Uber, Lyft offer to pay state in return for changes to regulations | Local

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SALEM — Trying to placate environmental groups over possible changes to the state’s “clean fuels” carbon-reduction program, Oregon lawmakers are considering an unusual pact with ride-hailing giants Uber and Lyft in a proposed $8.2 billion transportation funding package.

Uber and Lyft are offering to tack on a 50-cent surcharge to every ride they provide in Oregon, with the money funding a $5 million-a-year rebate initiative for Oregonians to buy electric vehicles.

But in exchange, the two firms want to revive a bill that would let only the state — not individual Oregon cities — regulate them. That idea, highly unpopular with labor-friendly Democrats, died in the House earlier this session.

Some cities, including Eugene and Springfield, insist that ride-­hailing companies comply with local taxi-regulating ­ordinances. Uber and Lyft consider it costly and unnecessary to follow such local restrictions. Uber has declined to set up service in Eugene and Springfield, after failing in its challenge of the local rules.

The desperate wheeling and dealing with Uber and Lyft is symptomatic of a big problem for state lawmakers. With slightly more than three weeks left in the session, key disagreements remain unresolved in transportation package talks that have become strained and messy, ­multiple lawmakers say.

Legislators still are fighting about the size of the proposed 10-year, $8.2 billion tax-and-spend package , which projects to spend the money on, and what new oversight to impose on the Oregon Department of Transportation.

That’s before you get to Republicans’ long-standing demand to alter environmentalists’ cherished “clean fuels” program in exchange for any GOP votes. That resurrects the fight that sunk a proposed transportation funding package in the 2015 Legislature.

Meanwhile, ­outside groups, including the state’s largest public employee union, SEIU Local 503, have threatened to refer the transportation package to voters if lawmakers pass it. That’s given some ­lawmakers cold feet about casting a difficult vote on a multibillion dollar taxes-and-fees increase that Oregon voters ultimately might reject.

Consensus elusive

Sen. Lee Beyer, a Springfield Democrat and key negotiator of the transportation package, was exasperated on Thursday when discussing the lawmakers’ inability to reach consensus.

“Every problem I fix, another one crops up,” he said. “Lawmakers keep telling me, ‘I don’t like this piece, I don’t like that piece.’ And it doesn’t stop.”

Beyer said he still hopes individual lawmakers ultimately would find more good than bad in the package and pass it before the session legally must end on July 10. But the outcome remains unclear, he acknowledged.

“I’m almost ready to say, ‘Just vote on it and see what happens,’  ” Beyer added. “I’m ready to be done.”

Gov. Kate Brown appeared to sound the alarm at a press conference this week as well.

“I need the Legislature to deliver on a (transportation) package, and it needs to happen quickly,” Brown said, adding that she’s stepped up her lobbying of lawmakers and interest groups.

A transportation spending bill has been among Brown’s top priorities this session. Failing to bring a package across the finish line for the second long session in a row could hurt her 2018 re-election efforts.

Brown said that it’s too early to say whether she would call a ­special ­session to address ­transportation if ­lawmakers are unable to break through before the ­regular ­session ends.

New road to “clean fuels”?

The Uber and Lyft ­surcharge concept emerged as Beyer and other key negotiators were scrounging for ways to mollify ­environmental groups about changes to “clean fuels” that probably will be necessary to gain GOP votes and pass the transportation package.

Those GOP-backed proposed changes are mainly designed to place a hard limit on the size of the financial subsidy for producers of lower-carbon transportation fuels and how much the program would drive up gas prices at the pump for consumers.

But ­environmental advocates virulently oppose big changes to their hard-won program. And they have the backing, for now, of House Speaker Tina Kotek and House Democrats.

Beyer said a new rebate program for ­electric vehicles in Oregon “could get us to the carbon emission reduction goals of the ‘clean fuels’ program in a different way.”

“When it comes to policy, I’m willing to be pragmatic,” he said.

Electric vehicles still represent only 1 percent of car sales nationwide. In the face of low gas prices in recent years, ­federal and state cash ­incentives have proved key to ­boosting those sales.

