Ann Arbor to Pursue Deals with Uber, Lyft

The Ann Arbor city council has directed city administrator Steve Powers to negotiate operating agreements with transportation network companies like Uber and Lyft. The council’s action came at its Sept. 2, 2014 meeting, after a discussion that lasted about 45 minutes.

The council’s vote on the question was 8-3 over dissent from Sumi Kailasapathy (Ward 1), Stephen Kunselman (Ward 3) and Mike Anglin (Ward 5).

The resolution sets the second meeting in October – Oct. 20, 2014 – as the date on which Powers is to return to the council with operating agreements to be approved by the city council.

The council’s Sept. 2 action comes after it rejected an ordinance change on Aug. 18, 2014 that would have required all drivers for hire to be registered with the city, to have commercial plates on their vehicles, and to maintain insurance commensurate with commercial plates. That rejected change had been recommended by the city’s taxicab board.

The absence of commercial plates on a vehicle that is observed being used for picking up or dropping off passengers would have provided a reason for a traffic stop by Ann Arbor police. At the taxicab board meetings over the last few months, representatives of the taxicab industry argued that the state statute regulating limousines already gives the city the ability to enforce against Uber and Lyft drivers.

At the taxicab board’s Aug. 28 meeting, representatives of the taxicab industry lamented the fact that they had not attended the council’s Aug. 18 meeting to advocate for regulating all drivers for hire through a city ordinance. Representatives of Uber and Lyft numbered over 50 people at the council meeting, some of whom addressed the council during public commentary time.

Ward 3 city councilmember and taxicab board member Stephen Kunselman indicated at the board’s Aug. 28 meeting that there might be a possibility that one of the five councilmembers who voted against the ordinance at first reading on Aug. 18 might bring it back for reconsideration.

On Aug. 18, the 5-5 vote totaling 10 on the 11-member body stemmed from the absence of Margie Teall (Ward 4). Voting for the regulation of all drivers for hire were Kunselman, Sumi Kailasapathy (Ward 1), Jack Eaton (Ward 4), Chuck Warpehoski (Ward 5) and Mike Anglin (Ward 5). Voting against the change were mayor John Hieftje, Sabra Briere (Ward 1), Jane Lumm (Ward 2), Sally Petersen (Ward 2) and Christopher Taylor (Ward 3).

At the council’s Aug. 18 meeting, during deliberations on the rejected ordinance change, Sabra Briere (Ward 1) indicated that she’d concluded as early as April of this year that an operating agreement – instead of a local ordinance – would be the right approach. Christopher Taylor (Ward 3) indicated he had been working with Briere to come up with that kind of approach.

The elements to be included in the operating agreement were specified in an attachment to the resolution read originally as follows:

Operating agreement principles include:

• Company will provide a minimum of $1M in liability insurance coverage for the driver, vehicle and passengers and any other injured parties, from the moment a driver is linked with a passenger to the moment the passenger releases the vehicle.
• Company will conduct the following at no cost to the city: background checks for each driver-applicant prior to allowing their participation. This background check will include a criminal background check, including a check for multiple relevant jurisdictions; a review of the applicant’s driving record; a mechanical inspection of the vehicle by a licensed inspector. The results of this data collection will be made available to the City for any driver / vehicle combination approved for participation in the company.
• Company will not allow participation by a driver / vehicle combination if the driver has any felony conviction; any conviction for DUI; more than 2 moving violations in any calendar year or more than 4 moving violations in a six-year period, with no more than 4 accumulated points in any calendar year.
• Company shall ensure that all driver vehicles pass an annual, mutually agreeable safety inspection conducted by a licensed mechanic.
• Prior to participation in the program, drivers shall go through a driver-education program that provides training in customer service and improves familiarity with local streets and local traffic conditions.
• Drivers shall not accept passengers except through the ride-sharing mechanism provided by the Company.
• Company will provide requested data to the City about accidents and incidents with passengers, as well as a report on customer satisfaction and safety ratings.

During the Sept. 2 meeting, an amendment was made that would restrict the felony convictions referenced in the principles to just those that are relevant for drivers for hire.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.