The Anchorage Assembly, after about two hours of public testimony Tuesday night, voted 8-3 to pass an ordinance that could eventually break the stalemate between ride-sharing giant Uber and city officials and taxicab permit owners.
In a meeting already crowded with agenda items including the city budget, towing ordinance changes and liquor license renewal challenges, public testimony on an Uber ordinance from Assembly members Dick Traini and Amy Demboski took up much of the night. Just minutes before the deadline to end the meeting, the Assembly approved the ordinance. Ernie Hall, Pete Petersen and Paul Honeman voted against it.
In his dissent, Honeman said he believes the city needs more time to work out the details before making a deal with Uber,
"I don't like being against the wall with a pitchfork held against me," Honeman said.
The ordinance, AO-127(S), will temporarily exempt Uber, which bills itself as a ride-sharing service, from all Anchorage municipal taxi codes – known as Title 11. It directs municipal attorneys and transportation inspectors to work with Uber to come up with a pilot program – negotiating details including insurance coverages and background checks for drivers, vehicle inspections, accessibility to people with wheelchairs, and service to traditionally underserved communities like Eagle River and Girdwood. The entire agreement, called a memorandum of understanding, will then have to be taken back to the Assembly to be approved before Uber would be allowed to operate in Anchorage as a paid service.
Uber is currently not charging Anchorage residents who utilize its smartphone app to call for a ride. Anchorage Superior Court Judge Michael Corey ruled in mid-October that the company was subject to the city's taxi codes unless it continued its introductory offer of free rides. The Traini-Demboski ordinance would provide a framework for Uber to become a legally recognized transportation service in Anchorage.
Many in the crowd Tuesday, angered by a perceived favoritism for the taxi industry by City Hall, urged the Assembly to adopt the Uber ordinance.
"At this point in the conversation we are not talking about transportation, we are talking about protecting a specific set of people from the marketplace," said Sam Moore, who is legally blind and uses both Uber and taxicabs to get around.
Taxicab permit owners oppose allowing Uber exemptions from codes they are already following. The fight has played out in almost all of the hundreds of U.S. cities that have seen Uber enter their markets since the company was started in San Francisco in 2009. In almost every case, Uber has eventually been allowed to operate, and in many instances – like what is being proposed in Anchorage – the operation is conditional and specific to Uber and other ride-sharing services including Lyft and Sidecar. But local cab drivers aren't happy that the ordinance could forever change the way their industry operates, and potentially take money out of their pockets.
"Where are the checks and balances for this pilot program?" asked cab driver Dayo Ajayi. "When you flood the markets you strangulate the existing business. This is not New York, this is not Chicago."
The Anchorage Taxicab Permit Holders Association has repeatedly testified against the Traini-Demboski ordinance and urged the city to hold Uber to the same rules governing cabs. One issue: Taxi permits are limited, only added by the city's Transportation Committee when need is shown. They are also expensive; transferrable permits (created before 1994) sell for more than $100,000, according to the city Transportation Inspector's Office. Some permit owners fear that allowing Uber to operate outside the current rules will devalue those permits. Twice, the ATPHA has threatened to sue if Uber is treated differently.
"Legal action is definitely a consideration," said Taku taxi co-owner Suzie Smith. "Competition is fair, but we just want a fair playing field."
Uber has grown quickly because it is easy to use: No cash is required, and it automatically sends receipts and trip costs to users via email. Ride-sharing services, also called transportation network companies, like Uber are among the fastest-growing companies in the U.S. Uber was valued at more than $17 billion earlier this year and has seen a deluge of high-profile investors. Anchorage is one of more than 200 cities served by the company.
Uber representative Bryce Bennett said the company doesn't believe it operates at the expense of taxicabs.
"In every city we operate we have grown the larger transportation pie," Bennett said. "More options are a good thing for local riders and drivers and will raise all ships during this rising tide."
Even though the ordinance passed Tuesday late night, the issue will still be far from decided. The city and Uber will still have to come to an agreement on how the pilot program might work, a process that could take weeks, according to Assemblyman Dick Traini.
"It's got a long public process, this just doesn't automatically turn Uber on in Anchorage," Traini said.