After months of debate, the New Orleans City Council passed a ridesharing ordinance April 9 that would allow digitally based transportation companies to start giving rides in the city. But both Uber and Lyft, ridesharing businesses that have been instrumental in getting the legislation off the ground, told Gambit they likely won't be able to operate because of last-minute amendments to the ordinance.
The companies are particularly dissatisfied with language that would prevent transportation network companies or TNCs (the newly minted, digitally based, for-hire designations the ordinance creates) from discouraging passenger or driver litigation. Specifically, the ordinance in final form states that any TNC attempts to require passengers or drivers to resolve disputes via arbitration or litigation outside Louisiana shall have no effect, which means passengers or drivers could sue TNC's in Civil District Court.
"The 11th-hour changes make it very difficult to operate in the market," Michael Masserman, Lyft's director of government relations, told Gambit. "Not just for Lyft and Uber but for anyone in the ridesharing industry. There's potentially overly burdensome litigation costs and insurance measures that have been legislated ahead of or before the private sector."
Tom Hayes, Uber's local general manager, couldn't say whether the San Francisco tech company would be able to operate here until his team had a chance to evaluate the amendment. But in public comments made to the council, Trevor Theunissen, Uber's public policy manager for the Southeast, said the company would not be able to operate under the ordinance as adopted.
"There's a strong and enduring public policy decision that's been repeatedly affirmed by the [U.S.] Supreme Court to encourage arbitration of dispute," Theunissen said during the meeting. "Uber, like many companies — including some here like the [New Orleans] Pelicans, the [New Orleans] Saints, the Superdome — many companies are relying on this national view to require arbitration of disputes."
As passed, the ordinance doesn't require drivers to have a special license for TNCs, though traditional cab drivers require a chauffeur's license. A TNC driver would need to pass a background check, but would not be required to complete a fingerprint check — both of which are required of cabdrivers. TNC vehicles also don't need commercial license plates, though the city requires taxis to have them.
Insurance would be handled via a compromise insurance model bill, complete with two periods of liability coverage. Period one would cover the driver when a for-hire app is turned on but before he or she has matched with a rider. Period two would take effect from the time a driver is matched with a passenger to the completion of that ride.
TNC vehicles would not be allowed to sit at cabstands, be hailed by passengers on the street or accept cash — a rule that Jason Coleman, who owns Coleman Cabs, warned the council that Uber and Lyft frequently flout in other cities.
In his closing remarks, just before the vote, District D Councilmember Jared Brossett said he considered the lack of satisfaction on both sides a good sign.
"The fact that it's not 100 percent of what either side prefers is a sign that we have struck the right balance," he said.