Ride-sharing companies such as Lyft and Uber would be regulated under a bill heard by the Transportation and Telecommunications Committee March 2.
LB629, introduced by Omaha Sen. Heath Mello, would designate a transportation network company (TNC) as a new class of transportation service provider. A TNC would fall under the jurisdiction of the Public Service Commission and be defined by the bill as a corporation, partnership or other entity that uses an online application or digital network to connect riders to drivers for transportation service.
The bill would establish regulations for a TNC regarding permits, insurance, driver background checks, vehicle inspections, fee collection and complaint investigation. Additionally, the bill would require a TNC to pay an annual fee of $20,000 or up to $80 per vehicle registered with the company.
Mello said ride sharing is a rapidly growing industry that cities and states find difficult to fit into existing regulatory frameworks. Unlike a traditional taxi service, he said, TNC drivers can serve only subscribers who request rides via online applications. Current statutes that were drafted decades before the invention of the smart phone need to be updated immediately, he said, because ride-sharing companies already are operating without regulation in Nebraska.
“Regardless of how they enter into business in the state,” Mello said, “it is obvious they don’t fit commercial carrier regulations.”
Dave Barmore, public policy associate for Uber, testified in support of the bill, saying that Nebraska is one of 30 state governments with which Uber is discussing ride-sharing legislation. Despite being a new industry, he said, ride sharing is making an impact in cities such as Pittsburgh and Seattle, where arrest rates of intoxicated drivers have declined 10 percent. Although questions remain about insurance coverage for service providers, Barmore said, he is confident ride-sharing companies will be able to find a permanent home in Nebraska.
“We are not anti-regulation; we are for smart regulation that takes into account this is a new technology,” Barmore said.
Scott Hatfield, owner of Duffy’s Tavern in Lincoln, also spoke in favor of the bill, saying Lincoln businesses always have been concerned about providing safe and plentiful ways to transport customers to and from downtown. Despite the recent expansion of taxi service in Lincoln, he said, patrons still experience one- or two-hour waits for cabs. This results in some people deciding to drive themselves home while possibly intoxicated, he said.
“Happy Cab has done a nice job in Lincoln, but it’s far from enough,” Hatfield said.
Inge Roettcher, an Uber driver from Omaha, also spoke in support of the bill. She said her experience as both a taxi operator and ride-sharing provider has shown her that there is room in Nebraska for many styles of transportation businesses. The more businesses that compete for riders, she said, the better the service will be.
“Competition is good,” Roettcher said. “It makes us step up our game, it makes us provide a more professional service to the public.”
Kelly Campbell, representing the Property Casualty Insurers Association of America, testified in opposition to the bill. She said LB629 does not define clearly when a driver is considered to be working for a TNC, which creates potential gaps in how drivers are insured. Commercial use of a vehicle, she said, typically is not covered by drivers’ personal auto insurance policies.
“This new business model blurs the [coverage] lines,” Campbell said.
Kirby Young, co-owner of Servant Cab Company in Lincoln, also spoke in opposition to the bill. He said ride-sharing companies have been able to provide the same service as his company in Nebraska without being subject to the same regulations. Numerous rules, such as those regarding rates charged and drivers’ hours are not being applied to TNCs, he said.
“We’re just asking for a level playing field,” Young said. “Any way [TNCs] would be authorized to do business, we would want to be authorized to do business.”
The committee took no immediate action on the bill.