don Rocha, Raule Peralez, Johnny Khamis and Rose Herrera. “To address that reality the city council gave staff direction to review taxi regulations in Title 6 and 25 in an effort to ‘level the playing field.’ Staff recommendations include removal of vehicle inspections by the police department, issuance of temporary permits, establishment of alternate methods of background checks, reduction in annual company license fees for the taxi industry, and the deregulation of fares booked via mobile app. We support these recommendations, which will create a more cost competitive and less burdensome regulatory framework.”
The proposal is a clear reversal from Mayor Liccardo, who proposed the ridesharing pilot program from last summer. This new proposal, in a sense, levels the playing field by going the opposite direction of what was attempted earlier this year.
Union officials cautioned the city against relaxing too many regulations for airport transportation.
“There is concern by airport officials that this open entry approach will result in a ‘race to the bottom’ for fares and service as more [Uber and Lyft drivers] jump into this young, and as yet not clearly defined, transportation service model,” wrote Ray Mundy, director of the Airport Ground Transportation Association. “After all, it was the lack of quality in taxi and van services that led many airports to develop their own requirements and contracts/conditions for the services that exist today.”
While using private cars driven by their owners may lower fares and expand options for consumers, it’s a questionable model for airports, he said.
“Random driver checks at the airport … is no substitute for having every driver to be thoroughly vetted, exactly like taxi drivers, prior to ever getting behind the wheel of a commercially available passenger vehicle at the airport.”
Uber and Lyft drivers face varied local laws throughout California, as cities and counties grapple with how to regulate the nascent industry.
Pending litigation also threatens to undermine the on-demand industry. A class action lawsuit in California asserts that Uber—a $50 billion company—has misclassified its drivers as independent contractors.
Meanwhile, a federal lawsuit filed by a SoCal taxi company against Uber and the state last week accuses the ride-hailing service of flouting unfair competition laws.
This article has been updated.
More from the San Jose City Council agenda for November 17, 2015:
- Adjusting for inflation, the city will bump up its campaign contribution limits to $600 for council candidates while keeping the limit for mayoral candidates flat at $1,100.
- Taking the lead from Santa Clara County, the city will create a tax break incentive for property owners who lease their land to urban farmers.
- After decades of planning, the city is moving forward with plans to develop an empty parking lot in the heart of Japantown into a hub of housing, shops and a performing arts center.
WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408535.1260