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Ordinance may pave way for Minneapolis ride sharing

  • Blog Post by: Eric Roper
  • March 6, 2014 - 3:31 PM

The City Council is poised to wade into the ride sharing debate following Lyft’s rocky start with city regulators last month.

Council Member Jacob Frey intends to introduce an ordinance that will create a legal framework for ride sharing services such as UberX and Lyft, which are now viewed as taxicabs under city ordinances. Lyft launched last week in dubious legal territory, temporarily bypassing a city threat to impound their cars by offering a free promotion to passengers.

“I do want them to be able to operate,” said Frey, who represents part of downtown. “I want them to be able to operate within the city’s framework that we’re now creating.”

Ride sharing services allow people to essentially act as chauffeurs of their own vehicles, picking up strangers who request a ride through a smartphone app. Lyft and UberX can operate legally in St. Paul, but the city's head of business licensing has already towed three UberX vehicles in Minneapolis for operating without a license.

Frey’s biggest concern is insurance, an issue that has dogged these services in cities across the country.

Personal insurance policies generally don’t cover vehicles being operated as a business. Lyft says it has $1 million excess liability coverage, but it hasn’t shown it to city officials. Then there’s the sticky question of whether Lyft drivers without a passenger are, at that moment, operating as a business.

Just how insurance, licensing and permits will be handled in an ordinance remain to be seen. Frey will announce his intent to introduce an ordinance at Friday’s council meeting, but the ordinance itself has not been written.

He said ride sharing is a valuable complement to other ways of getting around the city.

“I look at ride sharing as one segment of the broader transportation collage that people can work with without owning their own automobile,” Frey said, highlighting several modes of transit and taxis. “This is one more segment that will allow people to abandon their cars and live in a happening urban atmosphere.”

Prospective Lyft users can summon a car by using a smartphone app. Once they arrive at their destination, a “suggested donation” is displayed based on the time and distance of the trip. Passengers can modify the amount as desired.

Lyft and UberX don’t win many friends in the taxicab industry. The president of the Minneapolis Taxicab Drivers and Owners Association, Ahmed Galal, notes that taxi drivers who own their cars must get the vehicles inspected, take tests at City Hall and pay for commercial insurance. His insurance costs $582 a month.

“If Lyft wants to come in and say 'Hey, we’ll follow the same policy and procedures that taxicabs are doing,' then fine,” said Galal, who owns a cab he drives for Green and White Taxi. But if they won’t jump through the same regulatory hoops, then he opposes it because, “They are killing my business.”

Top photo: Lyft driver Nancy Tcheou waits in her car after dropping off a passenger as a taxi cab passes her in San Francisco (Associated Press). Right: Jacob Frey (Kyndell Harkness)

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