Work continues on ride-sharing ordinance to regulate UberX, Lyft

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March 18, 2014 // UPDATED 11:42 am - March 19, 2014
By: Ben Johnson
Ben Johnson

City staff is working on crafting an ordinance that could require “ride-sharing” services that have recently begun operating in the Twin Cities to be licensed and regulated in a similar fashion to taxi cabs.

UberX and Lyft are two services that allow people to use an app on their phones to request and pay for rides from other people driving their own vehicle.

At the end of the ride UberX – an offshoot of Uber, which operates under limousine regulations – charges an amount based on time, distance traveled and current demand to the passenger’s credit card. Lyft operates in a nearly identical fashion, but it a requests a suggested donation at the end of the ride instead of automatically charging the passenger’s card.

Both services take a 20 percent of the fare and the remaining 80 percent goes to the driver. To sign up to become a driver the companies require a safety inspection, valid insurance and a late-model car.

Both companies are currently operating without being licensed as a business by the city of Minneapolis. During the last six months city staff has joined a handful of other cities around the country in scrambling to come up with an ordinance that can regulate the burgeoning ride-sharing trend.

Craig Wilson, head of business licensing for Minneapolis, said the new ordinance could look a lot like Seattle’s, which passed on March 17. Seattle elected to require ride-sharing drivers to register through the same process as cab drivers and limited the number of ride-sharing drivers that can be operating at once to 150. It also required the companies to provide commercial insurance for its drivers any time they are logged onto the app that allows them to pick up passengers.

Ward 7 City Council Member Lisa Goodman compared the rise of companies like Uber and Lyft to the rise of food trucks a few years ago. She acknowledged that some restaurant owners were “disgusted” by the city’s friendly attitude toward food trucks, but she said overall it was a good thing because it allowed young entrepreneurs to avoid some of the high costs associated with starting a new business.

“This is the wave of the future, we are not the first city to deal with this,” said Goodman at a March 18 City Council committee meeting. “It’s just a question of what it’s going to look like, it’s not a question of are we going to allow it, because we are.”

Wilson said he was meeting with representatives from both Lyft and Uber immediately following the committee meeting, and Goodman requested that he report back in a month for an update on the new ordinance.

Ben Johnson // 612-436-5088 // bjohnson@mnpubs.com // @johnsonbend