While regulation governing transportation network companies continues to be hashed out at the state levels and in the courts, cities are increasingly establishing their own local regulatory frameworks for ridesharing companies like Uber and Lyft. Over the last few months, several cities nationwide have passed ordinances governing TNCs, taking a variety of regulatory approaches.
In Houston, Texas the City Council passed an ordinance allowing Uber, Lyft and other smartphone-based rideshare companies to operate in the City, with a few caveats designed to bring the services in line with rules governing taxi, limo and shuttle services. As one example, the Houston ordinance establishes a fleet-wide minimum requirement for wheelchair accessible vehicles, requiring that three percent of a fleet be handicap-accessible. A task force made up of handicapped individuals and people from taxi and ridesharing companies will recommend changes in handicap policies to the City. The ordinance also gives the City authority to impound rideshare vehicles found operating without a permit and eliminates the minimum limousine fare of $70. It also requires all drivers to undergo criminal background checks and pass physicals before receiving permits.
As elsewhere, the biggest issue in Houston was insurance coverage. While taxi companies are required to have round-the-clock insurance coverage, the ordinance mirrors California’s recently adopted law requiring insurance whenever the driver is logged into the app and available to service customers. The ordinance has created controversy among taxi drivers, who argue their tightly regulated fare guidelines and more stringent insurance requirements will render them unable to compete with TNCs.
Austin, Texas has also passed a new ordinance allowing TNCs to operate at least through August 2015. The Austin ordinance requires TNC drivers to be covered by insurance whenever they log onto ridesharing apps, and also adopts a background check requirement, subject to an audit of the background check report by the City.
Finally, this week the District of Columbia City Council passed a comprehensive ridesharing framework. Though Uber has been legal in D.C. for two years, the new legislation fixes some of the issues that TNCs have caused during that period. The new framework requires mandatory county, federal and multi-state background checks going back seven years, possibly in response to the death of a young girl in San Francisco last New Year’s Eve, who was struck down by an Uber driver who passed a California-only background check but had a driving record in Florida. The D.C. framework also requires $1 million in primary insurance coverage from the moment a driver accepts a request. Finally, it requires annual vehicle safety inspections by a certified mechanic.
Though the regulatory and policy problems presented by TNCs may be similar everywhere, individual cities may prioritize their concerns differently, and wish to fashion their own individual approaches to solving them. There is much that can be learned from the cities that are already regulating Uber, Lyft and other rideshare companies, and these cities’ choices will lay out paths for future regulators to adhere to or diverge from based on their success.
