- Associated Press - Tuesday, November 3, 2015

SIOUX FALLS, S.D. (AP) - City Council members in Sioux Falls have approved rules to enable ride-hailing services such as Uber to operate in the city.

The decision isn’t popular with taxicab and limousine drivers who feel they aren’t being treated fairly. But Councilman Dean Karsky says it fosters free enterprise.

The council on Monday voted 7-1 to establish a separate category in the city’s vehicle-for-hire ordinance and a unique licensing system for services that use cellphone apps to connect drivers with ride-seekers.

Those drivers won’t need an individual city license like traditional cabbies, but a service such as Uber will need a $1,500 license to cover anyone driving for them. They also must do background checks on drivers, and would have to submit license numbers for drivers to the city once a month for oversight purposes.

The new rules also remove a requirement that drivers-for-hire get their vehicles inspected yearly by a certified mechanic, though self-inspections would be mandatory.

Tallie Kinsley, co-owner of Yellow Cab, said that having different sets of rules for traditional taxi companies and ride-hailing services creates an unfair advantage.

“It’s detrimental to my business,” Kinsley said. “They are competing directly against us in our industry without having to follow the rules.”

Uber spokeswoman Jaime Moore said the new rules open the door for services to come to Sioux Falls, but said there’s no timeline at this point. The company said earlier this year that previous rules could prevent it from launching in the city.

Moore said in an email that Uber looks “forward to continuing to work with the city.”

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