Two weeks after Uber threatened to leave Kansas City over new vehicle-for-hire regulations, the company and the City Council reached an accord Thursday that both said they could accept.
After late-night negotiations in the past few days, the two sides came to new positions that allowed for a new, unanimous council vote Thursday.
The council agreed to reduce proposed city fees for individual drivers. Uber agreed to provide driver background check information that it originally said it couldn’t reveal for privacy reasons.
Sign Up and Save
Get six months of free digital access to The Kansas City Star
“Everyone won today,” city spokesman Chris Hernandez said.
Uber officials, who had said that Kansas City was one of their best markets in the Midwest, also were elated.
“We applaud the mayor and the City Council for reaching a compromise that will ensure Uber can continue to grow, create jobs and provide safe rides in Kansas City for years to come,” the company said in a statement. “The changes made to the ordinance reflect the voices of hundreds of drivers and tens of thousands of riders.”
The two sides seemed miles apart when the council voted two weeks ago.
Uber said the city was adopting antiquated regulations that didn’t recognize its new technology business model. Uber relies on a smartphone app that passengers use to summon part-time drivers who use their own cars.
Mayor Sly James fired back at the company that its complaints of being forced out of the city were “garbage.”
On Thursday, James said that “after the dust settled” from those contentious comments, the two sides started productive backroom conversations that revealed ways to meet everyone’s priorities.
The vote culminates nearly a year of discussions as the city tried to craft rules that provide a level playing field for traditional taxi companies and new technology transportation companies.
Many riders have said they love the new companies’ convenience and price — and many drivers said they adore the flexible, part-time hours — and they had all strongly urged the City Council to get past its disagreements with Uber.
With its vote Thursday, the council agreed to reduce the fees that individual drivers pay if they use the platform of companies such as Uber and Lyft.
Under the previous version, if Uber paid an annual fee of $40,000, its drivers would pay $100 for an annual vehicle permit fee, along with $50 for a driver’s certificate and $12.50 for a business license.
But Uber had argued that was too expensive for many of its drivers, who may drive infrequently, on weekends or nights, or may stop altogether after a few weeks.
Under the new rules approved Thursday, if Uber or another ride-hailing company pays $45,000, the individual driver’s vehicle permit fee would drop to zero. The new ordinance is subject to review in six months.
Hernandez said another change would give drivers 30 days from their first passenger to complete the certification process. That way, if drivers decide not to continue in the job, they’re not out a significant amount of money.
Councilwoman Cindy Circo, who worked on the negotiations, said the city’s fee-supported Regulated Industries division needed sufficient revenue to continue monitoring the services and to ensure public safety. But if the companies will pay $45,000 annually, she said, that alleviates the need for the individual drivers to pay.
Hernandez said that the city and the companies will ramp up over the next 60 days to make sure all drivers are properly certified.
Thursday’s development came as lawmakers in Jefferson City advanced a bill that would dramatically limit the rules municipalities such as Kansas City could impose on such services. It won initial approval from the House Wednesday, on a 78-56 vote with at least two dozen legislators absent.
Although that bill passed the House, its margin was unimpressive and it still would need to win approval in the Senate with less than a month left in the legislative session. That prompted speculation in the Capitol that its odds of becoming law were fading. That, in turn, suggested to some in the General Assembly that Uber might be losing leverage in its talks with Kansas City officials.
Meanwhile, Uber on Thursday announced plans to expand its operations to four more cities in Kansas — three days after Gov. Sam Brownback vetoed a bill that would have put the ride-hailing company under new regulations.
Uber customers are now able to request rides in Lawrence, Leavenworth, Manhattan and Topeka, Lauren Altmin, a spokeswoman for the company, said in an email. The company already operates in Wichita, Johnson County and Kansas City, Kan. Altmin said the expansion means that the service that enables customers to hail rides using an app on their smartphones will now be available to one out of every two Kansas residents.
Altmin said that customers can unlock three free rides by entering the code “UBERLOVESKS” into their app between now and April 30.
The news is a major win for Brownback. Uber had threatened to leave Kansas if the new regulations became law.
But that measure passed with overwhelming majorities, raising the possibility of a legislative override. The bill calls for broader insurance coverage, particularly covering the time between when drivers turn on their app but before they head toward a waiting rider.
The Star’s Jason Hancock and Bryan Lowry contributed to this report.