Seeking to boost the number of for-hire limousine drivers in the city and citing a need to make it easier for aspiring entrepreneurs to enter the industry, the City Council voted Thursday to eliminate a requirement that someone seeking a license to operate luxury vehicles in New Orleans must have at least two stretch limousines.
In effect, the measure also will be another step easing the way in New Orleans for Uber, a company that has stirred controversy nationally by challenging the established taxi and limousine industries with a service that connects drivers and passengers via smartphone.
Council President Stacy Head called the two-limousine requirement an “artificial and unreasonable barrier” that does not accommodate the level of demand from the city’s residents and visitors for for-hire limousine service.
“We still cannot in certain parts of the city command taxis at certain times and in certain neighborhoods, particularly if you are not in the downtown area,” Head said.
The council approved the change 6-0, with Councilman James Gray absent.
The move was opposed by the Greater New Orleans Limousine Association, which complained that the matter was not first taken up in a committee before making its way to the full council. The association also said it had been promised that no changes would be made to the section of the city code that governs for-hire vehicles unless a complete overhaul of the section was in the works, in which case the association would be invited to participate in the process of drafting the new rules.
“There seems to be a transparency issue here,” Angelina Christina, an attorney for the association, said. “Representations have been made to my clients that any changes to this particular ordinance that affect their livelihood would be known to them before it was brought in front of you.”
Christina urged the council to table the matter so that it could be heard in committee.
Councilman Jared Brossett, who chairs the council’s Transportation Committee, acknowledged that the matter did not go before the committee as an independent item. But he said the idea was vetted in “lengthy meetings” over the summer as the council considered other changes to the for-hire vehicle rules.
What’s more, Brossett said, council rules do not require that matters proceed through committee before being heard by the full body.
Thursday’s changes are related to the recent passage of an ordinance that cleared the way for Uber and similar cellphone-based ride services that are popular in other cities to begin operating in New Orleans.
At the request of Mayor Mitch Landrieu’s administration, the council in September voted 4-3 in favor of the ordinance, which removed the requirement that limousines be reserved for a minimum of three hours and also adjusted the rate structure to make shorter trips more practical. The changes effectively allowed Uber Black, a premium car service, to enter the New Orleans market.
Before the change, that service and others like it were banned in New Orleans. But the Landrieu administration has supported making at least a segment of such services available locally.
The administration said it supports the most recent amendment.
“This action is consistent with the industry reforms we’ve put forward and provides customers with more choices when hiring for-hire vehicles,” Landrieu spokeswoman Garnesha Crawford said. “Having good, reliable transportation options is important for our residents, businesses and visitors. We are committed to creating the best for-hire industry in the country.”
Only Uber Black, staffed by professional drivers, is available locally. But critics of the service have continuously raised concerns that Uber would use its Black service to gain entry into the local market and then force in UberX, a low-cost option operated by individuals who drive their own cars. The company has been accused of using similar tactics in several cities and declined to assure the City Council in meetings over the summer that it wouldn’t try the same thing here.
UberX has been the subject of numerous complaints of unlicensed and ill-qualified drivers across the country. Meanwhile, an Uber executive recently came under fire for suggesting the company dig up dirt on journalists who were critical of its practices.
The 5-year-old service operates in more than 200 cities around the world. It’s now valued at $40 billion after closing a $1.2 billion round of financing on Thursday.
In New Orleans, Uber and other mobile, ride-hailing services allow people seeking a luxury vehicle to connect directly with limousine drivers by using an app on their cellphones that, among other things, can tell the customer how close a car is and who is driving it. Riders also use their phones to pay with credit cards.
The limousines must be operated by holders of Certificates of Public Necessity and Convenience, the permits required to operate a taxicab or other for-hire vehicle in New Orleans. The city began accepting new CPNC applications for limousines in October.
Current law says that “all applicants for (CPNCs) for limousines must have proof of title or leasing agreements for at least two stretch limousines.” The law also requires that the limousines be no more than five years older than the calendar year of the initial application.
Stretch limousines are defined in the ordinance as “luxurious for-hire vehicles” that can seat six to nine passengers, including the driver. For the purposes of CPNCs, luxury sedans, sport utility vehicles, passenger vans and mini-buses are not considered stretch limousines.
Head said the number of applicants has not been high enough to satisfy the city’s demand.
In its most recent call for CPNC applicants, the city received five requests for limousine CPNCs. That compares with 573 requests for CPNCs to operate pedicabs, wheelchair-accessible taxicabs and other vehicles.
In discussions over the summer, Head said, the two-car requirement was ultimately left in place as an initial accommodation to existing limousine operators because they were going to face new competition.
“Frankly, this is a competitive advantage that was given to currently operating limousine companies to let them get a head start and really open up the market for them to really get into the transportation app market first,” Head said. “They had that ability. The public’s demand has not been satiated.”
Christina said the limousine companies have been working to develop apps and purchase vehicles to meet the demand but that they need more time to do so because of the financial obligations, including the cost of additional vehicles and insurance, that come with expanding service.
“Since September, the members of GNOLA have made huge capital outlays, done all kinds of investment and investigation into an app-based program and are trying to move on with their business,” Christina said. “I understand the need for competition. My clients have no problem with competition. What we want, however, is fair competition. We want the opportunity to be able to do what’s best for the city.”