Tensions rising over Lyft, UberX regulations in Minneapolis

Minneapolis' taxicab industry is growing increasingly frustrated with a City Council effort to legalize app-based transportation companies such as Lyft and UberX.

A group of taxi drivers and company owners looked on Tuesday as a council committee discussed new regulations governing Lyft and UberX that essentially would allow people to act as chauffeurs of their own vehicles. Drivers and owners said afterward that the rules are unfair because cabs are subject to more burdensome regulations.

The committee will hold a public hearing April 29 on the proposed regulations and hopes to hear back from the state insurance commissioner and insurance trade groups that are reviewing UberX's insurance policy.

"Within two weeks it's going to escalate," said Zach Williams, owner of Rainbow Taxi, surrounded by taxi drivers in a hall. "You're going to have a much bigger crowd out here two weeks from now."

Lyft and UberX are operating illegally in Minneapolis, since city ordinances require them to license their vehicles as taxicabs. That has left Williams and other drivers puzzled as to why the city is making room for the new companies rather than enforcing the law.

Said Williams: "If the mob came to town and started operating, would they [city officials] just say 'OK, we've got to legitimize them?' "

Cities across the country are grappling with this new, unregulated alternative to traditional cabs. Taxi drivers have held protests at city halls in Los Angeles and San Francisco. Seattle recently moved to cap the number of drivers who can chauffeur in their own vehicles.

"This will leave a certain type of traditional taxicab ride like street hails, taxicab waiting stands at hotels, for licensed, regular taxicabs," said Grant Wilson, the city's head of business licensing.

Under the regulations, sponsored by Minneapolis Council Member Jacob Frey, companies would be licensed, rather than the vehicles themselves. The companies could perform their own background checks and vehicle inspections, which could then be audited by the city. Taxi drivers, by contrast, must have their vehicles inspected by the city and pay for the inspections.

Waleed Sonbol, general manager of Blue and White Taxi, said he was shocked by that provision.

"The way I look at it is, 'All you guys are worth millions, so we trust you. And you guys aren't worth millions, so we don't trust you, so we're going to make sure we hold your hand throughout the entire process,' " Sonbol said. "That's all this is in the end. It's another form, in short, of gentrification."

Taxis are stringently regulated in Minneapolis, down to the types of clothing drivers can wear (no T-shirts without pockets) and how often cabs must be washed (weekly). Drivers without fares are required to stop for any "orderly" passenger in their service area, clearly display their rates and pass a test on the city's geography and street layout. They pay the city to inspect their vehicles regularly and cannot even play the radio unless passengers consent. Cabs older than five years must be replaced.

The taxi industry's concerns were raised to the committee by Council Member Abdi Warsame, who says he has "grave concerns" about the ordinance, which he said was unfair to taxi drivers. "They have to get licenses, they have to get inspections and these operations don't have to do that," he said.

Williams said that given the lower operating cost for app-based companies, "I'm going to be the first one in line to apply for my peer-to-peer transportation network license."

Frey said the city needs new regulations to bring Lyft and UberX under the law. "We've presently got Lyft and Uber that are operating largely illegally," he said. "So we have to find a way to move forward as expediently as possible."

But Frey said the final regulations would also have to be equitable, adding, "Perhaps there needs to be sort of a large or small-scale deregulation of how we handle taxicabs right now."

Council members had trouble even agreeing on when to hold the next public hearing. John Quincy wanted to wait for stakeholder meetings and an answer from the insurance commissioner.

The committee's chair, Council Member Lisa Goodman, emphasized the need for transparency.

"I personally think that the kind of public hearing when the decision's already been made is terrible," she said. "I think it's better to have a public hearing, hear from everyone who has a concern and attempt — to the best that we can — to take another cycle and deal with those issues."

The committee is not expected to vote on the issue until early May.

Eric Roper • 612-673-1732