Are Uber and Lyft Plotting an End Run On Seattle Regs?

TNCs want the state of Washington to create the rules, not cities like Seattle.

A bill heard last week in the state Senate Transportation Committee has some labor unions and members of the taxi industry up in arms. It would, if passed, give transportation network companies (TNCs) like Uber and Lyft the green light to operate under statewide rules — not local rules — and that could include landmark regulations passed in Seattle.

“It’s bone-chilling,” says Cindi Laws, director of the Wheelchair Accessible Taxi Association and board member on the Evergreen State Taxi Association. “It removes all local regulations – all local control. It gives sole control of regulations over TNCs to the state.” And those regulations, she argues, “are so minimal as to be a joke.”

Drivers and lobbyists for Uber and Lyft argue that there are compelling reasons to streamline a “patchwork” of local TNC regulations; it would reduce the administrative burden on both cities and individual drivers, for example. But the aspect of the draft bill that would preempt all municipal regulations in favor of new, statewide ones inevitably raises eyebrows of those who’ve been watching Seattle — home to perhaps the most striking local-level TNC regulation in the country. Last month, Uber launched a new lawsuit against Seattle’s collective bargaining ordinance for TNC drivers. (A previous lawsuit, led by the U.S. Chamber of Commerce, was dismissed when a judge ruled it premature.)

Filed on January 17, the new suit calls Seattle’s efforts to implement the law “arbitrary and capricious,” in part because the city’s current rules say that union members must have been driving for at least 90 days and have driven at least 52 trips before they qualify for a vote. Although these rules are arguably a compromise between warring factions of Uber representatives and labor unions — and errs on the side of Uber’s request to allow part-time drivers as much of a say as full-time drivers — Uber filed suit in King County Superior Court the very day the draft rules took effect. That, to some labor organizers, doesn’t bode well.

“We can’t support this legislation for a number of reasons,” testified Brenda Wiest, legislative affairs director at Teamsters Local 117, during the bill’s hearing last week. “We are particularly concerned about the collective bargaining ordinance that’s in the city of Seattle right now. We’re not convinced that the way the legislation is currently worded that that is protected.”

Uber’s lawsuit, she added, “appears to be an effort to make it easier to not have that collective bargaining ordinance go forward.”

The language in the draft bill of SB 5620 is certainly firm. “The state of Washington fully occupies and preempts the entire field of regulation of transportation network company licensing and permits,” reads Section 21, in part. “Local laws and ordinances that are inconsistent with, more restrictive than, or exceed the requirements of this chapter may not be enacted and are preempted and repealed.”

“It doesn’t get more clear than that,” Laws testified.

But according to Caleb Weaver, Uber’s manager of public affairs in Washington, Section 21 “was written to make it clear that we are not attempting to preempt that particular ordinance” — the collective bargaining ordinance — passed in Seattle. “We’re working with the city and others to make that clear.”

This is hardly the first time lobbyists for Uber and Lyft have vied for statewide control; 38 other states have already created some regulatory framework for TNCs, according to Weaver. “Washington is behind,” he told the Senate committee. And yes, some of those state rules preempt local rules. Ohio, for instance, passed very similar legislation in late 2015 that did away with the city of Columbus’ rules. Another nearly-identical bill is currently underway in the Missouri state legislature.

Washington’s bill would create statewide vehicle maintenance and insurance requirements, mandate one-time state and federal background checks for drivers, charge each TNC company an annual fee of $5,000, and charge passengers a 10 cent per-trip fee.

Uber and Lyft drivers who spoke at the hearing pointed out that local licensing restrictions can feel onerous; as driver Shavonna Rivers testified, with different regulations in every city, “it’s not in unison, [so] when we look at the regulations, it’s not clear, I don’t know where to file, how to file… it becomes more cumbersome on us, so we just say, ‘forget it’… Rivers described the frustration of driving passengers from downtown Seattle to the Tacoma Dome, then being unable to legally drive any passengers back to Seattle.Having statewide regulation would increase access to people outside urban centers like Seattle, and, as Weaver argued, charging a 10 cent per-trip fee to passengers, instead of to TNC companies or drivers, would “encourage competition” and establish “a clear framework for new competitors to enter this space.”

Still, some see the bill as yet another way that Uber and Lyft are vying to keep their profit margins high. Laws argues that the proposal is patently unfair to taxi drivers, who would not qualify under the bill. Right now, each individual Seattle taxi driver pays approximately $1,600 a year to work in Seattle and King County — a far greater financial burden than charging $5,000 every year to Uber, a company some sources value at $68 billion.

“This is a giveaway, on the magnitude of a Boeing tax giveaway,” says Laws. And, if a state bill were to do away with all local TNC regulation, it would also eliminate other Seattle programs, such as the ten-cent per trip fee that Uber currently contributes to Seattle’s Wheelchair Accessible Taxi (WAT) fund. To pass this bill would be to “do away with that fund — just completely do away with it,” she says.

Like many bills in the state legislature right now, SB 5620 is a “work in progress,” according to both Weaver and Sen. Curtis King, R-Yakima, the bill’s sponsor. Weaver says he anticipates, for instance, that any concerns over Seattle’s WAT fund will be addressed in the next version of the bill. As for the collective bargaining lawsuit, Seattle fired back a response on January 31, maintaining that Uber has no standing. “The City of Seattle passed a first-of-its-kind law seeking to empower independent contractors,” it reads. “Uber seeks to derail this law through a rulemaking challenge.”

A court hearing is scheduled for March 17.