The City Council on Tuesday night, after lengthy debate and study, approved on first reading regulations for App-dispatched transit services like the popular Uber.
The ordinance, sponsored by Ken Smith and Chris Anderson, also makes changes in rules for conventional taxi companies.
In favor were Council members Smith, Anderson, Carol Berz, Jerry Mitchell, Larry Grohn and Chip Henderson. Yusuf Hakeem and Moses Freeman were opposed. Russell Gilbert abstained.
Councilman Hakeem said the new set-up was a threat to the continued viability of cab companies.
City Attorney Wade Hinton said the ordinance was an attempt to deregulate and modernize taxi service. He said there would no longer be a set number of taxi slots.
It allows an increase in taxi fares for the first time in over 20 years, he said.
Attorney Hinton said tight rules will be in place for the Transportation Network Companies (TNCs), including the requirement of at least $1 million in insurance per incident. They will be responsible for any accidents on the way to pick up a fare as well as when the passenger is inside the vehicle.
He said there would be zero tolerance for drug or alcohol use by Uber drivers.
TNC firms will pay an initial $5,000 application fee, then a $3,500 fee per year after that. Taxi companies pay much less.
There are over 22 requirements for participating Uber vehicles, attorney Hinton said. They must display a logo or decal.
The firms will be subject to annual audits.
The council plans to review the new ordinance after six months and after a year.
Councilman Anderson said many part-time people will work as Uber drivers, including "mothers for five hours a day while their children are in school, artists supplementing their income, and students for 2-3 hours between classes."