Updated at 4:36 p.m.
Transportation services like Lyft and UberX will be legalized in Minneapolis, and taxicab regulations relaxed, under a proposal that cleared a key City Council panel on Tuesday.
The unanimous vote on the package of changes follows months of haggling between the smartphone-based companies, the taxi industry and city regulators. The full council must still weigh in on the proposal at their meeting next week.
Lyft and UberX essentially allow people to act as chauffeurs of their own vehicles. Their entrance into the market several months ago has ignited a discussion at City Hall over how to regulate these unlicensed businesses, which are often competing directly with heavily regulated taxicabs.
Despite a push for one ordinance to cover both industries, the final language delineates clear differences. Only taxis can pick up passengers who hail them on the street, for example, but transportation network companies aren't bound to charge rates set by the city.
Critics of the proposal said that Lyft and Uber, now known as "transportation network companies," will raise prices without government oversight and discriminate against certain passengers.
"People who don’t live in very nice neighborhoods, they don’t have to pick up or drive home," testified Martha Hague at Tuesday's hearing.
The proposal's sponsor, Jacob Frey, countered that the city will audit where the companies have been accepting and denying rides. Plus, he noted, taxis are already discriminating.
“There has been discrimination for years now in the taxi industry. Let’s just be honest. It has been there," Frey said, referencing a recent Star Tribune article. "Will there be problems with Lyft and Uber? There may very well be. We live in a society that is at times discriminatory. Now as government, it’s our job to guard against that."
While transportation network companies can sometimes be cheaper than cabs, UberX charges three times its normal rate during peak hours -- with a $20 minimum.
“As a cab driver, I cannot raise my rates," said driver Fred Anderson. "And I’m obligated to take all customers unlike [transportation network companies]. This is not a level playing field.”
But the taxi industry scored some major victories due to an effort led by council member Abdi Warsame, changing some city ordinances that have remained untouched since the 1980s.
Vehicles could be inspected at non-city facilities, for example, and cabs could be five years older than they are now. A requirement to have a certain number of wheelchair-accessible cabs was replaced with an incentive program for both taxis and the transportation network companies.
Drivers would also be able to use the cabs as private vehicles, giving them more parking privileges, and owners could charge drivers more than $85 a shift.
The city will impose a license fee of $35,000 a year on transportation network companies, and another $10,000 as a surcharge if they do not have handicap-accessible vehicles. The license fee will help pay for a new inspector, while the wheelchair charge will help fund a to-be-determined fleet of accessible vehicles.
Insurance proved to be one of the trickiest parts of regulating transportation network companies. UberX, for example, uses a hybrid commercial policy that "supplements a drivers personal auto insurance." The state's insurance commissioner said that this raised the possibility of "unacceptable" insurance gaps, recommending that UberX obtain traditional commercial insurance.
The current proposal requires drivers to have their personal insurance policies acknowledge their roles as occasional commercial drivers. Transportation network companies must cover drivers when they are logged into the system.
"We intend to expand our service as we are able to recruit more and more people to drive on our platform," Candace Taylor, manager of government relations at Lyft. "And we also are committed to making sure there is accessibility for everyone in this jurisdiction."
Is there a developer out there who can rescue a handsome old apartment building from more than 10 years on the city’s boarded building list?
The 1904 building appears to have decent bones but could use an extensive facelift. The city’s development department said it’s open to business, and rental or ownership housing proposals. It said it will give priority to fully funded business or market-rate housing proposals.
The agency's Cherie Shoquist said it decided to seek proposals now because the city started getting inquiries from developers. She said she's expecting proposals for higher-end rental housing.
“The building’s so beautiful and has so much potential," Shoquist said.
But the neighborhood is feeling cut out. Ventura Village board chair Thor Adam said the neighborhood group learned of the agency's RFP from a reporter's call. "To be removed from that is concerning,:" he said. Years ago, the neighborhood group expressed a preference for ownership housing such as condos to offset the area's high concentration of rental housing, Adam said. He said the project also needs to be considered in the context of larger discussions about future use of city-owned lots in the area.
Shoquist said the group will have an opportunity to review and comment on proposals, and that's better than ruling out potential usines of the building upfront. . “We encourage the developers to contact the neighborhood and bring letters of support form the neighborhood," she said.
The structure was built as luxury apartments, but has fallen since on hard times. It sits not far from the 5th Avenue S. freeway entrance, between the major commuting routes of Portland and Park avenues.
