Ride-sharing regulations advanced

The state would regulate ride-sharing companies such as Lyft and Uber under a bill amended and advanced April 21.

Introduced by Omaha Sen. Heath Mello, LB629 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 stages of operation, permits, insurance, driver background checks, vehicle inspections, fee collection and complaint investigation. TNC drivers in Nebraska would be required to have a valid driver’s license, proof of registration, proof of automobile liability insurance and be at least 21 years old.

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 companies are a new and rapidly growing enterprise that does not fit within Nebraska’s current regulatory framework. Regulations such as criminal background checks for TNC drivers are necessary, he said, to protect the public adequately in an industry that has evolved into a major economic development tool.

“Transportation network companies have permanently changed the transportation industry,” Mello said.

A Transportation and Telecommunications Committee amendment, adopted 34-3, made several changes including:
• prohibiting drivers from participating as a TNC driver for more than 12 hours in a 24-hour period;
• requiring TNC drivers to maintain comprehensive and collision physical damage insurance if required through a contractual obligation;
• requiring TNCs to file rates for compensation, including any use of dynamic pricing, with the commission and post on an online application when dynamic pricing is in effect;
• requiring TNCs to post a fare estimator on an online application;
• requiring the commission to inspect TNC records at least once each quarter; and
• prohibiting TNCs from transporting any person under contract with the state Department of Health and Human Services without authorization from the commission.

Lincoln Sen. Adam Morfeld supported the bill and committee amendment, saying ride-sharing options fill gaps in public service where taxi companies fall short. Even with recent expansion of cab service in Lincoln, he said, customers still experience long waits for rides.

“We need to ensure that there are as many public transportation options in Nebraska as possible,” Morfeld said.

An amendment to the committee amendment, introduced by Omaha Sen. Brett Lindstrom, would:
• require TNCs to determine whether a lien exists on a personal vehicle used by a driver seeking employment by the TNC;
• require the state Department of Motor Vehicles to provide, upon request by a TNC, vehicle lien information;
• expand the definition of personal vehicles used by TNC drivers to include owned, leased and those the driver is authorized to use; and
• exclude from the definition of prearranged ride a shared expense carpool, vanpool or transportation provided using a taxi, limousine or other for-hire vehicles.

Lenders should be notified if vehicles they hold liens on are used for commercial purposes so they can confirm that the vehicles are adequately insured, Lindstrom said.

Sen. Tyson Larson of O’Neill supported the bill but opposed the Lindstrom amendment, saying overregulation imposed by the Legislature could discourage businesses from locating in Nebraska. Cities with established ride-sharing services have experienced substantial decreases in arrests and fatal accidents resulting from intoxicated drivers, he said, and lawmakers should encourage businesses that make Nebraska safer.

“If we want to promote responsibility, we have to have companies like this,” Larson said. “I view Uber and Lyft as public safety [advocates].”

Syracuse Sen. Dan Watermeier supported the amendment and the bill, saying all entities associated with driver insurance and vehicle ownership should be aware when a driver joins a TNC so adequate insurance policies are employed.

“So many [bad] things can happen in an innocent way,” Watermeier said. “Too many people are going to get hurt if we’re not careful.”

Columbus Sen. Paul Schumacher opposed the bill, saying that new, internet-created entities like ride-sharing companies do not yet have substantial levels of noncompliance to warrant regulation by the Legislature. As written, he said, the bill still poses too many obstacles for a new industry to establish itself in the state.

“Where has there been proof that this class of company … needs regulation?” he said. “Let’s let free enterprise have a shot.”

After Mello said he would work with Lindstrom on an amendment to bring on select file, Lindstrom withdrew his amendment. Senators advanced the bill from general file on a 39-1 vote.

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