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New code also frees traditional taxis from rate-setting, limits on permits

TRIBUNE PHOTO: JONATHAN HOUSE  - A line of Uber and Lyft drivers wait for business at Portland International Airport. The companies agree to pay at least $1 million insurance coverage at all times as a condition for serving PDX, but refuse to elsewhere. By a 3-2 vote, the Portland City Council granted Uber and Lyft permanent entree into the city’s largely deregulated taxi market last week, on terms the two multibillion-dollar San Francisco companies helped draft. The vote culminated a year-long effort launched after Uber defied city rules and started operating illegally in the city, and Mayor Charlie Hales backed down and promised Uber it could operate here when a pilot project launched in April. The final piece in the deal was City Council approval of a new private for-hire vehicle code Wednesday that shifts the city away from its heavily regulatory taxi system.

Portland becomes one of the last big cities in the U.S. to permit Uber, which deploys thousands of do-it-yourself taxi drivers who cruise the streets, electronically “hailed” by customers using smartphones.

Hales patted fellow city officials on the back Wednesday, saying Portland had done its best to accommodate Uber and Lyft while assuring the city’s priorities were met.

“We’ve gone farther than almost any city in the U.S.,” Hales claimed.

But in the end, Uber and Lyft got their way in most respects.

The city got Uber and Lyft to agree to provide wheelchair-accessible service, and Uber’s local leaders say it’s the first time they’ve ever fielded such vehicles in their fleet. However, the two companies will be allowed to contract-out the service, and the city is poised to adopt a subsidy method for wheelchair-accessible service supported by Uber and Lyft. Subsidies will be provided via a surcharge on all taxi trips citywide, rather than outlays from the two corporations.

City commissioners also cited two other concessions won by the city in its new taxi code: requiring Uber to notify passengers that the liability disclaimer it makes customers sign is not legally valid in Oregon, and that Uber and Lyft are the primary insurance carrier for their drivers here.

But even City Commissioner Steve Novick, who led the charge to accommodate Uber and Lyft as city transportation commissioner, acknowledged Portland isn’t requiring enough liability insurance for “period one,” the time when an Uber or Lyft driver turns on their smartphone app and starts cruising for customers, but before they get “hailed.” During that period, Uber and Lyft are only required to provide $50,000 insurance per person or $100,000 per incident, in contrast to the $1 million coverage that they provide once a customer requests a ride and is delivered to their destination.

In contrast, regular taxi companies in Portland must carry $500,000 insurance at all times, though each local company carries at least $1 million.

Novick acknowledged he’s “gone back and forth” on the insurance issue. The requirement for Uber and Lyft during period one is “not as high as it should be,” Novick conceded. “But I’m not going to try to fix that today,” he told fellow city commissioners, “for what I acknowledge is a flaw.”

Uber and Lyft “declare war” on municipalities that dare to require a higher level of insurance, Novick said. “If you’re going to have a fight with a $50 billion company, you’re probably wise to look around for some reinforcements.” (Uber's valuation has since shot up to $62 billion, higher than General Motors.)

Novick suggested he’d testify in favor of a bill the taxi companies put forth to the Oregon Legislature requiring $1 million insurance for Uber and other "transportation network companies" at all times.

Novick also said he might support a proposal, now being weighed in Seattle, to assure that Uber and Lyft drivers have the right to unionize.

Commissioner Amanda Fritz, whose husband was killed in an auto accident on I-5 last year, minced no words in attacking the new taxi code.

Fritz accused the council majority adopting the ordinance — Hales, Novick and Commissioner Dan Saltzman — of “caving in” to big multinational corporations, and likened it to what she sees from a Republican-led U.S. Congress.

Why are taxi drivers still required to have video cameras inside their vehicles to protect customer safety, Fritz wondered, while Uber and Lyft have sno such requirement? “The answer is because Uber and Lyft say no,” she said.

There’s no good public purpose served by allowing Uber and Lyft to provide such low insurance during period one, Fritz said. “The council is opening the city to a liability, in knowing there is a problem and refusing to address it.”

Commissioner Nick Fish, the other ‘no’ vote, complained about Uber’s “well-established track record of running over its critics, competitors and regulators,” by simply declaring “that rules don’t apply to them.”

The new taxi code, billed as providing equal treatment to taxis and transportation network companies, fails to provide “fairness, a level playing field, consumer protection and safety, and trust,” Fish said.

Saltzman disagreed, saying the council did its best to level the playing field. Saltzman noted that one of taxi drivers' chief complaints before was onerous administrative charges by their employers.

At Saltzman's suggestion, the city will now tack on a 50-cent surcharge onto every taxi or Uber/Lyft ride, to cover the city's administrative costs and reduce taxi permit fees.

The new ordinance also lifts the city's longstanding controls over taxi rates and the number of traditional taxis permitted to operate in Portland.

Saltzman said the new taxi new code signifies a “generational shift” in Portland’s industry. Everyone under the age of 35 wants to have Uber and Lyft available here, Saltzman said. Nowadays, young adults love to be able to summons an Uber to take them home when they leave the bars late on Friday and Saturday, he said. Having fewer drunk drivers on the road provides a "tremendous public safety aspect" that should not be overlooked, he said.

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