Months after giving Uber and similar ride-hailing services a toehold in New Orleans, the City Council could consider an ordinance that would allow those companies to operate a wider range of services.
Councilwoman Susan Guidry, one of Uber’s most vocal critics on the council, introduced the ordinance Thursday.
She said she drafted it as a proactive move.
History has shown that Uber will move into whatever markets it wants, regardless of whether it’s is authorized to do so, and crafting a set of regulations could provide a way to hold them to a higher standard, Guidry said Friday.
“We needed to make a decision. Did we want, as a city, to not allow Uber X? If that were the case we’d need a very, very strong penalty, because where the penalties are not strong Uber has just been coming in with Uber X,” Guidry said, referring to the nonpremium version of Uber’s service which is not permitted under the city’s present regulations.
“Or we needed to regulate Uber X to provide the consumer protections that are needed based on how we have seen them operating elsewhere.”
Guidry’s ordinance would permit Uber and similar companies, such as Lyft and Sidecar, to operate in the city, allowing customers to hail nonprofessional drivers using their own vehicles through smartphone apps.
Uber is already moving into the New Orleans market with a service known as Uber Black, which provides luxury cars and professional drivers. The council approved that service last year after fierce debate, and over the objections of Guidry and two other council members; the city is preparing to award 150 permits for those drivers.
Uber X, on the other hand, relies on individuals driving their own vehicles and is more closely aligned with the general public’s idea of how the service operates.
Guidry said her proposal is, in part, designed to ensure that when those services — which she said already are recruiting in the area — do come into the market, they do so with the proper regulations.
She also said additional options are needed to provide better service to those looking to hire rides in New Orleans.
“There’s a good chance that it would come in regulated or not,” Guidry said.
The use of apps is the central distinction between a service like Uber — called a transportation network company in the ordinance — and a traditional cab company.
App-based ride services have been controversial in many communities. Some of that has been due to opposition by taxicab companies that argue against allowing firms to compete for their customers without complying with expensive safety regulations, equipment requirements, background checks and permitting. The new companies also have come under scrutiny after incidents in which drivers have gotten in wrecks or assaulted passengers.
On the other hand, ride-hailing services argue that they can provide an often-cheaper alternative to traditional cabs, reduce wait times by increasing the number of cars available to pick up riders and provide a way for residents to earn extra money with a part-time commitment.
Many of the requirements Guidry is proposing are similar to those imposed on cabs under rules the council approved, over fierce opposition from the taxi industry, in the run-up to the 2013 Super Bowl. Those include requiring that the cars used must be less than seven years old and must be inspected every six months and that drivers be cleared in background checks by firms selected by the city and face both scheduled and random drug tests.
The new companies would also have to ensure their services are covered by significant amounts of insurance, something Guidry was particularly concerned about during last year’s debates. Personal auto insurance would not meet that requirement.
Drivers for app-based services would not be allowed to operate at Louis Armstrong International Airport or pick up passengers from hotels.
The ordinance would also allow existing cab companies to mimic the ride-hailing model if they prefer that approach.
The proposal to allow ride-hailing services comes as Jefferson Parish is considering its own ordinance allowing the companies in.
Uber in particular has come under fire for flaunting regulations in some communities. While the company itself could be fined and have its license suspended if it violates any of the proposed regulations, Guidry’s ordinance also provides for fines of between $500 and $1,000 for drivers who are not in compliance and provides for their vehicles to be impounded or immobilized.
That provides consequences for the drivers themselves that will hopefully deter them from taking a risk and ignoring the law, Guidry said.
Companies would have to pay $100,000 a year to operate as a transportation network company, as opposed to cab companies that have to buy permits for each of their drivers. They would not be required to charge a minimum fare. They also would not have to require the drivers using the service to equip their vehicles with the full complement of technology, such as cameras, that are required of regular cabs.
Uber has fought for regulations that contain those provisions in other markets.
In an emailed statement, Uber General Manager for New Orleans Tom Hayes applauded Guidry and Councilman Jared Brossett, who chairs the transportation committee, for “taking a step in the right direction by introducing regulations that support ridesharing in New Orleans.”
“We look forward to working together to move sensible legislation across the finish line and provide New Orleanians with the opportunity and choice they deserve,” Hayes said.
One of the bedrocks of ride-sharing services has also been the source of some of the most frequent complaints: a price structure that increases fares in times of high demand. “Surge pricing” has been defended by industry officials as a way to incentivize drivers to get on the road at times when many people are trying to get a lift, such as during major holidays and events. But that model has also come under heavy criticism when customers have faced bills far larger than they expected or when prices have spiked during emergencies, such as a recent blizzard in the Northeast.
Surge pricing would be allowed under Guidry’s ordinance, though the companies would be barred from employing it during a declared emergency.
“I think these companies just hurt their own reputations by doing that sort of thing,” Guidry said. “I think the surge pricing may keep some people from using this type of service. But it’s a free market; let the customers decide that.”
Follow Jeff Adelson on Twitter, @jadelson.