Ride-sharing service companies may be subject to state regulations — but not to as strict a standard as are traditional taxi services — under a bill that passed the Senate on March 10.
Transportation network companies like Uber and Lyft allow passengers to book rides through a smart phone application. The companies have been able to provide services without government regulations because they claimed to have fit under a different operating model than taxi companies, an assertion that has upset the taxi industry.
But legislators were forced to take regulatory action after the Public Utilities Commission began investigating whether companies like Uber and Lyft are complying with state transportation rules.
“I think it's an important bill and it's something that has to be done because the PUC is saying these businesses are acting outside of the law,” said Sen. Ted Harvey, R-Highlands Ranch, a bill sponsor. “And, without this bill, they would no longer be able to do business.”
The bill is one of many nationwide responses to the relatively new industry — Uber, for example, began operating four years ago. Local governments across the U.S. have struggled with determining whether transportation network companies fall under the umbrella of a motor vehicle service or as web-based transportation companies that are entirely different animals, altogether.
The bill would require businesses like Uber and Lyft to carry liability insurance, conduct background checks on drivers, inspect vehicles and receive permission to operate from the PUC.
The amended version of the bill also requires that drivers not be allowed to drive more than eight hours in any 24-hour period and that companies keep files containing driver insurance and proof of background checks on file.
However, the bill would not require companies like Uber and Lyft to comply with the same set of guidelines that regulate taxi companies, such as regulation of rates and operational requirements. Taxi companies say that the new transportation network companies are hurting their business because they are not required to comply with costly regulations.
Sen. Cheri Jahn, D-Wheat Ridge, a bill co-sponsor, said she understands those concerns and hopes that lawmakers will examine taxi regulations at another time.
“We are more than happy to look at that, but that's not this bill,” Jahn said.
Jahn lauded companies like Uber and Lyft for creating “an entirely new class of jobs” that attracts part-time drivers, such as college students and retirees, who are looking to make a few bucks.
Jahn also said that while it's good to see these companies thrive, it's just as important to make sure that riders feel safe.
“It is our job to make sure there are protections for consumers and we believe we have done that,” Jahn said.
While the bill had strong bipartisan support — it passed the Senate following a vote of 29-6 — there was some dissent. Sen. Owen Hill, R-Colorado Springs, blasted the attempts to impose “wet blanket” regulations on the new industry.
Hill — who said he has logged 193 trips through Uber — tried unsuccessfully to attach an amendment that would have put off the implementation of the PUC regulations until next year.
“When does the PUC have constitutional authority to say who can and can't pick someone up and take them somewhere else, as part of a private contract?” Hill said.
The bill now heads to the House.
