Council takes another look at Uber rules

City Councilors plan to revisit local rules that could keep ride-hailing companies like Uber and Lyft from expanding into the Sioux Falls market.

Representatives with Uber, a transportation network company that uses smartphone apps to connect people looking for a lift with independent drivers who use their own cars, told the Argus Leader last week that rules governing transportation for hire in Sioux Falls, if extended to Uber drivers, wouldn’t be compatible with the way the company operates.

Because Uber drivers are considered independent contractors, existing Sioux Falls ordinances would require them to apply for operators permits, get regular vehicle inspections, obtain independent contractor licenses, provide proof of insurance and get commercial license plates.

“We shouldn’t try to apply our existing ordinances to a system that we’re ill-devised to work with,” Councilor Dean Karsky said Tuesday during an informational meeting at Carnegie Town Hall. “Like a business with a plan, we kind of have to be open to what’s happening in the market place.”

Jim David, legislative-operations manager for the council, said transportation network companies are governed in other U.S. cities and sometimes required to pay permit fees, offer picture displays of drivers and license plate numbers to customers using their apps.

“These (companies) are self-inspected,” David said. “Within our own ordinance it’s 3,000 miles or three months, whichever is less, self-inspection and then an annual certified inspection.”

Uber also self-regulates, David said, sometimes more strictly than what Sioux Falls ordinance would require. For instance, anyone convicted of a DUI or drug related driving violations within the last seven years can’t be an Uber driver. In Sioux Falls, DUI offenders can drive cabs only after five years from a conviction. Uber also prohibits anyone with a hit and run on their record from driving. No such restriction is included in the existing Sioux Falls transportation for hire ordinances.

“Uber has across-the-board seven year background checks,” David said.

The Council’s Public Services Committee will work to draft new rules specific to ride-hailing companies in the coming weeks.

“Our market place is changing, we have a free market system. These recommendations came from Uber. This is what they’ve seen in other communities and they’re comfortable doing business this way,” Karsky said.