Kansas City regulations appear imminent despite Uber’s objections

Kansas City appears poised to adopt new regulations that UberX ride-booking supporters say could drive the company out of the city.

It’s a clash of cultures that pits a new-model transportation service based on smartphone technology against the city’s desire to regulate and ensure public safety.

A parade of UberX drivers and passengers implored a City Council committee Thursday to loosen proposed vehicle-for-hire rules and make it easier and cheaper for part-time drivers to connect with passengers.

“Making the regulation too tight for Uber means kicking Uber out of town,” warned Alex Aye, who drives a few hours each week for the company. He said he routinely picks up high-powered executives and attorneys from out of town who love Uber’s consistency and convenience.

“When you kick Uber out of town, you are saying no to interstate commerce and international business,” he told the council’s Transportation and Infrastructure Committee. “Please don’t make that mistake.”

But committee member Dick Davis said the “tough reality” is that Kansas City oversees all sorts of great companies because it has to guard against the bad apples.

“Our word to Uber is, sorry,” Davis said.

Committee Chairman Russ Johnson said that after many months of debate and argument, he thinks the committee should be ready to vote next week on a final draft of rules for both traditional taxi companies and vehicle-for-hire companies like Uber and Lyft.

The latest draft seeks to ensure the companies provide adequate insurance, vehicle inspections and comprehensive driver background checks. It would charge individual drivers $250 (down from $300 in the current law), but if a parent company such as Uber will pay an annual fee of $10,000, that would drop the driver’s vehicle permit cost to $150.

Uber representatives said that’s still among the highest fees in the country. They also oppose requirements that drivers get a business license and a chauffeur’s license, plus provide proof of a medical exam and meet other paperwork requirements.

“It’s important to us to take the burden away from the driver partners,” Uber spokeswoman Jaime Moore told The Star.

Moore said Austin, Texas; Washington, D.C.; Tulsa, Okla.; Minneapolis; and Chicago are examples of cities with minimal requirements and a progressive approach. In contrast, she said, the company has pulled out of Boise, Idaho, and Anchorage, Alaska, recently. Kansas City could be next.

“If the ordinance passes as is, it would make it very difficult for us to operate,” she said.

In testimony Thursday, UberX passengers praised the service as superior to regular taxis and said it lets them live in Kansas City and get around town easily without a car. UberX drivers testified that they keep numerous people from driving drunk on weekends, enhancing public safety.

But Regulated Industries Division manager Jim Ready told the committee his investigators checked up on 16 drivers during the recent Big 12 Tournament. He said none had the required certification, and 10 of those drivers said they would take cash rather than a credit card payment through the UberX smartphone app, which is illegal.

Andy Hung, general manager with Uber Kansas City, said that when the company learns of drivers taking cash, it deactivates them from driving for the company.

Bill George, chief executive of Kansas City Transportation Group, which operates Yellow Cab, scoffed at Uber’s resistance to the driver fees and permit requirements. He argued that Uber could easily pay the licensing cost and relieve its drivers of any expense.

Ready said he doesn’t think the city can go any lower than the proposed $150 per driver and said even that is a financial risk for the city. His division gets no general taxpayer support and must generate the money to retain its investigators.

“We are a fee-supported division,” he said.

UberX first arrived and started operating in Kansas City last summer. But it has become increasingly frustrated with Kansas City’s regulatory stance.

Meanwhile, a rival company, Lyft, wound up in court against the city and suspended operations in October. Since then, however, Lyft’s representatives say its negotiations with the city have become more productive.

Kelvin Simmons, who is representing Lyft, said Thursday the draft rules are not perfect but are encouraging.

“We believe smart regulation is what is needed,” he said.

While Kansas City continues those deliberations, at least for another week, there’s another wrinkle at the state level.

Bills are pending in both the Missouri House and Senate that would limit the ability of cities like Kansas City, Columbia and St. Louis to regulate ride-booking companies.

“Government should make simple rules that apply to everyone — not micromanage industries or pick winners and losers,” Jefferson City Rep. Jay Barnes, a Republican and sponsor of the House bill, said on his website. The Senate bill is sponsored by Kurt Schaefer, a Columbia Republican who is chairman of the appropriations committee.

Mayor Sly James has sent a letter to state legislators, arguing that the state bills undercut Kansas City’s ability to ensure public safety.

“These bills could have a dangerous impact on the streets of Kansas City,” James wrote. “The proposed Kansas City ordinances strike a balance between public safety and encouraging innovation. I ask that the General Assembly afford Kansas City the chance to see this process through on the local level.”

Legislative committees have held hearings on both bills but have not yet brought them up for a vote. With only two months left before lawmakers adjourn for the year, it’s unclear whether the bills will get much traction.

This story was originally published March 26, 2015 at 1:38 PM with the headline "Kansas City regulations appear imminent despite Uber’s objections."