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Originally published Tuesday, January 28, 2014 at 4:50 PM

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Guest: Proposed city rules for Uber, Lyft kill innovation

Seattle leaders seem content to stifle innovation and competition to benefit special interests with the proposed rules for non-taxi services, writes guest columnist Gary Shapiro.

Special to The Times

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INNOVATIVE transportation services such as Uber, Lyft and Sidecar have sprung up in cities across the U.S., transforming the way we get around. These services are fast, convenient and well-suited to modern U.S. cities looking to increase transportation options while reducing the number of cars clogging city streets.

But special interests in Seattle are pushing back, intent on sacrificing residents’ needs by maintaining the status quo. In December, the Seattle City Council drafted regulations that would effectively run these popular app-based car services out of the city.

Seattle’s draft policies, which are scheduled to be discussed by a council committee Thursday, blatantly favor the established cab industry. Under the new rules, non-taxi services would have to pay an annual license fee of up to $50,000; they would not be allowed to operate more than 100 cars in the city; and their cars would have to undergo a 19-point inspection.

But because they’re still less regulated than traditional taxis, the cars would be allowed to operate only up to 16 hours a week. Non-taxi drivers who pick up passengers who hail them in the street would face a $1,000 fine. These rules are bad for non-taxi drivers and anyone who wants more choices and competitive pricing.

Meanwhile, the city’s taxi service is far from exemplary. Seattle suffers from a chronic shortage of taxis, and the city’s rules allow for only 50 additional licenses citywide — hardly enough to fill the gap.

This system penalizes Seattleites and is bad for business. Nearly 12,000 Uber users in Seattle have petitioned the council to enact competitive rules that allow them to use the services they like best.

Given that 66 percent of online adults own smartphones, it’s more important than ever that cities like Seattle offer the transportation services customers demand — services that are integrated with a mobile device.

Seattle should challenge existing transportation providers to improve their customer service and make the city a more livable place. Instead, leaders seem content to stifle innovation and competition to benefit special interests.

Uber, launched in 2010 and now operating in nearly 70 cities worldwide, has won uphill battles against entrenched industry and outdated policies in places like New York City, Chicago and Washington, D.C.

The service is fast, convenient for cities like Seattle. On-demand ride-sharing company Lyft is now in 20 cities nationwide, and started doing business in Seattle precisely because it believes the city values innovation and technology.

The City Council’s proposed rules would force Lyft to shut down in Seattle. Sidecar, now in six cities with plans to expand, has also expressed disappointment in the attack on innovation.

Seattle is filled with what I call ninja innovators. Time and again, the city has proved itself as a breeding ground for forward-thinking, innovative and game-changing businesses., Microsoft, Nintendo and others have thrived in Seattle as a result of their creative thinking and mission-oriented strategies.

Seattle riders, you deserve easy access to innovative, timely transportation services that let you traverse your city in style. Sedan and other non-taxi drivers in the city deserve policies that create a truly competitive system, not the monopoly that exists now.

Shutting out new services by brandishing outdated policies would harm the city’s reputation. The City Council should think long and hard about the message it’s sending about the city and its values, before members vote on whether or not to finalize these rules.

Gary Shapiro is president and CEO of the Consumer Electronics Association and author of the book “Ninja Innovation.” His views are his own. On Twitter @GaryShapiro

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