Oklahoma City Traffic Commission Approves Regulating App-Based Ride Services

The proposed update of the city’s “vehicle-for-hire” ordinances will now go to the city council, where it will be reviewed at least three times before official changes are made.

by William Crum, McClatchy News Service / July 22, 2014

Oklahoma City’s Traffic and Transportation Commission on Monday approved new regulations for Uber, Lyft and other app-based ride services.

The vote was 7-0.

The proposed update of the city’s “vehicle-for-hire” ordinances now goes to the city council, where it will be reviewed at least three times before changes are made.

Uber moved into Oklahoma City with its uberX service last fall, and Lyft arrived in the spring.

The services contract with individuals, who agree to use their private vehicles to give rides, much like taxis.

Riders arrange the rides and pay with a smartphone app; in Uber’s case, it retains a percentage of the fare.

The services are part of the growing, Internet-centric “sharing economy” that includes apps for arranging overnight stays in private homes and finding parking when spaces are tight.

Highly regulated traditional taxi and limousine companies have said it’s only fair for the city to regulate the app-based services. So far, those services have operated outside rules governing driver background checks, vehicle safety inspections, and insurance coverage.

In recognition of the business model, the proposed regulations would create a new class of service provided by “transportation network companies” and “transportation network vehicles.” Existing regulations cover services including taxis, limousines and carriages.

The regulations would require that:

Vehicles providing app-based services be inspected for safety by the city.

The vehicles display “trade dress” for identification purposes, similar to the way a taxi has distinctive colors.

The city receive proof of insurance that meets liability requirements.

Drivers undergo background checks at least as stringent as the Oklahoma State Bureau of Investigation checks for taxi and limo drivers.

Companies and their drivers provide only app-based services; “street hails” — when a customer flags down a cab — would be forbidden.

Companies be licensed annually by the city; drivers would be required to get an annual permit.

Pam Thompson of Yellow Cab told commissioners the app-based services have claimed they should be exempt from regulations based on their business model.

She asserted Yellow Cab also is a “digital” transportation service.

As the business evolves, legacy companies want freedom to adjust prices on the fly just as app-based services use “surge prices” when demand is high, she said.

The app-based services give customers fare information on their smartphones.

“If you’re going to exempt them, exempt me,” Thompson told the commission. “I’m just asking for fair.”

M.T. Berry, an assistant city manager, said cab companies’ charges are not regulated but are reviewed and approved, and the city must be notified of changes.

Berry said Uber and Lyft have been allowed to operate unregulated because city officials determined current ordinances are not specific enough to apply to the app-based model.

As for the out-of-state tech companies that contract with local residents to drive, Berry said the city’s ability to enforce its regulations remains to be seen.

“What we can compel are the drivers,” he said.

©2014 The Oklahoman