City finalizes new regulation changes for ride-sharing services
With more Lyfts and fewer taxi services in town, Mitchell's taxi regulation policies evolves to keep up with the changes.
After several local Lyft drivers approached the city of Mitchell about establishing a specific taxi ordinance for Transportation Network Companies (TNC) such as Lyft, City Attorney Justin Johnson began drafting changes to help streamline the application process for TNCs. The newly adopted ordinance changes make becoming a Lyft driver more convenient and affordable, as the previous taxi ordinance — which applied to both TNCs and traditional taxi businesses — required a $50 application fee, along with a $50 inspection fee, which was annually renewed by the City Council.
Under the new ordinance approved Monday by the Mitchell City Council, there is an annual $500 flat fee for Lyft drivers to operate, which will be paid by Lyft's corporate offices. Tim Goldammer was one of the local Lyft drivers who spearheaded the efforts of getting the city to adopt an ordinance for TNCs. The app-based rideshare service is the lone rideshare taxi company in the city.
“Before this ordinance change, Mitchell hadn’t recognized TNCs as a different entity separate from traditional taxi businesses like many major cities have been doing,” Goldammer said. “And taxi companies are different than TNCs. I think the city did the right thing here, and acknowledged TNCs and taxi services are evolving.”
Since Lyft’s arrival to the community in 2017, the City Council approved seven drivers in its first full year of operation. That number has now climbed to 14. According to Johnson, the city doesn’t have a cap on the amount of Lyft drivers it allows. Despite the new application process for aspiring Lyft drivers, Goldammer acknowledged there are some worries about the volume of drivers saturating the taxi market.
“I think most of the Lyft drivers in town are happy about the changes, but we’re all kind of running our own taxi business, and we’re now inviting people to do this at no cost,” Goldammer said. “There is a real fear that the number of Lyft drivers are going to explode on the weekends, because it’s easier to become one now. But I think it will be a very good thing in the long run for the community and Lyft.”
The ordinance also included changes to the application process for traditional taxi businesses, also known as Vehicle For Hire Companies (VFHC). E-Z Ride Taxi and Lori’s Lift are the two local taxi businesses competing with Lyft. (Representatives of both taxi companies did not respond to a request for comment prior to the publication of this article.)
Johnson said the elimination of the vehicle inspection process was a unified change in the ordinance that applies to both Lyft and traditional taxi companies. While he had communication with Uber through the process, Johnson said he didn’t get any impressions the rideshare taxi company is looking to get into Mitchell.
The new VFHC application fee is $100 for a taxi operation with one vehicle. For traditional taxi operations with more than one vehicle, it now costs $50 for each additional vehicle. In addition, taxi businesses will be able to add enough vehicles to reach a maximum rate of $500, Johnson said, which is one way he tried to find a compromise that set a level playing field for TNCs and taxi businesses.
“With the ordinance change, we tried to keep the playing field as level as possible, which was a challenge to balance, but I feel it was a good solution for all,” Johnson said in an interview with The Daily Republic. “There were some things we as the city were limited by state law to make things entirely uniform between the VFHC and the TNCs, more specifically, the insurance side of things.”
Despite Johnson's attempt to explore avenues regarding insurance, the drastic price differentiation of insuring vehicles sets up more challenges for local taxi companies. However, according to the insurance regulations for Lyft and TNCs, the driver and vehicle owner has options to insure with various companies, and some companies offer insurance for Lyft-specific services for as little as $15 per month.
Goldammer said he and most of the local Lyft drivers typically make themselves available for Lyft rides during the evening hours, some solely on weekend nights. Thus, Lyft drivers are rarely available during the weekday morning hours. With the typical Lyft driver schedules, Goldammer said it shows there is a demand for both, local taxi businesses and Lyft.
“Lyft doesn’t have a good driver core during the day, so I think there are still and will be services that taxis provide that Lyft doesn’t want to engage in,” Goldammer said. "There is still a marketplace for traditional taxi services in Mitchell.”
While adding more Lyft drivers to the community adds more competition among fellow Lyft drivers, for Goldammer, it’s not about the money. Instead, Goldammer said getting people home safe and reducing drinking and driving has more importance.
“I don’t do it for money,” he said. “It’s super beneficial for a town like Mitchell to have, because you can go from having one to two taxis during the week to having 10 more available for the weekends, which is something you can’t do with the prehistoric taxi business model.”