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Seattle pops a cap in Uber and Lyft: Rideshare bizs get 150-driver limit

No more flooding the roads with 1,000+ motors, says city council

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Seattle city council has agreed to put in place a controversial cap on Uber, Lyft and other informal taxi booking services.

On Monday the authority voted to rubber-stamp a measure that caps each unlicensed cab service to 150 drivers on the road at any one time – normally the companies organize hundreds at a time.

For the uninitiated, Uber and Lyft offer smartphone apps that let you request a ride from a nearby driver who picks you up and drops you off as required. A payment for the journey is then sorted out by the software. The companies call this real-time instant carpooling or "ridesharing", setting them apart from regulated taxi businesses.

Seattle's limit was stiffly opposed by Uber and Lyft, which both claimed that the ruling would greatly hamper their ability to continue to operate their ridesharing services in the American metropolis. Proponents of the measure, meanwhile, argued that limiting the transport services will help maintain a competitive balance in the market, and keep a competitive and regulated taxi business in the city.

In February, a council sub-committee backed a proposed regulation to place a limit on the number of cars that can be offered by so-called transportation network companies (TNCs), and allow more taxi licenses to be issued by city officials. A subsequent unanimous vote at a city council meeting [agenda PDF] yesterday afternoon put the planned limit into effect, the Seattle Times reports.

Lyft and Uber complained in the run-up to Monday's vote that the measure unfairly targets their businesses and would make operating services in the Seattle area difficult. Uber was particularly vocal in its protest, claiming that the council was deciding to "dismantle" its service in Seattle.

"It was hard for us to believe that an elected body would choose to limit availability of the most affordable ground transportation service in the city while putting almost 1,000 drivers out of work — but the goal is essentially to protect a taxi industry that has significant experience in influencing local politicians," Uber Seattle said on Monday.

"They want to make sure there is no viable alternative to a taxi in Seattle, and so today, the Seattle City Council is going to formalize that principle into law."

The group was disappointed, but not defeated when the vote was announced on Monday afternoon in Seattle.

"Today, in a protectionist move that only serves the existing taxi and for-hire industries, the Seattle City Council voted to place severe limits on Lyft and other ridesharing platforms. These caps have no bearing on public safety," said Lyft spokeswoman Katie Dally in a statement.

"This vote makes Seattle the only city in the country to impose a cap on peer-to-peer transportation. Lyft will continue operating in Seattle, will continue to stand behind drivers, and will continue to offer a safe, affordable and friendly transportation option to the great city of Seattle."

Proponents of the measure, meanwhile, maintained that the law will help taxi companies, which have been placed at a competitive disadvantage by ridesharing services that aren't subject to the same municipal controls and regulations commercial cabbies face.

In discussing the matter last month, city councilman Mike O'Brien (who had advocated for a higher cap on the number of allowed drivers) noted that the entire hospitality and entertainment sector benefits from regulations like those proposed for the TNCs.

"The question I have for the hotels is this: are you also OK with AirBnB operating in Seattle and providing the same service as hotels but without paying hotel taxes and fees?" O'Brien wrote.

"Are the restaurants OK if the City Council goes back and amends the food truck regulations to lift the restrictions we placed on how far food trucks can operate from existing restaurants? Are the tech companies OK if we allow companies to come in and pirate their software as long as the pirated products are popular and consumers enjoy it?"

Seattle is not the only city facing debate over the private car services. Uber and Lyft recently extended insurance coverage for drivers following a San Francisco lawsuit, while taxi drivers in Chicago have filed suit over the lack of regulations placed on the service. ®

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