Seattle City Council OKs Mayor-Brokered Deal To Lift Caps On Rideshare Services

Jul 14, 2014

Rideshare services like Uber and Lyft will no longer operate in a state of legal limbo in Seattle. The Seattle City Council on Monday passed a bill, allowing the app-based companies to operate without a driver cap.

Seattle Mayor Ed Murray brought forth the controversial regulation plan last month after meeting with taxi, for-hire and rideshare companies. But some council members say the regulation overlooks an important insurance gap. And taxi companies says there’s not enough room in the market for all these players. 

“Taxis will be out of business, for-hires will be out of business, even Uber or Lyft, or Sidecar drivers cannot make a living out of it,” said Orange Cab’s general manager Belyou Dagnew.

The council also lifted the requirement on in-vehicle cameras for taxis in an effort to level the playing field with rideshare companies. But some say the public interest wasn’t represented at the negotiation table.

Council member Mike O’Brien, who cast the lone vote against the bill, says he worries about the rideshare companies’ gap in insurance coverage.

"The gap exists when a driver is on the app but does not yet have a passenger. The TNCs [Transportation Network Companies, also known as rideshare services] claim this is not commercial activity and so the driver is covered by her/his personal insurance," O'Brien wrote on his blog after the vote." The problem is that insurance companies say that being on the app is commercial activity and that personal insurance does not cover any action a driver takes while active on the app, passenger or no passenger."

“Clearly someone like Uber that’s worth $17 billion could afford to properly insure these vehicles while we figure out what the right policy is going forward, and instead what happened is that risk has been shifted to the public, and I don’t think that’s appropriate,” O’Brien told KPLU.

O’Brien says more needs to be done to work out the kinks in how the industry is regulated, at both the city and state level. In the meantime, Orange Cab says it will do whatever it takes to reel in the new law.