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Hitchin' a ride: Local regulations remain silent on rideshare services 

Even though the use of app-based ridesharing services like Lyft and Uber continues to increase, you’d be hard pressed to find them mentioned in local municipal regulations.

While most, if not all, of SLO County’s cities have ordinances and fees for permitting, licensing, and regulating taxi companies and drivers, many do not provide the same for ridesharing services.

It’s an issue the city of Pismo Beach is currently wrestling with as it considers how to even the playing field for taxi companies to compete with Uber and Lyft, which usually offer rides for customers at a cheaper price.

“I think what you have is a situation where Uber and others have come along and undercut the cost for other cab drivers,” said Pismo Beach Mayor Ed Waage.

Taxicab drivers in Pismo Beach have been paying the city for licensing, permits, vehicle inspections, and background checks in order to stay compliant with the city’s municipal ordinances. Those ordinances define a taxicab as any automobile used for transporting passengers for compensation. According to a city staff report, Uber, Lyft, and other rideshare services conduct their own vetting and background checks, and their drivers are not regulated in any manner by the city.

“[The ridesharing services] are technically in violation of the municipal code, if, in fact, they are transporting passengers for compensation,” Pismo Beach City Attorney Dave Fleishman said at a March 7 City Council meeting.

Pismo Beach isn’t the only city in SLO County with taxicab regulations that may or may not apply to ridesharing services. The city of SLO has a similar definition for “taxicab” and requires taxi services and drivers to obtain the proper permits.

“That language could be interpreted as also applying to ridesharing services,” said SLO Transit Manager Gamaliel Anguiano. “Usually the City Council would set that policy.”

The city of Paso Robles has ordinances for taxis and taxi drivers, but Susan DeCarli, the city’s planning manager, said the city currently has no licenses for rideshare businesses.

“It’s something we are going to need to address in the future,” DeCarli said. “But at this time we don’t have anything on the books.”

But the ridesharing services themselves beg to differ. In an email response to questions from New Times, Lyft spokesperson Chelsea Harrison disputed that the company was a “taxi” business.

“Lyft is considered a Transportation Network Company under state law (both by our regulator, the CPUC, and the state Legislature, who has passed a number of pieces of legislation regulating the industry) and not a taxi company,” Harrison wrote. “As required by law, Lyft obtains a TNC license at the state level.”

Uber did not respond to emailed questions from New Times, but has said publicly that it considers itself a technology company that creates apps to connect drivers with riders, not a taxi company.

Even if cities like Pismo Beach may disagree with those assertions, trying to pass local regulations for companies like Lyft and Uber can be a dicey proposition. Pismo Beach Police Department officials claimed that trying to catch rideshare drivers and cite them for violating the municipal taxicab code would be difficult because the rides are paid for with the app, and no actual money changes hands. If cities do try to enforce their local policies or pass new regulations, rideshare companies might leave a city altogether, as both Uber and Lyft did in Austin, Texas, after the city passed regulations for rideshare service companies.

That’s not a fight Pismo Beach appears to be looking for. Instead, the city will likely further subsidize permitting and licensing fees for taxi companies and their drivers.

“What we are trying to do here is level the playing field since Uber is relatively new to operations and they operate completely without paying the city anything,” Pismo Beach Councilmember Sheila Blake said during an April 4 meeting.

In Pismo Beach, total fees for taxi cab companies and their drivers can range from $112 to $535 dollars annually, according to a city staff report presented at the council’s April 4 meeting. Those regulations also require vehicle inspections and background checks for drivers.

Samuel Orr, owner of Central Coast Taxi, was the catalyst for the council taking up the issues. He indicated at a March 7 meeting that the cost of the fees for new drivers could be prohibitive for individuals who want to become taxi cab drivers, encouraging them to drive for app-based rideshare services instead.

“In the beginning, it could be a few hundred bucks up front ... that’s what makes it hard to find drivers,” Orr told the council on March 7.

At the April 4 meeting, the council directed staff to explore bumping up the percentage of the fees the city subsidizes from 50 percent to 75 percent. According to staff, the increased subsidy will cost about $1,809 annually from the city’s general fund, $601 more than the current subsidy costs the city.

Waage, Blake, and Councilmember Marcia Guthrie indicated that the need to keep taxis operating in the city outweighed concerns about spending money to subsidize a business.

“I just think it’s a really important thing to keep this service for our residents here,” Guthrie said April 4.

Blake agreed.

“There’s nothing we can do about Uber,” she said. “But we can do something for Mr. Orr.”

Staff Writer Chris McGuinness can be reached at cmcguinness@newtimesslo.com, or on Twitter at @CWMcGuinness.

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