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City Beat: Council puts brakes on Uber rules

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Ride-sharing company Uber will have to slow its plans to enter the Queen City market, but it earned a small victory at the March 21 Springfield City Council meeting when council voted to table new regulations on its services.

An ordinance drafted to protect the public while allowing ride-sharing services such as Uber to operate in town was debated heavily by council members before public speakers weighed in.

“I do not believe that it is council’s intent to prevent Uber from coming to Springfield, but I do want to be clear that we would not be able to operate in Springfield under the proposed ordinance,” Uber Missouri General Manager Sagar Shah said at the meeting.

Before tabling by a 7-2 vote, council approved three amendments on the 35-page bill addressing Uber and other transportation-network companies.

Councilman Craig Hosmer moved to increase insurance requirements for drivers; Councilwoman Kristy Fulnecky called for removing a rule prohibiting conceal-and-carry permitted drivers from carrying a gun; and Councilwoman Jan Fisk proposed moving the minimum age of drivers to 21 from 18.

Other requirements in the measure include requiring transportation network company drivers to obtain a permit from the city’s director of finance, prohibiting licensed taxicab drivers from operating TNC vehicles and delivering all lost or misplaced materials in TNC vehicles to the police department.

Shah said the ordinance, which also would update requirements for taxicab and airport-limousine permits, would harm Uber drivers, most of whom work part time for extra money.

“The model really relies on a lot of people doing a little bit at a given time,” Shah said, adding driver backgrounds vary greatly. “This includes students who might have time between classes, parents who might drop their kids off at school and sign on to Uber during the day and school teachers looking to add some additional income in the summer months.

“So for this model to be successful, the burden of regulation really should be put on the company and not the driver.”

With operations in over 300 cities, including Kansas City, St. Louis and Columbia, Uber seeks to enter new Missouri markets in Jefferson City, St. Charles and St. Joseph, as well as Springfield. First launched in 2009, the company connects riders and drivers through its app – so no street hailing, and drivers own their vehicles.

Shah said 28 states have passed laws allowing the company to execute its business model. Legislation working its way through the Missouri General Assembly is less restrictive and supported by Uber.

Four public speakers expressed support for Uber.

Deborah Cohen, director of meeting and convention sales for the Branson/Lakes Area Convention and Visitors Bureau, said over 20 percent of the area’s convention visitors fly in through Springfield-Branson National Airport, and an Uber option could aid CVB group business.

“We believe that these modern transportation network companies would bring more options to our customers and improve our success for booking more meeting and conventions for the Branson area and Springfield,” Cohen said. “We are hearing this request more and more from our customers.”

Springfield attorney Britton Jobe, a partner with Neale & Newman LLP, said young professionals expect Uber’s services in a city.

“I’ve been practicing law in Springfield for six years – it is difficult to exaggerate the importance to people in my generation to talent attraction and retention efforts in this community,” he said.

Councilman Craig Fishel moved to table the ordinance for further review after hearing Shah and the public speakers. Mayor Bob Stephens and Councilman Hosmer voted against tabling the measure.

Kraft financing
Council offered a rare show of solidarity for a tax-abatement project when it voted unanimously in favor of a Chapter 100 industrial revenue bond plan financing up to $36 million in equipment purchases by The Kraft Heinz Co. (Nasdaq: KHC).

The funding plan, which includes a property tax break valued at roughly $750,000 over 10 years, propels Kraft’s plans for eight new productions lines at its Springfield manufacturing plant, 2035 E. Bennett St. The taxable value of the new equipment over the next decade is roughly $1.5 million, but through the Chapter 100 plan Kraft will cover half that amount in payments in lieu of taxes.

The new manufacturing lines, designed for additional production of Kraft Macaroni & Cheese and Kraft Singles, are expected to create 109 new jobs with an average pay of $48,000 per year.

“We compete nationally and internationally for manufacturing jobs,” Councilwoman Fulnecky said. “There’s not any risk to the city, and I want to thank Kraft for investing in our community.”

Kraft officials selected the Springfield plant over others for the new lines and associated jobs. Under the plan, the city will issue the bonds to pay for equipment, which is estimated to cost $33.2 million, and Kraft will buy the bonds. The city will lease the new lines back to Kraft for 10 years with lease payments applied to the principal and interest on the bonds. Because the city will own the equipment for 10 years, Kraft can sidestep a portion of the taxes.

Hosmer, who has been a vocal critic of tax abatements for student-housing projects, affirmed the plan as a correct use.

“It would be healthy if we looked more at abatements that create jobs instead of apartment complexes,” he said. “This is a good use of the abatement tool.”

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