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Council approves TNC ordinance on 2nd reading

Friday, October 3, 2014 by Tyler Whitson

In an unexpected turn of events, City Council voted Thursday to pass an ordinance legalizing Transportation Network Companies merely on second reading, rather than on the emergency basis that Council Member Chris Riley initially requested.

Council Member Laura Morrison cast the sole opposing vote, as she had on the ordinance’s first reading in last week’s Council meeting.

Riley himself made the final motion, after Council added several amendments to the ordinance.

“I don’t think we want to get final approval on an emergency basis only to find that (the ordinance) just doesn’t work,” Riley said before the vote. He added that it would be worth taking more time to make sure the ordinance lays down a “workable framework.”

The major sticking point appeared to be an amendment that Council Member Kathie Tovo initiated, which requires that TNCs such as Uber and Lyft provide primary commercial coverage for drivers from the time they turn on the associated smartphone app. She initially proposed the amendment at last week’s meeting.

“There could be a problem for a driver who has a personal policy, and their personal policy is expected to try and handle the claim first when they’re engaging in commercial activity,” Tovo said. “They could, in fact, be jeopardizing their personal insurance policy.”

Representatives from both Uber and Lyft expressed concern about the amendment. Lyft Public Policy Manager April Mims said that her company has “never entered into an operating agreement” with such a requirement, adding that it could be extremely costly.

“The driver could be in the vehicle, they could be sitting at home, they could be doing something completely unrelated to providing rides,” Mims said. “What are the implications of setting a precedent where any time an application is on, a TNC is required to provide that primary coverage?”

Mayor Lee Leffingwell pointed out that the revised ordinance includes new language that attempts to “level the playing field,” as he put it, between taxi companies and TNCs.

“The City Manager is directed to seek equity in the treatment of taxis and TNCs with regard to fares charged, dynamic pricing, fleet size, accessibility, insurance, vehicle safety and driver background, among other relevant factors,” the ordinance reads.

Riley said the revised ordinance requires that TNCs, within three months, give customers who require wheelchair-capable vehicles an option to request those when signing up.

Riley also said the ordinance now requires that TNCs provide data broken down by month, though they can still submit it on a quarterly basis.

Morrison raised several questions about the ordinance, such as how it will ensure that drivers pick up riders in traditionally underserved communities, don’t work for more than 12 hours in a 24-hour time period, don’t drive while under the influence of drugs or alcohol, and pay appropriate taxes.

While many of her concerns were addressed, Morrison said that she didn’t feel it was appropriate to move forward. “I don’t know what the emergency is,” she said. “I know that there was some interest in getting Uber legal before (Austin City Limits) because they were going to partner with them, but you know, they are not necessarily going to be legal.”

Before Thursday’s meeting, certain members of the TNC Working Group, which Council created in a May resolution, sent out a letter requesting postponement of the TNC ordinance so they could finish their work. They said they only need to meet two more times in order to make their recommendations.

“The work and recommendations have yet to be completed, and should be allowed to do so,” members wrote. The report, they said, will include “information on best practices, consumer costs, consumer protections, passenger and driver safety” and will “equitably take into account the already stringent regulations required of City of Austin transportation companies.”

TNC Working Group member Eric Goff, who did not sign off on the letter, presented a different perspective. Prefacing that he is a consumer representative and does not represent a TNC or taxi company, he said that Council has been making more progress, more quickly than the stakeholder group has made so far.

“I think the stakeholder group will continue to work, but it’s helpful to see you all make policy cuts,” Goff said. “It’s just logically impossible for the stakeholder group to agree on any one thing, because its composition includes people opposed to TNCs and people who favor TNCs.”

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