Seattle will issue a ceast-and-desist letter to app-based transportation startups like UberX, Lyft and Sidecar if an agreement between the companies, taxi drivers and city leaders cannot be made by the end of May.

In an interview with GeekWire today, Seattle Mayor Ed Murray said that he will spend the next 45 days working with stakeholders to come up with regulations that everybody can agree upon.

On Thursday, a coalition group that received more than $400,000 in donations from UberX and Lyft submitted enough signatures to suspend a newly-passed ordinance regulating the transportation companies, which utilize smartphone apps and everyday drivers to shuttle people around town. While the new laws — which would have gone into effect this month — allowed the companies to legally operate in Seattle, they also placed a cap on active drivers at 150 per company.

If a compromise is reached during the negotiation process, the City Council could repeal the original ordinance it approved last month and then work together on a new set of regulations. If that happens, the referendum would not appear on a ballot later this year.

However, if no agreement is reached, the referendum would show up either on the August or November ballot for public vote. In this case, Murray said he’ll issue a cease-and-desist to stop companies like UberX and Lyft from operating illegally in the city without regulation.

Whether or not these companies stop conducting business in Seattle remains up in the air. City leaders in Los Angeles issued a a similar cease-and-desist this past June, but the startups did not stop operation.

Murray has been against any sort of cap all along, partly because he thinks it would be extremely complicated to enforce and monitor a regulation like that.

But he’s also concerned about providing a level playing field for taxi drivers, who have spent the last few decades “buying into a highly-regulated monopoly that’s now at risk of going away,” as Murray put it.

“We need strong insurance requirements, a level of deregulation for the taxi industry that would make them more competitive, and caps that would be acceptable to all parties,” Murray said.

He also made it clear that he’d much rather get something done in the next 45 days than for this to go to a public vote later in the year.

“I worry that with a referendum, a lot of people will spend a lot of money that could be spent better on their own businesses,” he said. “It will result in folks automatically losing their jobs and livelihood in an East African community — the largest immigrant group in Seattle — that is already deeply struggling financially and with a series of other issues.”

Here’s more from our conversation this afternoon:

GeekWire: Why will you order a cease-and-desist if the agreement isn’t reached?

Murray: “It’s about insurance. The original ordinance at least made the companies legal and gave a regulatory framework. When they filed the referendum, they became illegal.

I have a responsibility to enforce the law, even if I don’t like the law. I do think if we enforce the law on taxicabs, we’re going to have to enforce the laws on TNCs. Quite honestly, I think it would be irresponsible of me not to because if some tragedy were to happen and we had not dealt with the issue of insurance, I think that would be an unfortunate situation for the TNCs and for the city.”

GeekWire: Why didn’t you order a cease-and-desist when you took office in January?

Murray: “My predecessor during all of last year did not use that mechanism. When I took office, I asked the Council to let me work on this and send something down to them, but they were in the middle of it and had been working on it for a year. So I chose to wait. I wasn’t happy, but I understood I was coming in at the tail end of it.

I signed [the ordinance] to show good faith with them, and now I’m trying to find a way to bring these folks together to get a bill that I can get through Council that will address some of these issues. I don’t know if it will work, we’ll see.”

GeekWire: Are you more concerned about innovation, or protecting the taxi industry?

Murray: “That’s a fair question. Innovation is going to happen and I want it to happen — it’s a very important issue. The City built a system that was so regulated that it didn’t allow for innovation, so having an innovative way for people to move around so they don’t have to drive around in their own cars is great.

At the same time, we are dealing with a community of immigrants who are new Americans who are financially and economically suffering. I do think that we owe it to them to find a way for them to be able to transition to this new world.

I get innovation. I mean, I’m a book nut and there used to be bookstores in every neighborhood in Seattle for me to wander around in. That’s just not true anymore. Their used to be liquor stores controlled by state, and those jobs are all gone now because the world changed. I get that, but I want to try to do this in a way that perhaps creates a more level playing field, and allows the taxi industry to be more competitive and more innovative.”

GeekWire: Is it possible that you’ll come up with an agreement that makes everybody happy?

Murray: “You’re never going to make everyone happy, not in my business. But we want to find a way where most people can see something in a plan to move forward so we can pass another piece of legislation and not have the referendum proceed. Otherwise, if we can’t come to an agreement, the referendum will proceed, enforcement will start, and the taxis and TNCs will have to spend oodles of money on a campaign.”

GeekWire: What is most important to you right now? Safety? Caps?

Murray: “I think that the taxis rightfully feel that they bought into a highly regulated monopoly and paid a lot of money to do this. They are almost entirely from East Africa and they feel like their livelihood is going away. I think they’re right.

I think that on the other side of it, the issue of caps is pretty unacceptable to the TNCs. The issue of them not being regulated at all is pretty upsetting to taxis, since they are highly regulated.

The issue of insurance is a major one for everybody involved and it is my No. 1 concern. The ability to make sure there is a level of insurance and level of certification of both the driver and the car — those are key things for me that have to be solved.”