Rideshare services such as Uber and Lyft likely soon will be coming to Duluth.
By a 7-1 vote - with 5th District Councilor Jay Fosle alone in his dissent and At Large Councilor Elissa Hansen absent - the council adopted an ordinance, laying out new rules for transportation network companies.
Dean Hanson, operator of Yellow Door Taxi, suggested transportation network companies should be held to the same standards as local taxicab businesses and charged identical fees. He told councilors that he felt he was being set up to fail by the ordinance passed Monday.
"To allow competition to come in, undercut me and not have the same amount of regulations. I don't really know what you expect is going to happen. Me and all my drivers, we're going to be out of business. I'm telling you that right now," Hanson said.
At Large Councilor Noah Hobbs, the chief author of the ordinance, thanked Hanson and other local taxi representatives for sharing their concerns.
He said the city had a couple of other options it could have exercised.
"We could have regulated this and said: No, we're not going to have these industries here and operating in Duluth. Or we could have not regulated them at all, as was the case in St. Cloud and Mankato, where transportation network companies are operating with zero fees, zero inspections, no quality controls to provide for the safety of riders. That gives them a significant advantage over the traditional established cab industry," Hobbs said.
But he advocated a third option, with the recognition that transportation network companies probably would be coming to Duluth, like it or not.
"We're requiring background checks, TNC cars have to be four years younger than our cabs have to be. And we will have inspections by ASE-certified mechanics," Hobbs said, noting that TNCs would actually need to carry more insurance than cabs.
"We put in a lot of work to make sure that we will have a level playing field that's not tilted one way or the other. So there's no unfair competitive advantage," Hobbs said.
But Fosle said he didn't want to risk harm to local taxicab operations.
"I for one don't want to hurt any business, so I'm going to vote against this tonight," he said.
Duluth City Council President Joel Sipress expressed several misgivings about the arrival of transportation network companies in Duluth but said he would support the ordinance out of recognition for Hobbs' efforts to craft a policy that addressed many of his concerns.
It will take 30 days for the ordinance to officially go into effect, meaning TNCs could begin operating in Duluth come April 27, just days before the Homegrown Music Festival.