LA set to launch long-planned overhaul of taxi regulations

LOS ANGELES (CN) — The Los Angeles City Council voted Tuesday to completely rewrite the city's taxi regulations in an effort to level the playing field with ride-hail apps like Uber and Lyft.

Since 1990, LA has capped the number of taxicabs allowed to operate at 2,364. In a city of just under 4 million people, that cap led to high prices and opened the door for ride-hail services like Uber and Lyft to establish themselves as cheap, convenient alternatives.

"Many people saw that competition as unfair, while some saw it as innovative," wrote Eric Spiegelman, president of the LA Board of Taxi Commissioners, in a memo to the City Council. "We saw it as both. The new rules take many cues from the business practices of Uber and Lyft, both in terms of innovations that taxis should adopt, and unfair practices that we should prohibit."

The new regulations, some seven years in the making, will transform the city's taxi fleet into something resembling a fleet of Ubers, utilizing technology and a more flexible pool of drivers. Under the new code, LA will move from a closed franchise system to an "open entry licensing system," meaning that licensed taxi companies will be able to put as many cabs on the street as they want.

Also, cab companies would no longer be required to paint their cars a distinct color and drivers will instead place stickers or magnets on their cars to let customers know they are taxi drivers. The city will set a minimum fare, which both taxi cabs and ride-hail companies will be subject to.

"If a taxi app wants to offer discounted fares, it may," wrote Spiegelman, "But the app provider will have to eat that discount, and make sure that the driver gets the full, minimum fare set by the city."

Both taxis and ride-hails will be allowed to use "surge pricing," the practice of raising prices in times of high demand or low supply, thus incentivizing more drivers.

The city will track every taxi cab on a centralized computer system, which will help assure that every neighborhood has the right number of cars. It will also make sure that the two apps for hailing taxi cabs in LA — Curb and Flywheel — both have access to the city's entire fleet.

Another key change: when a cab company adds cars to its fleet, the new vehicles must be zero-emission.

Spokesmen from Uber and Lyft did not respond to requests for comment.

The Taxi Workers Association of Los Angeles objected strongly to the new ordinance.

"It would be unconscionable to move forward with an untested and unproven regulatory scheme without addressing vital driver concerns regarding wages and working conditions," the advocacy group wrote in a letter to the City Council. The group warned the new ordinance would "uberize the taxi industry," increase the number of cabs on the road tenfold, and lead to lower wages for drivers.

The City Council passed the new rules unanimously and without discussion.

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