After fighting hard for an ordinance that would allow it to expand its operations in New Orleans, only to waffle when presented with the final result, Uber now appears ready to bring its lower-tier service into the market.
Shortly after Mayor Mitch Landrieu on Wednesday signed an ordinance setting out regulations for Uber and other ride-hailing services, the company announced it could be up and running in New Orleans soon.
“With the mayor’s signature today, we expect to be able to launch UberX in the very near future, immediately delivering on the promise of expanded economic opportunity and more access to reliable, low-cost rides throughout the city,” said Tom Hayes, Uber’s general manager in New Orleans.
While the regulations will allow other national companies such as Lyft to enter the market and home-grown alternatives to spring up, Uber has been the company at the center of the debate. It first entered the New Orleans market last year with Uber Black, its premium luxury car service, and it has been pushing for regulations that would allow the lower-cost UberX model for months.
For much of that time, Uber has been critical of the rules proposed by the City Council.
It argued that insurance standards were being set too high, opposed drug-testing for new drivers and called for lower fees.
Some but not all of those issues were resolved by the time the City Council voted last week to approve the final version of the ordinance, and spokesmen for both Uber and Lyft had a tepid response to the measure’s passage.
Uber argued against provisions requiring it to allow users or drivers to resolve disputes with the company in court. Meanwhile, Lyft wanted insurance regulations to be delayed until policies specifically tailored to ride-hailing are available.
Both companies said last week that those issues could potentially keep them out of the New Orleans market.
City officials have said they would be able to start processing applications from ride-hailing services as soon as the regulations become law.
“We are stepping out of our comfort zone and leading on a cutting-edge issue,” Councilman Jared Brossett, who drafted the regulations along with Councilwoman Susan Guidry, said in a statement. “This law strikes the right balance. It serves the needs of our citizens and visitors in adding a new high-tech model to complement our traditional for-hire industry. The bottom line is that this will lead to a strengthened transportation environment for all.”
The adoption of the regulations in New Orleans could also open the door for the services to move into Jefferson Parish, where council members are preparing to consider their own rules. Some Jefferson council members have said they were waiting for New Orleans to pass its ordinance before acting on theirs so that they could ensure the two have similar provisions.
The ordinance signed Wednesday by Landrieu allows ride-hailing services to recruit amateur drivers who will use their own vehicles to pick up passengers. Customers will arrange for the rides through a smartphone app.
The services will have to pay $15,000 a year and 50 cents per trip to operate in the city, but in return for those fees they will be allowed to have as many drivers registered with them as they like.
The companies will have to charge passengers at least $3.50 per trip, the same minimum price a passenger must pay for a taxi ride.
So-called “surge pricing,” a model that allows the companies to hike rates during times of high demand, will be allowed except during declared emergencies, such as an approaching hurricane. Ride-hailing companies have used the surge pricing model to encourage more drivers to make themselves available to customers during peak times, but the practice has led to controversy when it has been used during incidents such as blizzards.
The rules call for drivers to get background checks, require up to 25 drivers per company to be drug-tested quarterly and put some limits on the age of vehicles that can be used.
Drivers for the services will not be allowed to pick up passengers who hail them from the street, only those who use the smartphone apps provided by the services.
Taxi drivers and companies fought against the ordinance, arguing that they are being held to higher — and costlier — standards than the new services looking to enter the market. That will put traditional cabs at a disadvantage, they said.
Follow Jeff Adelson on Twitter, @jadelson.