Concept losing speed

Ride-hailing ­companies, meanwhile, have struggled to enter Oregon markets.

Uber operates in ­Portland and its suburbs and launched in Salem earlier this month. Lyft operates only in Portland, Beaverton and Salem.

But Uber pulled out of Eugene-Springfield in April 2015, objecting to the long-standing taxi rules city officials said applied to the company and its drivers. Eugene oversees taxi and ride-hailing services in Eugene and Springfield; the ride-hailing companies’ proposed state law would override those rules.

The 50-cent surcharge would raise an estimated $5 million a year if the ride-hailing services operated statewide. That’s enough for 2,000 subsidies of $2,500 for buyers of new electric vehicles, distributed on a first-come, first-served basis.

But the concept is already losing speed.

The surcharge concept is infuriating organized labor. “Uber’s meddling in the Oregon ­Legislature’s transportation funding process is a thinly veiled attempt to buy off our state in exchange for less regulation,” said Tom Chamberlain, president of AFL-CIO, a coalition of private- and public-­sector unions, in a prepared statement Friday.

“It is an open door for Uber to earn massive profits at the expense of working people.”

Uber and Lyft are anathema to labor unions largely because they classify their drivers as independent contractors, not regular employees. That means the companies don’t have to pay payroll taxes or provide mandatory minimum wages and benefits, or workers’ compensation insurance.

Uber controversies

Rep. John Lively, a Springfield Democrat, said he likes the idea of a new rebate to subsidize electric vehicle sales. But he won’t back a ­statewide pre-­emption on ride-­hailing rules to get there.

“I don’t know how far $5 million a year goes,” he said, referring to the rebate. “I’m very concerned about Uber’s behavior as a company; I don’t like what I read in the news,” he added.

Uber has faced criticism for its corporate culture, its treatment of its drivers, and its use of software called “Greyball,” which let its drivers identify and avoid local regulators who were trying to spot Uber drivers in jurisdictions where Uber had failed to comply with taxi rules. “I really don’t want to condone all that,” Lively said.

Meanwhile, for environmentalists, an ­electric vehicle subsidy isn’t enough to diminish their opposition to possible “clean fuels” changes.

Angela Crowley-Koch, a lobbyist for the Oregon Environmental Council, said her group would welcome a new electric vehicle rebate program and is “agnostic” about how lawmakers might fund it.

But, she added, “no amount of goodies in the transportation package are going to make us OK with rolling back ‘clean fuels.’  ”

“  ‘Clean fuels’ is about a lot more than electric vehicles,” Crowley-Koch said, referring to biofuel and other alternative fuel producers who can also be subsidized under the program.

Squabbling over package

At their last public meeting on June 8, ­lawmakers on the Joint Transportation ­Committee were unable to stop squabbling over the transportation package.

Some were concerned about a proposal that would lower the package’s gas tax increase from 14 cents per gallon to 12 cents and phase that hike in over an extra two years, meaning less money upfront for ODOT and local governments for maintenance and construction.

“I don’t know how this fits with the true road and bridge needs that we’re trying to address,” Lively said. “If I’m going to support (the package), I have to believe that we’re making some progress” in ­reducing the state’s road maintenance backlog.

Some thought a new idea requiring a cost-benefit analysis on all ODOT projects costing more than $25 million were too permissive. But many others thought it was too strict.

“I’m a little bit bewildered by this,” Beyer said, in response to the disagreement. “Throughout this process, members of this committee and the public said we needed more accountability.

“But now that we have a proposal, it seems like everyone is saying, ‘We don’t want to do this,’  ” he said.

Responding to the tension in the committee, Rep. Greg Smith, a Heppner Republican, said it was “natural” for lawmakers to get a little “testy” in the final weeks of the session as the transportation package nears its final form.

“Lots of good work has been done here,” Smith said. “Let’s get it across the finish line.”

The joint committee hasn’t had a meeting in public since.

Follow Saul on
Twitter @SaulAHubbard . Email saul.hubbard@
registerguard.com
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