A so-called “Uber ordinance” is up for debate in front of a New Orleans City Council committee Thursday, but the ride-hailing service that has pushed for and is identified with the measure said the proposed regulations and requirements would be too strict to allow it to come into the local market.
The measure would set rules for Uber X, the company’s lower-cost service, to join its already-approved premium brand in the city.
The measure, a combination of proposals from council members Susan Guidry and Jared Brossett, bears many similarities to the rules governing the taxi industry — rules that Uber representatives said are overly restrictive.
Guidry has pushed for higher taxi standards while being highly skeptical of Uber’s operations.
“This is consumer protection legislation that provides for checking backgrounds for the drivers, having the cars inspected, insurance, that type of thing,” she said of the proposed ordinance.
But Uber sees the rules as unduly restrictive.
“We think it was a big step forward to introduce this ordinance and to make a move toward bringing ride-sharing to New Orleans,” Uber New Orleans General Manager Thomas Hayes said. “We have major issues with what is currently there, and, quite frankly, we would not operate if it passes as written.”
Uber is taking issue with requirements regarding insurance coverage that Guidry said are one of the most important parts of the ordinance.
Services like Uber, known in the ordinance as “transportation network services,” typically allow customers to hail a ride using an app and then be picked up by a nonprofessional driver using his own vehicle.
A main issue is the amount of insurance the vehicles would be required to carry. The proposed ordinance says each vehicle would need to have at least $1 million in insurance when carrying passengers and additional coverage for times it is working for the service but not carrying anyone. That would be in addition to the driver’s personal insurance.
“The fact of the matter is that Uber can handle this kind of insurance, and I think when we’re talking about people just occasionally using their own car to act as a vehicle for hire, we’re taking a bigger risk,” Guidry said. “This is not a seasoned driver who does this full time, and so we’re taking a bigger risk and need to have better coverage.”
While the insurance requirements for times when the vehicle has passengers are fine with the company, Hayes said it objects to having to provide more insurance for the vehicles when they’re on duty but empty than is required of taxis.
Hayes also objected to providing information on drivers — such as proof of their license and registration — and their trips because of “proprietary and privacy” concerns. Similar information is provided by taxi companies, but Uber’s objection could stem, at least in part, from concern about tipping off competitors to its strength in the New Orleans market.
Other rules that would make Uber drivers and their vehicles live up to the standards set for taxis, such as having no cars more than seven years old and getting twice-yearly inspections, could shrink the pool of those willing to work for the company, Hayes said.
Niran Gunasekera, vice president of American Federation of State, County and Municipal Employees Local 234, which represents about 830 taxi drivers in the city, said it’s important that Uber be held to the same standards as other for-hire vehicle companies.
“We can’t stop Uber from doing business,” he said. “The next best thing is to come up with regulations. The regulations would help to level the playing field.”
The ordinance proposes Uber pay the city a $15,000 annual fee and sets a 50-cents-per-trip charge. That money would go toward enforcement of the regulations, Guidry said.
The proposed annual fee was sharply reduced to accommodate smaller firms or taxi companies that might want to transform themselves into ride-hailing services, Guidry said. The lower fee would allow more companies to get into the market, she said.
Hayes said Uber does not object to paying a fee, but the two charges combined amount to far too much. “The initial fee is in line with other cities, but when that’s combined with the trip fee it becomes excessive,” he said.
Brossett had sought to put limits on “surge pricing,” spikes in the cost of trips at times of high demand that Uber and similar companies said help encourage more drivers to get on the roads at those times, but the proposal contains no limits except during officially declared emergencies.
Follow Jeff Adelson on Twitter, @jadelson.