New rules for ride-hailing companies advance

A City Council bill requiring drivers of both taxis and ride-hailing companies to obtain “private transportation services” certificates appears to be gathering support.

The Budget Committee advanced a new draft of Bill 36 on Wednesday. The measure will be heard June 1 by the full Council for the second of three required votes.

Under the bill, drivers for ride-hailing companies, also known as transportation network companies or TNCs, would pay the same $25 for new private transportation services certificates, and $10 for duplicates, that taxi drivers now pay. They would be able to obtain the certificates only after clearing national criminal background checks going back seven years.

Additionally, TNC drivers or their companies would need to carry primary motor vehicle liability insurance providing at least $1 million for death, bodily injury or property damage per accident. That’s what is required statewide under a bill passed by the Legislature this session that is awaiting consideration by Gov. David Ige.

(Taxicab drivers now also pay $50 annually for a taxicab license. They would still need to do that, although ride-hailing companies would not.)

The proliferation of ride-hailing companies like Uber and Lyft has spurred the Council to come up with a way to regulate them. Taxi companies say ride-hailing companies provide the same services they do, but have been allowed to bypass traditional forms of regulation such as the certificate process. But officials and drivers with the ride-hailing companies insist they provide a completely different business model that should not be regulated in the same manner.

Budget Chairwoman Ann Kobayashi told committee members the main goal is “to ensure health and well-being of … passengers and to ensure drivers operate in a safe manner.”

Most taxi companies and their drivers testified in support of the bill.

Tabatha Chow, Uber’s local operations manager, said her company opposes the bill in its current form, but feels it creates a basis for legislation it could eventually support. A key change the company wants is the ability to conduct its own background checks, as it now does, and submit them to the city.

The process takes Uber less than a week typically, and could take months, Chow said. About 60 percent of Uber drivers drive less than seven hours a week, so “they’ll usually not wait around an extended period of time to be certified.”

Kobayashi appeared amenable to the change, noting that she did not want to put an extra burden on the city’s Department of Customer Services.

Timothy Burr Jr., Lyft senior manager of public policy, submitted written testimony also voicing opposition to the bill, citing a cumbersome process that constitutes “significant barriers to entry.”

City Customer Services Director Sheri Kajiwara said the Caldwell administration supports the bill with several changes, including raising the certificate fees to $100 for new ones and $50 for duplicates.

Kajiwara said it’s too easy for drivers to get replacement certificates, leading some to sell copies of certificates fraudulently.

Generally, she said, “it is my belief that both TNCs and taxi companies should be mirrored in as many ways as possible.”

Meanwhile, Bill 85 (2015), which places TNCs in the same category as taxis, was deferred in committee but is expected to be heard again next month.