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Duluth to set license fee for rideshare services such as Uber, Lyft

The Duluth City Council will decide Monday night how much they should charge the likes of Uber and Lyft to do business in the city. Just two weeks ago, the same body passed an ordinance establishing the rules of the road for ridesharing services ...

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A photo illustration shows the Uber app logo displayed on a mobile telephone, as it is held up for a posed photograph. REUTERS/Toby Melville/Illustration

The Duluth City Council will decide Monday night how much they should charge the likes of Uber and Lyft to do business in the city.

Just two weeks ago, the same body passed an ordinance establishing the rules of the road for ridesharing services - also called transportation network companies - to operate in Duluth.

Establishing an appropriate fee, however, poses a bit of a challenge, according to David Montgomery, Duluth's chief administrative officer.

"Part of the issue we have right now is that we just don't know what the magnitude of what our inspection requirements are going to be because we don't know how many people are going to sign up to be drivers. Are we going to have 25 people sign up or are we going to have 300 people sign up? We just don't know yet," he said.

Of course, more drivers would increase the burden of enforcement costs.

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While the $3,500 yearly fee city administration has proposed is greater than the $1,500 per year Rochester charges, Montgomery noted that it's lower than what many other communities require for a licensing fee.

Montgomery said he suspects that the city really should be charging TNCs about $5,000 per year to cover its true oversight costs.

Nevertheless, he said: "We thought this was a good starting point."

After the first year, Montgomery said the city should have a much better handle on what it will cost to regulate an industry that's entirely new to Duluth. With that knowledge, the City Council can revisit the licensing fee in the following year.

"It's imprecise at this moment, but we'll get better information as we go through this process," Montgomery said.

At Large Councilor Zack Filipovich asked Montgomery what the city had projected in the way of TNC drivers when it settled on a $3,500 fee.

Montgomery said it was based on 50 to 75 people signing up to be rideshare drivers and remarked: "It wasn't a particularly high number."

Council President Joel Sipress thanked city administration for proposing a significantly higher fee than what had been floated originally and commented: "I think that indicates that if there are concerns that we're lowballing to assist these companies, I think this should address that."

Related Topics: TRANSPORTATION
Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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