Ridesharing bill would preempt Portland plans for driving fees

A bill in Salem would have major consequences for one of Portland’s top transportation priorities.

Portland officials are concerned about environmental and congestion impacts from transportation network companies (TNCs) like Uber and Lyft, and have recently set out to find ways to mitigate some of those impacts with transportation-related fees.

The City of Portland also charges a $.50 fee per TNC ride that the Portland Bureau of Transportation uses to fund programs like PDX WAV, which helps people with disabilities more easily access on-demand ride services. This surcharge also helps fund a PBOT ombudsperson program for independently handling disputes between people who drive for TNCs and the companies.

But Senate Bill 1558, introduced to the Oregon Senate last week by the Joint Transportation Committee and scheduled for its first hearing in that committee tomorrow, could undermine these efforts. One source close to the issue reached out to us via email to warn: “I think the transportation community should be very concerned about its effects.”

PBOT Interim Communications Director Hannah Schafer told us this morning she doesn’t think the bill will make it out of committee. While she didn’t if PBOT lobbied against it, Schafer did express some concerns. “The way that it was redefining rideshare could’ve had all sorts of implications for drivers,” she commented.

SB 1558 would create new regulations for TNC and food-delivery companies. It would require them to meet specific targets for the percentage of service miles provided by zero-emission vehicles, prohibit per-person limits on rebates available under electric vehicle rebate programs and preempt local governments from imposing per-trip charges unless the money generated from those charges would go toward regulation of rideshare or food delivery services or funding EV infrastructure.

It would appear to be environmentally beneficial to require Uber and Lyft to electrify their fleets. While Uber and Lyft have been touted as efficient alternatives to owning personal vehicles, studies have shown that they actually might be worse for the environment. In response to these concerns, TNC companies have announced zero-emissions goals that would theoretically be met by operating only electric vehicles.

But in order to make this happen, people who work for these rideshare companies may suffer.

Right now, the Oregon EV Rebate program restricts businesses from earning rebates on more than 10 electric vehicles per year. If this were to be eliminated under this bill, businesses like Lyft and Uber could receive rebates on an unlimited amount of EVs they purchase for use in Oregon.

Both Uber and Lyft operate car rental programs that people who drive for these rideshare companies can use instead of driving their personal car, but the cost isn’t cheap. Contract employees, who are already making precarious wages, pay about $200 a week to rent one of these cars, and subsequent earnings are not guaranteed.

If TNCs were incentivized to purchase electric vehicles to rent out so they could earn more money in rebates, people driving for these platforms may be encouraged to participate in this rental option with no assurance of financially stability. While operating a rental fleet might be a good idea to reduce the amount of personal vehicles that people own and transition to electric, there need to be more regulations that ensure employees would be compensated fairly.

On top of that, SB 1558 would also restrict Oregon’s ability to charge rideshare and food delivery companies fees related to congestion pricing efforts. This would interfere with a key goal in PBOT’s proposed Pricing Options for Equitable Mobility (POEM) plan, which seeks to create new fees on driving that will reduce car use and raise revenue.

National studies have shown that one of the reasons rideshare companies cause so much traffic congestion is because of “deadheading,” which refers to the time a person driving a car for Uber or Lyft spends without a passenger in the car, circling the city for places where they might get a customer.

Since these TNC companies don’t have to pay drivers for the time they spend trying to find passengers, they actively encourage this practice by flooding the driver supply so customers can snap their fingers and get a ride. This wastes a lot of gas and space on the street. It also wastes time for people driving for these companies, who spend large swaths of unpaid time on the road burning oil.

If PBOT charged a new fee for using TNC or delivery companies, as is being proposed in the POEM plan, this could encourage people to seek alternate means of transportation, and the revenue generated from this toll could go into funding transportation projects. SB 1558 would severely restrict the benefits of any fee system for such services, and also limit what the current $.50 surcharge can be used for.

One example of a program that could be used to help limit congestion and carbon emissions caused by “deadheading” is Seattle’s Transportation Network Company Minimum Compensation Ordinance. This ordinance requires companies like Uber and Lyft to pay drivers using a fee structure that takes into consideration the time they spend waiting for customers. This disincentives saturating the market with people who are driving for TNCs, helping both the employees and the environment.

Though sources say the TNC-related provisions are likely to be stripped out of SB 1558, the fact that these issues were under consideration at all indicates where future conversations might lead.

Hannah Schafer in PBOT’s communications office says they’ll continue to track discussions in Salem about TNC regulations, especially when certain bills may impact the agency’s bottom line and/or transportation and climate change goals .

“We have a lot of experience and knowledge on this topic,” Schafer says. “We’ll continue to keep an eye on things going forward.”

SB 1558 is the first item on the agenda for Thursday’s 8:00 am meeting of the Joint Transportation Committee.

Correction: a previous version of this story said that the PBOT ombudsperson program provides free legal council. It’s actually an independent liaison and dispute resolution program and PBOT cannot provide legal advice.