Uber took another step Tuesday toward possibly entering the New Orleans market, although the City Council still has some misgivings about the popular ride service and only a portion of the company’s offerings would be available at first.
The council’s Transportation Committee voted unanimously to send the full council an ordinance that would allow Uber to operate in the city. Yet several members said they believed the proposal before them was still green and that they had unanswered questions about Uber’s operations in other cities. The ordinance will appear on the council agenda without a recommendation from the committee.
The action came after the committee’s second meeting to consider the ordinance, which 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 is operated by individuals who drive their own cars.
Current law prohibits Uber and other ride-sharing services like it from entering the local market. But Mayor Mitch Landrieu’s administration has proposed making at least a segment of Uber’s service available locally. It has said the ordinance would let New Orleans keep up with technological advances in the transportation industry while providing rules to govern those advancements.
“We’re already behind much of the rest of the country in terms of adopting and adapting to the new framework in the for-hire industry, including a lot of our peer cities,” Landrieu senior adviser Ryan Berni told the committee. “We are a city where innovation and technology have to be appreciated and cultivated, but we also have an obligation to put in place a framework where the consumers are protected.”
Council members heard again Tuesday from opponents of Uber who say the company’s entry into the local market would harm existing limousine and taxicab companies and put consumer safety at risk. “It’s hypocritical, preposterous and indeed disgusting that we are entertaining Uber in our market today,” said Tony Makhoul, of Liberty Bell Cab.
On the other side, Uber supporters complained of poor taxicab service and urged the council to make more transportation options available to residents and visitors.
The Uber service allows people who need rides to bypass traditional taxi services and connect directly with drivers by using an application on their mobile phones that, among other things, can tell the rider exactly how close a car is. Riders also use their phones to pay with credit cards, with the company and the driver each taking a cut.
The proposed ordinance, though, focuses exclusively on limousine and luxury car service. It would end the rule that limousines must be reserved for a minimum of three hours and would adjust the rate structure to make shorter trips more practical. Instead of setting a flat hourly rate, it would let limousine companies quote rates to customers based on time, distance and demand. It establishes a price floor for the luxury service to provide for some separation between the luxury vehicles and ordinary taxicabs.
The proposed change does not create a new class of “certificate of public necessity and convenience,” or CPNC, the permit required to operate a taxicab or other for-hire vehicle in New Orleans. Instead, companies like Uber would be required to partner with existing CPNC holders and licensed New Orleans drivers.
Several council members did not appear to be sold on the measure.
Councilman James Gray said the topic needs more discussion so that the council doesn’t end up passing an ordinance that would have to be constantly tweaked. He also challenged Uber executives’ claim that the service would increase transportation options in underserved areas like Gentilly and the Lower 9th Ward.
Councilwoman Nadine Ramsey wondered whether it would be more prudent to wait and see how cities that are further along in drafting or revising regulations related to Uber fare.
Councilwoman Stacy Head, while supportive of the ability to “hail a taxi by smartphone,” said the city should also have the ability to boot, tow or otherwise immobilize vehicles that run afoul of the law. She said it should make sure it has enough inspectors to identify those violators and find a way to charge higher fees to those entering the transportation market to pay for the increased cost of regulating them.
The sharpest criticism came from Councilwoman Susan Guidry, who restated her belief that Uber is using its Black service to get a toehold in the New Orleans market, with the ultimate intention of unleashing its more controversial service UberX, as it has done in other cities.
The low-cost UberX has been the subject of numerous complaints about unlicensed and ill-qualified drivers across the country and also is seen as the greater competitor to taxicabs.
Michael Brinks, of the Greater New Orleans Limousine Association, said he 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, he said.
Brinks said the limousine companies wouldn’t provide cars to Uber because they couldn’t set their rates in a way that ensures they make enough money to pay a salary and benefits to drivers.
“The problem is that we have an ordinance that nobody can work with,” Brinks said. “My best expectation is that the number of cars that would be available to them would be so minimal that it would not work.”
Uber’s Justin Kintz said the company would assist would-be entrepreneurs in buying luxury sedans to add to the stock of vehicles available for hire in New Orleans.
Still, Guidry said the council should not ignore the likelihood that Uber will bring its low-cost service to New Orleans illegally. She suggested drafting a companion ordinance that would establish stiff fines and vehicle immobilization or towing for UberX drivers and would establish other insurance, registration and permitting requirements for Uber itself.
Uber and other ride-sharing services “are the future. They are the present. They’re happening,” Guidry said. “So doesn’t it make more sense to go ahead and create a set of regulations as to the UberX than it does to just say, ‘Y’all are illegal and we’re going to pretend like we’re not noticing you’re coming in everywhere anyway’?”
It’s the UberX service that has drawn the ire of cab drivers across the city, who have argued that the service would represent unfair competition because those drivers wouldn’t be subject to the same standards of operations that cabs are required to follow.
In a attempt to mitigate such criticism and undo what he called “overregulation” of the cab industry, Councilman Jason Williams introduced an ordinance to raise the maximum age of cabs and loosen restrictions on the type of credit card machines drivers can use.