Vermillion council postpones overhaul of ride-hailing rules after extended debate

Vermillion — The Vermillion City Council voted July 21 to postpone indefinitely Ordinance 15-36, a proposed amendment to Title 11 that would clarify how the city regulates taxis, transportation network companies (TNCs) and the umbrella category “vehicle for hire.”

City planner Alex (last name not specified in the transcript) told the council the draft ordinance removed redundant language and used the umbrella term “vehicle for hire” to cover taxis and TNCs alike, but staff later decided parts of the revised text were substantive and should be reconsidered. “We needed to maybe better clarify that for the council’s consideration,” Alex said during the discussion.

The council’s question-and-answer period focused on whether the city should continue to regulate TNCs locally when companies such as Uber and Lyft perform background and insurance checks at a national level. Councilor Genewijn said she was “curious” about the rationale for not regulating TNCs locally and later moved to postpone the ordinance indefinitely so staff could return with more analysis. Councilor Toller seconded the motion. The motion carried.

Supporters of postponement cited the extent of changes — which staff said could convert the pending second reading back into a first reading because of substantive edits — and indicated the topic could be examined in an educational session before returning to a future council meeting. Alex told the council staff had surveyed other South Dakota cities and found mixed approaches: six cities regulate TNCs while five do not; Vermillion’s draft landed “on the lighter side of regulations” compared with peers.

Several council members asked whether routine checks required by TNC companies (insurance and background reviews) would satisfy Vermillion’s goals if the council chose not to adopt local regulation. Councilor Price said: “If TNC companies are regulating their drivers, I think it would be fine for our ordinance to say that we don't need to regulate them as long as their company is regulating the certain particular things that we care about.” Other councilors voiced concern about leaving the city without local authority over emerging providers.

By postponing indefinitely, the council removed the item from the immediate agenda but left open the option for staff to bring a revised draft back as a first reading. City staff recommended postponement to allow time for clarification or to prepare a new draft if the council decides not to regulate TNCs locally.

The motion to postpone was carried by voice vote; no roll-call tally was recorded in the meeting minutes.

The ordinance had been scheduled as a second reading on the July 21 agenda. Staff said the amended draft would change publication and procedural steps if the text returned substantially altered.