New city ordinance seeks balance for ride sharing firms, traditional taxis

City Council voted unanimously Monday night in favor of a set of changes to the local ordinance that regulates taxi cabs to include drivers for “transportation network companies” such as Uber and Lyft.

The TNCs, as they’re known, allow private vehicle owners to access dispatching and navigation services using a smartphone app that enables them to hire out as a “ride-sharing” transportation service.

The changes to the city’s existing laws seek to put traditional taxi services on as level a playing field as possible,

although it was clear Monday night that not everybody who walked away from the meeting was satisfied with the outcome.

The ordinance changes were worked up by a team of city staff that included City Secretary Patrick Aten and City Attorney Val Acevedo who studied the issues raised in a council meeting this past April in which ride-sharing was a discussion item.

Aten opened his remarks thanking Acevedo and Assistant City Manager Kristi Aday for their efforts in researching the issues connected to ridesharing.

“Council gave direction to include TNCs, not over-regulate them and research what other cities have done, which we have done,” Aten told Council.

“We met with taxi representatives and representatives of TNCs — Uber — and we’ve met with other cities trying to strike a balance between the two business models,” Aten said.

The rules set a 12-month permit for taxi companies and TNCs designed to defray city costs for administration of the program.

They set vehicle and insurance standards, criminal background checks and audits to ensure that the regulated businesses, whether taxi services or TNCs, are meeting the standards.

The coverages required for taxis or for Uber drivers are similar although not perfectly symmetrical, Aten noted.

“They’re not completely identical, but we believe they are fair by conforming to state minimums,” Aten said.

The permit for a conventional cab company will cost $150 per year, with a city-conducted vehicle inspection costing $50 per vehicle, and the fee for a driver’s background check an additional $10 per driver, meaning a company with two cabs and two drivers would pay $270 a year.

The fee for an annual permit for Uber or another TNC would be $500 per year including driver background checks.

District 3 Councilman Ron Reaves asked how the audits would be conducted and whether the city would know how many drivers Uber, for example, would have working in New Braunfels.

“I believe so,” Aten answered. “That’s one of the questions Val (Acevedo) and I have discussed — how big the fleet is.”

“What we’ve found is some of the models these cities have is they incorporated a sliding scale (permit fee) based on the number of vehicles.”

District 2 Councilman Justin Meadows raised concerns about whether the city would be notified by Uber or by Lyft were one of the TNC’s drivers to allow their insurance to lapse.

The city attorney explained that the insurance code specifically sets out insurance requirements for specific coverage to be borne by drivers and by the companies.

Meadows was not initially convinced.

“I’m concerned about accountability,” he said. “Are we assuming every Uber driver is honest?” 

Acevedo was confident the issue is addressed in the ordinance and in state law.

“If a claim is denied by an individual’s auto insurance, then the TNC is responsible for every dollar,” Acevedo said. “That’s state law. They’re completely on the hook.”

Mayor Pro Tem Wayne Peters made a motion to approve the proposed new rules with two amendments. First, he asked that taxi or TNC drivers be allowed to have no more passengers in their vehicles than the vehicle is designed to safely carry. Second, he wanted the vehicles for hire ordinance to echo the city’s prohibition of hand-held devices within the city limits.

Before the vote was taken, District 4 City Councilman Chris Monceballez seconded Peters’ motion and added an amendment that set the limit on the permit fee for a taxi company at $500.

Monceballez also described his own investigation into TNCs — by downloading the Uber app and going through the motions of being registered to be a driver, even though he doesn’t drive for the ridesharing firm.

“I downloaded the app and followed through with my registration and insurance information and even sent them a cute little selfie,” Monceballez quipped. “My insurance expires in under 30 days and it triggered a notification that my insurance is expiring and I would have to update it with new documents or I would not be able to use the platform in any way.”

Comal Cabs operator James Robertson raised a few issues about the proposed changes, stressing that all he was interested in was a fair, level playing field for traditional businesses like his as they worked to compete with the TNCs.

And right away, Robertson noted, he was at a competitive disadvantage because his liability insurance costs $30,000 a year while an Uber driver can operate on his or her personal insurance policy, since Uber takes over the insurance liability when a customer is in the car.

“I cannot get non-commercial insurance,” Robertson explained. “They ask me a very specific question — am I using it as a taxi or business vehicle? If I lie and there’s an accident, I’m not covered. The fact that you’ve written it out of the requirements for a cab is irrelevant when I still have to pay $30,000 a year for insurance.”

Uber, he added, could flood New Braunfels with cabs for it’s $500 permit fee, and he couldn’t compete with that many cabs. 

And Uber, he added, does not provide the level of service a traditional cab does to the elderly or infirm.

“You’re eliminating an important service to a complete demographic of the community,” he said. “I wonder why everybody’s so easy with that.”

Uber driver Scott Trlica spoke, saying he wanted to answer some of council’s questions — and correct the record.

As an Uber driver, he said, when his insurance lapses, Uber shuts off its app until he corrects the problem so he cannot pick up riders.

“We have to provide current documentation of our insurance or the app is turned off,” he said. He went on to explain how the app works, how drivers are investigated by Uber and how they are rated by riders. On a scale of 1-5, Uber riders have rated him at 4.8, he told Council. Over the past two months, his rating is 5.0.

“We just want free competition,” Trlica said. “If taxis go out of business, I’m sorry. We’re the future, and all we want is the ability to operate. We’re just a new technology.”

City Cab operator Joseph Ayala acknowledged the future might be here, but he said Uber and companies like it would have a way to go to provide the service he or Robertson does.

“I’ve been doing this a long time,” Ayala told Council “Cab companies are about service, and Uber doesn’t do service. Uber drivers don’t know service.”

Another thing Ayala said he would like to see is that Uber vehicles carry signage or identification like taxis do. 

“We have signage all over our cars,” Ayala said. “You don’t know who the Ubers are.”

Resident Justin Seaman said he and his wife and child are regular Uber riders.

“We rely heavily on Uber,” Seaman said. “Uber is the way of the future. We just don’t have the disposable income to pay for taxis on a regular basis.”

Robertson was displeased following the vote. He said he didn’t know whether he would be able to compete with the TNCs.

“It’s about customer service and the safety of the public,” Robertson said. “That’s the reason this industry has been regulated for more than 100 years.”

District 1 City Councilman George Green recused himself from the discussion and vote on the vehicles for hire ordinance.