Spokane eyes tougher regulations for Uber, Lyft after outcry from cab companies

After years of allowing ride-hailing services Lyft and Uber to operate on Spokane streets with fewer regulations than traditional taxis, city lawmakers say they’ll seek tighter controls when the companies’ new contracts expire at the end of 2017.

“It’s a matter of competitive fairness,” City Councilman Mike Fagan said.

Cab drivers, who operate under regulations so specific they include dress code and behavior, have been lobbying the Spokane City Council for years to subject those taking fares from smartphone apps to the same scrutiny. The city has responded with short-term agreements made directly with the two most popular ride-hailing companies, the most recent of which were signed last week, while waiting for the state Legislature to act.

The panel isn’t interested in waiting anymore, City Council President Ben Stuckart said.

“We’ve had one-off (agreements), when there was nothing in place,” Stuckart said. “It’s time to get beyond that.”

The agreements signed by the City Council and negotiated separately with each company charge Lyft $12,500 to operate in Spokane through the end of this year. Rasier, the company that operates Uber’s ride-hailing service, will pay $10,000 over the same period. The agreements leave in place most of the regulations and required insurance coverage that have existed since 2014. The contracts also continue to exempt Uber and Lyft drivers from a section of the municipal code that applies to taxi drivers and imposes more stringent requirements on vehicle inspections, licensing, behavior and background checks.

Fagan cast the lone council vote against the contracts. He believes the city needs agreements with the companies, but with tougher enforcement than the “self-policing” system that is currently in place. He cited complaints from the taxi companies that ride-hailing drivers are advertising in local bars and parking in zones reserved for cabs.

“How good is that agreement when no one is paying any attention to it?” Fagan said.

Both companies issued statements, in response to questions for this story, indicating a willingness to work with City Hall on negotiating new rules.

The Washington Legislature has been mulling the regulation of ride-hailing firms as “transportation network companies,” but those efforts stalled in the House of Representatives this year. Lyft and Uber favor the statewide regulatory framework, arguing it will make it easier for their drivers to ferry passengers across city limits and county lines. Trade groups have argued the state’s regulatory scheme for ride-hailing doesn’t go far enough.

A fare system

On Friday afternoon, Luis Castillo was waiting for a green light at Spokane International Airport.

The former commercial truck driver sat second in a line of seven minivans, all representing different taxi companies, hoping for a fare flying in for a weekend conference downtown. Castillo, and his colleagues behind the wheel, surmised their waits were being made longer by ride-hailing contractors pulling in and picking up smartphone-wielding passengers.

“I’m struggling. I’m not putting the bacon on the table like I was when I first started,” said Castillo, who’s been driving cabs in Spokane for eight years, two as owner of Bull Dog Cabs.

Castillo said a significant portion of his business comes from fares at Spokane International Airport, which charges a $1 flat fee for any ground transportation shuttling passengers off-site. That includes both taxis and Lyft and Uber, though taxis are outfitted with a transponder while ride-hailing programs are billed through a conglomerate that tracks by satellite when fares are picked up and dropped off, said Todd Woodard, spokesman for the airport.

Uber and Lyft operate under agreements with the airport that are separate from their contract with the city. Stuckart said the airport provided a good model for regulation of the nascent industry and would provide guidance as Spokane looks to impose new rules within city limits. But Castillo and colleagues said the system illustrates the unfairness that is present all over town.

“They come here and take all our fares,” Castillo said, pointing to the end of the queue. “If Uber wasn’t here, it would be quick.”

Uber’s and Lyft’s fares are the result of the less restrictive regulations, which threaten the safety of passengers, Castillo said. While cab drivers must attain a $55 for-hire license through the city that includes a drug test, criminal background check and physical fitness test, the city’s agreements with Lyft and Uber require only the background check, performed by a third party.

As Castillo waited for a fare Friday, 80-year-old Louis Stroud loitered in the cellphone waiting area on the other side of the airport’s parking lot, hoping for a buzz on his smartphone indicating an Uber fare was ready.

The Post Falls resident, who took up driving for Uber about a year ago after spending 21 years as a school bus mechanic in Alaska, said he’d be willing to get an additional license if the city asked him to, though he “might grumble a bit.” But he said the taxi drivers shouldn’t force drivers like him out of the industry.

“You can’t go and stop a builder from doing his job, just because another guy is doing it somewhere else,” Stroud said. He believed there should be a level playing field for himself and the traditional cab model.

Dillon Lamb, who was also waiting for fares in the cellphone lot with Uber, said the company provided a cheaper alternative to cabs, which some people may not want to take.

“A lot of people rely on us,” Lamb said. “It’s the more economical way of getting around these days.”

Castillo said all he wants is for ride-hailing drivers to play by the same rules. He estimates he’ll be looking for a new job in six months if they don’t change.

“If we can regulate them, if we can get them to get licenses and meters,” he said. “Get in the ring, you know, with the same guys here.”

Waiting on Olympia?

Trade groups, like the Evergreen State Taxi Association, have argued the state’s regulatory scheme for ride-hailing doesn’t go far enough, and the proposed $5,000 fee – plus a 10-cent surcharge on each fare – to operate in Washington is a pittance for the companies compared to what smaller taxi firms must pay in fees and taxes.

“I think organized labor has gotten more strongly opposed to all aspects of the shared economy, including ride-share,” said state Sen. Michael Baumgartner, R-Spokane, who voted for the state regulatory scheme this year, using an alternative term for ride-hailing.

The Senate sent their proposal to the House’s Labor & Workplace Standards Committee, where it received a hearing and languished until session’s end. Rep. Marcus Riccelli, D-Spokane, said he’s been approached by the City Council about their efforts to regulate the industry at the city level and didn’t blame them for doing so, based on the Legislature’s historic impasse on traditionally bipartisan issues, including the state’s capital budget.

“In the current state where we cannot pass what has been bipartisan for years, to wait on us to pass something right now is probably not a good idea,” Riccelli said.

Fagan noted there is precedent for the current City Council to act when guidance from the Washington Legislature seems fleeting. The city passed a sick and safe leave ordinance, over the opposition of Fagan and Mayor David Condon, requiring businesses to offer paid time off for illnesses that include family members. Voters passed a statewide policy at the ballot box in November. The council plans to repeal its own law at the end of 2017 and require businesses to adhere to the state regulation.

Stuckart said it would be a tight window to pass new regulations in time for the contracts expiring at the end of this year, but he believed it was realistic.

“I hope so. If people work hard, and do their jobs, anything’s possible,” Stuckart said.

Regulation breakdown