The Shreveport City Council has voted to pass an ordinance to adopt Chapter 102, Section 88 (102-88) which defines and regulates “Transportation Network Companies” (TNCs) which include Uber, Lyft, and other digital hailing services that don’t otherwise qualify as taxicabs or limo. The vote passed unanimously, 7-0.
In our last article about the TNC vs taxicab discussion, there were lingering questions as to how they might be regulated relative to taxis. Questions like what inspections or fees might be necessary and whether or not special licenses and insurance would be required. Taxicabs currently pay $225 in fees, licenses, and inspections each year in addition to special insurance coverage which can amount to several thousand dollars a year.
- Uber/Lyft as companies would need to apply and pay for an annual license to operate paid to the police department. The license is $2,500 per year.
- The new law requires Uber/Lyft to carry insurance to cover its drivers while working, which Uber and Lyft do, and they also must hold the city harmless with regard to any activity of the driver.
- The law requires a $0.25 fee for any ride originating within city limits and an additional $1.00 fee for rides originating at the regional and downtown airports.
These points reveal something very interesting – Shreveport’s newly-minted Chapter 102-88 puts most of the burden of operating on the TNC itself, rather than the drivers. The drivers are on the hook for virtually no upfront cost. A driver can become qualified and start driving simply by meeting Uber/Lyft’s nationwide requirements (including a special vehicle inspection and a criminal background check), downloading the app, and setting it to Driver Mode.The discussions about TNCs have been rumbling in Shreveport since the services became popular in larger markets, building momentum as Uber began advertising online for drivers over two years ago. However, pushback from local taxi companies began in earnest just last November during a Public Safety Committee meeting where cab owners voiced their opposition to allowing Uber and Lyft to operate, citing everything from the difference in cost of doing business to public safety.
However, the public-facing rules TNCs have to follow are far and away more stringent than taxicabs have ever had to abide by in Shreveport. TNCs must display an estimate of the fare before a rider enters the vehicle, an itemized receipts must be delivered electronically, their app must display a picture of the driver and vehicle license plate, and they cannot accept cash. All this on top of the fact that ride information is stored and tracked by GPS for later recall. It’s the most customer-focused set of laws and voluntary best practices we’ve ever seen applied to vehicle-for-hire companies in this city. Perhaps if some these rules were in play for taxicabs, the facilitation of TNCs may not have been as necessary.Claims have been made that some local cab services are working to accommodate modern expectations. For example, VIP Taxi and Checker Cab share an app (named TaxiCaller) that allows digital hailing and it was said that it was just as functional as TNC apps – despite waiting upward of 30 minutes or more (in my personal experience several times a week), no pictures of drivers, no license plates, no fare estimates, and no way to pay using the app.
These and other misses on quality of service, along with failures of local government to provide robust consumer protections, set the stage for Shreveport citizens’ longing for a better way to traverse the city. Consequently, it has created a pathway for Uber and Lyft to accumulate a large portion of market share should they choose to move in.
Even if the city council decides to add fingerprinting and background checks (which may be required by the state later this year), is there any doubt that TNCs would win the market barring substantial operational shifts by local taxicab companies?
Passing this today is a step toward allowing modern transportation options to compete in the Shreveport market, but the process is far from over. When and if Uber or Lyft do decide to launch, they will need to inspect cars, apply and pay for a license with the city, and demonstrate the necessary insurance coverage.
In the intervening time, perhaps taxicab owners will step up and institute company-wide or local industry-wide best practices in order to compete. Perhaps the city will look more seriously at consumer protections across the entire local vehicle-for-hire industry as are afforded in other cities. Perhaps taxicabs will consolidate – or suffer a worse fate. They don’t have to, though. The city should work with them as best they can to set the stage for success by updating the rest of Chapter 102 (including a reassessment of regulations and upgrading consumer protections) and let the market go to work, as Councilman Corbin noted in today’s meeting.
Whatever the outcome, all we can do now is wait and see.