The City Council on Thursday cleared the way for Uber and similar cellphone-based ride services that are popular in other cities to begin operating in New Orleans.
The council voted 4-3 in favor of an ordinance that would allow a premium service called Uber Black to operate luxury vehicles with professional drivers in the city, though not the broader, lower-cost UberX service that makes use of individuals who drive their own cars.
Council members James Gray, Susan Guidry and Nadine Ramsey voted against the measure.
The proposal has been heavily debated for months in the council’s Transportation Committee and drew a crowd to the council chambers Thursday.
Supporters said the ride-sharing service would lead to more and better transportation options for New Orleans residents and visitors. Opponents said it would damage existing limousine and taxicab companies and put consumers’ safety at risk.
“It is clear that technology has changed for for-hire transportation. It is already too late to consider us, New Orleans, an early adopter. But we have the choice whether to fall behind the 8-ball or accept this technological change in the industry,” said Councilman Jared Brossett, who introduced the ordinance at the request of Mayor Mitch Landrieu’s administration. “This is a world-class city; we need world-class assets. This transportation option is one of them.”
Under the ordinance, the city will permit a service that allows people seeking a luxury vehicle to connect directly with limousine drivers by using an application on their cellphones that, among other things, can tell the rider exactly how close a car is and who is driving it. Riders also use their phones to pay with credit cards.
The ordinance is intended to give New Orleans the ability to keep up with technological advances in the transportation industry while setting rules to govern those advances, the administration said.
“This is just a first step. We know that there is a lot more work to do both on taxicab issues and greater for-hire issues,” Landrieu adviser Ryan Berni said. “But we think that this will be a step in the right direction and a sign that the city is open to the innovation and technological advances that are taking place across the country.”
The ordinance focuses exclusively on limousine and luxury-car service. It would remove the requirement that limousines be reserved for a minimum of three hours and would adjust the rate structure to make shorter trips more practical. In doing so, it would allow Uber Black, a premium car service, to enter the New Orleans market.
The city has long banned that service and others like it, but the Landrieu administration has supported making at least a segment of Uber’s service available locally.
Despite the ordinance’s limited focus on luxury vehicles, the overall merits and failings of Uber, an app-based ride-sharing service now operating in 140 cities worldwide, dominated most of the discussion on the measure.
Uber offers both a premium service called Uber Black, staffed by professional drivers, and UberX, a low-cost option operated by individuals who drive their own cars. UberX has been the subject of numerous complaints of unlicensed and ill-qualified drivers across the country.
Though the ordinance clears the way only for Uber Black, opponents have said that Uber will use its Black service to gain entry into the local market and then force UberX in as well, taking advantage of the city’s limited ability to enforce many of its laws.
Opponents urged the city to quickly pass legislation that would regulate what they believe is the inevitabilty of UberX’s operation in New Orleans.
“We are not against Uber per se. We believe that Uber, properly regulated, can fill a need. However, we also know that Uber not regulated properly can be detrimental” to the city, said Edward Sakakeeny, of Signature Livery.
Uber is currently advertising for UberX drivers in New Orleans. Two speakers at Thursday’s meeting said they were able to fill out applications to be drivers for the service.
Gray questioned the city’s ability to enforce its law prohibiting the service if UberX does attempt to begin operating here.
“Uber has been willing again and again to tell other jurisdictions once they get a foothold, ‘Sue me. Regulate me if you think you can. We are going to do what we want to do,’ ” Gray said. “It seems to me that we are obligated to our citizens to take it a lot slower than we seem to be taking it in this particular case.”
For the same reasons, Guidry called the company “greedy” and a “very bad corporate citizen.”
“I think we’re letting ourselves in for a world of hurt here,” she said.
UberX is seen as a competitor to taxicabs. Drivers have said they will be subjected to unfair competition if the company begins operating that service here because Uber wouldn’t be subject to the same standards of operation that cabs are required to follow.
Last year, the council passed a package of laws that, among other things, established a maximum age for cabs operating in New Orleans. Noncompliant cab owners run the risk of losing their CPNCs, the expensive and limited-quantity permits that allow them to operate on city streets.
Hundreds of owners made significant capital investments in newer vehicles and other required equipment with the expectation that entry into the for-hire marketplace would be limited.
Ramsey said she could not support the ordinance because of the impact it might have on taxicabs.
“Putting technology before our local business owners is not something that I want to support,” she said. “My duty and focus is to protect the health, welfare and safety of the public and not to promote a particular business.”
Beyond the concerns about UberX, the ordinance was opposed by the Greater New Orleans Limousine Association, which said it didn’t believe Uber would get enough limousine companies to partner with it to make its Black operation successful.
The association represents more than 90 percent of local limousine companies. It said limousine companies won’t provide cars to Uber because they can’t set their rates in a way that would ensure they make enough money to pay a salary and benefits to drivers.
In an ad in Wednesday’s New Orleans Advocate, the association said the introduction of Uber would mean a drop in revenue that would require either reducing the size of fleets and laying off employees or cutting employee benefits and service to customers.