Portland’s sees big gains in transportation market freedom
But a few serious problems remain.
The bump in Portland’s score largely was on the strength of the decision made earlier this month by the City Council to pass permanent rules allowing transportation network companies to operate. That contentious 3 to 2 vote has, in some ways, placed TNCs and taxis on an equal regulatory footing. For that, the council should receive plaudits. But two recent developments endanger the gains the city made in 2015.
The first concern stems from the Oregon Supreme Court, which recently found that taxi drivers are employees, not contractors, under state law. The decision will increase both the tax burden and the benefits liability associated with taxi operation in Oregon: effectively raising the cost for all consumers. Understandably, taxi interests immediately called for TNCs to be subject to similar rules.
The second troubling development actually stems from 175 miles north of the Rose City, in Seattle. There, the city council voted unanimously to provide both TNC and taxi drivers with the ability to bargain collectively. The impact of that ordinance, which almost certainly will face judicial challenge, remains difficult to appraise. Even if it stands, it’s unclear whether it will be a mere administrative headache or the start of a national trend toward unionization of similarly situated contractors. Should Portland follow Seattle’s lead on collective bargaining, it would erect barriers to entry that could threaten the popularity of TNC operations, both for customers and for drivers.
But while the specter of these threats loom large, Portland’s most significant ongoing shortcoming can be found in its regulation of limo services. The city imposes both a long minimum wait time and a minimum fare that’s 35 percent higher than for taxis. Those problems are compounded by higher-than-average insurance requirements for limos. The result is that Portland scores a dismal “F” grade in limo regulation.
The Portland City Council clearly has a sense of the benefits of market liberalization, or it wouldn’t have acted to improve the TNC and taxi markets earlier this year. While limos represent a far smaller portion of the for-hire market, they shouldn’t be excluded from the transportation renaissance.
Portland is a national success story. It corrected course and embraced a new industry in the face of pressure from both incumbent industries and well-meaning paternalists. In particular, its willingness to address taxi regulation at the same time as TNC regulation is something that should be replicated in other cities still grappling with how to provide a level playing field in this fast-changing environment.