Most folks are aware that Lyft and Uber are already up and running in Minneapolis. But did you realize the smartphone-based "next-gen taxi" services are essentially operating illegally right now?
To rectify that situation, City Council Member Jacob Frey is working on an ordinance that would regulate the so-called transportation network companies.
Frey, who is working with Council Member Abdi Warsame on the measure, tells us, "We're trying to get an ordinance created as quickly as possible that accounts for and accommodates a new and very innovative business but ensures equity with existing businesses."
By "existing businesses," Frey means traditional taxi companies, none of whom are thrilled about the hip new competition Uber and Lyft represent.
"I think the taxi cab industry needed some competition, and this is a perfect time for the entire transit network to get a bit of a facelift," Frey says.
But the introduction of transportation network companies in other markets has actually been a boon for traditional taxis, Frey points out.
"As far as the cities that have implemented [TNCs] in the past, the year following implementation, cab revenues went up," Frey says. "What I attribute that to is people start getting comfortable not getting behind the wheel themselves. They get rid of automobiles, take [TNCs] more often, and cabs more often too."
"The cab industry has not been able to refute that statistic," Frey adds.
Asked about the regulatory approach his ordinance will take, Frey said there are three ways other cities have dealt with TNCs.
"The route most have taken is to do nothing and to allow Lyft and Uber to operate regulation free," Frey says. "That, in my opinion, is not really the equitable approach nor is it the safest approach."
"The second is to mesh the [TNCs] into the existing taxi ordinance, but that's also a stupid approach because I think it would put a regulatory stranglehold on the potential for the new and innovative business to exist," Frey continues. "You'll suffocate the business."
"The third -- this is a new and innovative approach -- is to draw up some wording to account for the differences [between TNCs and taxis]," Frey says. "There are very few cities that have taken that approach. Most are, 'No regulations or taxi regulations.' I think both aren't fair, nor do they help economic development."
Asked to discuss some of the specific regulations his proposed ordinance contains, Frey first mentioned that TNCs "are not allowed to scout for passengers by driving around and looking for somebody hailing a cab, and they're not allowed to sit in cab stands."
"The whole model of TNCs is you sign up and register for a club where the driver gets to know the passenger and the passenger knows the driver, and it's all done through the app as opposed to in person," Frey continues.
Frey's ordinance also contains some carrots for traditional cabs.
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"The maximum age of a vehicle for [TNCs] is 10 years, whereas for cabs it's five," Frey says. "Clearly that's not fair, so let's make it 10 for both."
"Another example is, with TMCs you're supposed to have one inspection per year, while it's two for cabs," Frey continues. "That's another easy solution -- make it one for both."
"There were issues [cab companies] brought up with cell phone use or dress code or smoking and an easy strategy on all three is to make it the same for both," Frey adds. "Not to mention it's been a rare case where I've been in a cab and the driver wasn't on his cell phone. We need to follow the regulations here too."
The plan is for Frey's ordinance to come before the council's Community Development & Regulatory Services Committee on May 13, with a final vote possibly taking place during the council's May 23 meeting.
Asked how confident he is about his ordinance being approved, Frey says, "I'm quite confident."