Upstart ride-sharing companies Uber, Lyft and Sidecar have muscled their way onto the streets in nearly 30 U.S. cities over the past three years, luring traditional taxi customers with the promise of a car available at the tap of a smartphone. The cab industry has accused the startups of everything from circumventing regulations to shoddy safety oversight. The complaints have largely been dismissed as sour grapes from a disrupted business.
That’s starting to change. On March 17, Seattle became the first city in the nation to impose limits on ride-share availability. A city-council measure will hold Lyft, Sidecar and UberX, the company’s lower-cost service, to no more than 150 vehicles on the road at one time. Today, UberX alone has over 1,000 drivers prowling Seattle’s streets.
“We wanted to buy ourselves time to figure out how to adapt regulations,” says Seattle councilwoman Sally Clark. “Until we get more data, we’re going to have to limit them for a little while.”
Other jurisdictions may follow Seattle’s lead. Nashville is weighing a plan to regulate ride-share services like livery cabs, while Georgia lawmakers have proposed charging the companies fees to operate in the state. Similar measures are under consideration in Maryland, Colorado and Chicago. Miami and Portland, Ore., meanwhile, have refused to let the ride-share companies operate until they work out a regulatory framework. “All we’re saying is these guys are taxi companies,” says John Boit of the Taxi, Limousine and Paratransit Association, which is pushing back against the startups. “If you want to be a taxi company, abide by the company rules in the city in which you operate.”
To head off more regulations, Uber and Lyft recently announced plans to expand insurance coverage of their drivers. But that’s unlikely to mollify local lawmakers, who now have the fast-growing sharing economy more squarely in their sights.
This appears in the March 31, 2014 issue of TIME.
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