More Taxi Licenses Are Headed To Seattle; What Happens From There Is Less Certain

In the aftermath of last week’s Seattle taxi committee vote, much of the focus has been on the proposed cap that would be placed on rideshare drivers if the full council signs off on the regulations next week. And rightly so. But that’s far from the end of the story.

Specifically, the City of Seattle hasn’t issued a new taxi license in over 23 years. If, as expected, the new taxi, for-hire and rideshare regulations pass a full council vote on March 10, that will change - with 100 new taxi licenses issued annually for the next two years. Currently Seattle has a cap of 850 on taxi licenses, but approximately 200 of them remain unissued.

The result of releasing these license over the next two years is likely to be a run on them, according to the city and the union that represents over 500 local taxi drivers. What exactly that will look like, however, remains unclear.

Denise Movius, Seattle’s director of Revenue and Consumer Affairs division, knows there’s a “pent up demand” for new taxi licenses. But she also knows that the upstart rideshares, along with the blossoming for-hires - soon, perhaps, with the freedom to legally pick up street hails - will probably dampen the rush. She says her office will have at least a preliminary plan in place by March 10 about how the new licenses will be doled out, via a lottery. Considering taxi licenses have historically sold on the open market for upwards of $150,000, Movius says she still anticipates “there will be a big demand” for them.

As Dawn Gearhart, spokesperson for Teamsters Local 117, notes, though, the value of these taxi licenses has taken a big hit of late. While many taxi license owners took out substantial loans or mortgages to pay for them, the value of taxi licenses has been dropping regularly for the last two years, with the emergence of for-hires and the rideshare boom to blame.

“The new licenses wont have the same value, obviously,” says Gearhart. “It’s not going to be a business where you can make a lot of money.”

That said, Gearhart still says there is excitement in the taxi industry for the release of the new licenses. At this point, she says, the main concern from current and prospective taxi license owners is simply making sure the lottery system is fair for those who’ve been waiting years for this opportunity.

“The chances that they come up with a plan that’s going to make everyone happy are, of course, very low,” she admits. “We’re just looking for something that’s fair.”

What would fairness look like? That’s yet to be determined. But particularly concerning, Gearhart explains, is the possibility that anyone who owns even a portion of an existing taxi license would be prohibited from partaking in the lottery - a course the city is considering taking with the new regulations. Gearhart says owning a small portion of a taxi license has been one of the only ways for someone to jump into the taxi industry for the last two decades, and if the city disqualifies these people it will effectively penalize them for it.

“If you were the one who followed the rules, you’re going to be the one who’s out of luck,” she says.

What it will all look like is something the city hopes to be able to explain soon.

“We got a lot of the information Thursday night, like everyone else,” says Movius. “We need to sit our experts down, and see what it’s going to take ... to do things the right way.”

 
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