A proposed Houston ordinance could legalize hundreds of for-hire drivers providing rides through smartphone applications, but would require those drivers meet the same permitting and safety requirements as taxicab and limousine drivers already regulated by the city.
Under the proposal by the city's Department of Administrative and Regulatory Affairs, the ride-sharing services would have to meet the same standards for fingerprint-based background checks and vehicle inspections already required of cab and limo drivers.
Other city and state governments have allowed the companies to do their own record checks based on Social Security numbers, or loosened inspection rules.
The proposed ordinance also would set fees for the new services based on revenues, allow all for-hire drivers to charge for no shows, mandate all companies accept credit cards, eliminate a 30-minute wait requirement for "pre-arranged" pick-ups, and drop a $70 minimum limo fare originally designed to shield the taxicab industry.
"We see this as leveling the playing field," said Tina Paez, head of the city's regulatory affairs department. "Uber and Lyft will probably tell you we're overreaching. If there is some compromise that council makes, I hope it's one that still works for passengers in terms of public safety."
The proposal will be reviewed Tuesday by a joint council committee on public safety and transportation.
The proposed changes have been the focus of a bitter fight between taxi and limousine services and emerging companies that connect riders to willing drivers via smartphone applications.
A federal judge Monday declined to issue a temporary restraining order sought by Houston and San Antonio cab companies hoping to block ride-sharing services like Lyft and Uber from competing with them for fares.
"We are talking about enforcing the law as it exists today," Yellow Cab attorney Marty Hill told U.S. District Judge Vanessa Gilmore.
Houston's existing ordinance does not allow Uber or Lyft to collect payments for rides in the city. Both had offered their services to Houstonians for free until last week, when Uber said it would charge riders. Both already have been ticketed for charging fares, and city officials said they would continue sting operations to ticket drivers from either company if they take money for services.
Technology and law
Attorney Barret Reasoner, who represents Uber, countered that there was disagreement over how current laws and regulations impact the smartphone-based companies and stressed that cities already were looking at how to resolve any concerns.
"We have in Houston over 350 drivers who are using the Uber application and in San Antonio over 150," he said. "I think technology has gotten ahead of the law. It happens all the time."
Gilmore declined to issue the temporary restraining order but set a July 15 date for an injunction hearing, which could result in stopping the smartphone-based companies from operating or give city ordinances a chance to catch up with the technology.
Yellow Cab lobbyist Cindy Clifford said technological advancement does not preclude businesses from following existing law, nor should it weaken standards set in the proposed ordinance.
Making a living
The city, she said, should set a cap on the number of licensed drivers and keep the $70 minimum limo fare intact.
"If you flood the market with drivers, it will be very hard for anyone to make a decent living," Clifford said.
For example, she said, existing rules require cab and limousine companies to serve all neighborhoods at all hours, regardless of profit margins and overhead costs. Under the proposed ordinance, she said it appears Uber and Lyft could ignore low-profit calls.
"A lot of our business is taking people to the grocery store, to their doctor's appointment," Clifford said. "They're not always lucrative trips. That's balanced by the fact drivers have access to other trips."
Spokespersons for both Uber and Lyft called the proposal a starting point in the regulatory discussion but declined to comment on the proposed ordinance in detail, saying their companies still were reviewing the 100-plus-page draft.
© 2014 the Houston Chronicle