The city in essence bought the building in 2012 from the Sabri family trust after Azzam Sabri, the building’s most recent owner, died of cancer in 2011. The purchase went through the Twin Cities Community Land Bank as an intermediary. Sabri got the building after a court fight with previous owner Jason Geschwind, to whom he provided financing.
The development agency insisted that he follow through with Geschwind’s commitment to create condos. Sabri wanted to switch to commercial reuse, but ignored the city’s requests for details on financing, marketing and other specifics.
Sabri's brother Basim, also a developer, said he has no interest is making a proposal to the city because he likes to work independently. "It's a gorgeous building," he said.
By Eric Roper and Maya Rao
Legal challenges are mounting in a contentious state house race that has divided Minneapolis' Somali community.
Rep. Phyllis Kahn's campaign filed a petition with the state Supreme Court Monday alleging that a city election judge was biased toward Kahn's opponent, Mohamud Noor. The filing comes just days ahead of a hearing on the eligibility hundreds of voters who are registered to a Cedar-Riverside mailbox center.
Kahn was denied the DFL endorsement this spring partly due to Noor's ability to mobilize Somali delegates. The race is likely to be decided by an August primary which has already drawn hundreds of absentee voters.
The filing alleges that election judge Fadumo Yusuf asked voters in Somali at City Hall whether they were voting for "our Somali brother" or "the old Jewish lady." Election judges must be neutral under state law.
"She is completely neutral. And she didn't say that," said Omar Jamal, a prominent Somali activist who said he was representing Yusuf on Monday. "And this is purely harrassment and intimidation from Phyllis Kahn's office."
Kahn's campaign initially asked the city to review the matter, but escalated it to the Supreme Court after finding that Yusuf continued to work as an election judge. The petition asks the court to remove Yusuf as a judge and questions whether the city's clerk, Casey Carl, has appropriately supervised the city's judges.
Mohamed Jama, who has been gathering Kahn supporters to cast absentee votes, said in an accompanying affidavit that Yusuf was also communicating with Ilhan Omar, a Noor supporter who works as an aide to council member Andrew Johnson.
"I saw Omar shouting instructions to Ms. Yusuf while Yusuf was assisting people in voting," Jama wrote in the affidavit.
Omar denied this allegation in an interview Monday, adding that there is no basis to the rest of the claims in the petition.
He added: "I believe Yusuf...was trying to improperly influence people to vote for Mohamud Noor."
Another man who does not speak Somali, Michael Molzahn, described an incident in which an election judge wearing a red scarf -- matching other descriptions of Yusuf -- began arguing with Jama while he was interpreting for an elderly man.
Carl asked Jama to leave the balloting area. Omar and the election judge then began speaking with the man, until he called for Jama to return.
"The presence of Omar was most unusual," Molzahn wrote. "It did not appear that she was requested to assist this voter, yet she was allowed to approach him twice."
Omar said she never spoke to the man and had only intervened to ask Carl that a neutral judge – such as Yusuf or another woman – act as the translator. She said it is “laughable” that Yusuf favors either side in the DFL primary, since she is very politically conservative (Yusuf has previously run for office as a Republican).
“My only aim in taking the day off and making sure that I was there was to ensure … that everything was legally done,” said Omar, who was not named as a party in the petition.
Kahn's attorney, Brian Rice, said he expects the court will make a decision on the petition by the end of the week.
Jama said that Carl improperly asked him to leave after he complained about the judge.
“I have never seen this kind of politics -- dirty politics,” he said of the race in general. “What does that say about the city’s process? … . It’s the voter’s choice.”
“Our voters have to look around their door to get out,” said Jama. “People are scared for their lives. People are being threatened.”
The complaint follows accusations of two Kahn supporters attacking a political opponent on Saturday at the Riverside Plaza apartments. Minneapolis police cited Halima Elmi and Deqa Adan for fifth-degree assault of Marian Hersi, who is campaigning for Noor. Adan’s older brother is the ward’s council member, Abdi Warsame, who also supports Kahn.
Hersi declined to speak about the incident Monday, saying she would wait until the police investigation was over and that she was busy knocking on doors for Noor.
Warsame said Adan was coming home from work and “had nothing to do with this.” He added that the officers – who, like all the participants, were Somali-American – did not question his sister, but took the word of Hersi.
Kevin Short, an attorney for Elmi and Adan, said they had been falsely accused and that he would ask the city to dismiss the misdemeanor charges.
“In the Somali community, if you are supporting Phyllis Kahn as opposed to the other candidate, you are in a minority … they have been harassed to no end as a result,” he said.
Randy Furst contributed to this report.
Photo: Workers raise an All-Star banner Monday, July 7, 2014, at Minneapolis City Hall.
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