Ride-sharing rules weighed
Bill aims to define growing industry
State lawmakers are looking to regulate Arizona’s growing ride-sharing industry.
Ride-sharing companies, such as Uber and Lyft, both of which are based in San Francisco, are expanding across the country by offering an alternative to hailing or calling for a taxi.
Customers use smartphones to request a ride through an app and get connected with a driver working part time as an independent contractor while driving their own cars. Passengers usually pay cheaper prices than traditional taxi fees.
As ride-sharing services invade metropolitan markets, state and local regulators’ concerns have grown over insurance and liability. Jurisdictions across the country have struggled to regulate the changing business model.
House Bill 2273 aims to define “ride-sharing network” in state statutes and establish regulations and requirements for such services.
Among the bill’s provisions, ride-sharing networks would need to register with the Arizona Corporation Commission, conduct annual safety inspections for each vehicle and maintain an excess commercial liability insurance policy.
The Arizona Department of Weights and Measures licenses and regulates taxis, livery vehicles and limousines. Under state law, owners of such vehicles must pass criminal back- ground checks, be inspected and drug-tested, and keep vehicle maintenance and licensing records under department standards.
The bill would exempt ridesharing networks from licensing, testing and certification requirements under Weights and Measures. It instead outlines age, insurance, backgroundcheck and other requirements for ride-sharing companies in a separate category.
“It’s a new concept, relatively. It’s new technology,” bill sponsor Rep. Tom Forese, RChandler, said. “It requires legislation to make sure there’s a balance between the way things have been done in the past, and the way things will be done in the future.”
During a House Government Committee hearing last week, Forese urged fellow elected officials to support innovation: “There is a new idea here, and there are things that have to be figured out. ... I will work with all the stakeholders to try to find the solution.”
More than 100 drivers and customers of Lyft and Uber gathered at the state Capitol last week, carrying Uber signs and Lyft’s signature furry pink mustaches, to support the bill.
After three hours of testimony and committee discussion in a packed hearing room, the committee unanimously approved the bill and urged stakeholder meetings.
Weights and Measures Director Kevin Tyne said the bill’s provisions could create confusion for consumers. Two cars, of the exact same make and model, doing the same business, would be subject to different regulation based on whether they fall under the department’s jurisdiction or not, he said.
Arizona does not have a burdensome regulatory process for the for-hire transportation industry in an effort to create a level playing field, Tyne said. The ride-sharing networks essentially would be providing the same services, but without accountability to the department, he said.
“From the department’s mind, who has been out there trying to regulate and enforce even-handedly, it’s hard to argue that this is different than what’s already in existence in Arizona,” Tyne said.
Insurance representatives opposed the bill, expressing concern about insurance exposure for drivers, and potential risk to the public who use ride- sharing services.
Officials representing Total Transit Inc., the parent company of Discount Cab, also opposed the bill, saying companies like Uber and Lyft do not have unique business models or unique smartphone technology. Discount Cab, based locally, has had a similar app, and has drivers that work part time and use their vehicles both personally and commercially, just like Uber and Lyft, said John MacDonald of Total Transit.
Ride-sharing network supporters say their services provide a more personable experience that fills a transportation gap in the Valley.
“I’ve met a lot of wonderful people, people who have been helped by Lyft,” said Cheryl Murray, a Lyft driver. “It’s something that the community really needs. They need something over and above the public transit system, taxi cabs.”