Business

Uber, Lyft react positively to proposed law

REUTERS

June 23, 2016

Uber and Lyft seem to feel pretty good about a bill from the state Senate that would set legal standards on contentious issues like background checks and insurance requirements that essentially match their existing business practices.

Uber said representatives are still reviewing the proposal, which is expected to come for a vote next week. But the company’s initial reactions suggested support.

“The Senate proposal is a significant step forward for innovation and growth, with strong support for improved transportation options and economic opportunities that move our cities and communities,” the company said in an emailed statement.

Lyft, too, had a positive reaction to the bill, which was unveiled Thursday morning.

“The proposed Senate legislation creates a common-sense framework for ridesharing that sets high safety standards while keeping modern transportation options like Lyft available across the state. The people of the Commonwealth have made it clear they want ridesharing in Massachusetts and we appreciate the thoughtful process taken by the Senate to develop this bill,” said spokeswoman Chelsea Wilson.

The bill includes some standards that Uber and Lyft might consider less than ideal, including a per-ride tax of 10 cents that the companies would pay to the state, which would later be disbursed to cities and towns based on the number of trips that originate there to be spent on transportation purposes. It would also require smartphone-powered ride-hail companies to include a tipping function in their apps. Lyft already offers one, but Uber has resisted allowing tipping. If that provision ultimately becomes law, the company would need to add the feature.

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But the companies are reacting far more positively than they did to a House bill that passed in March. That bill banned most of the companies’ drivers from picking up riders at Logan Airport and the Boston Convention and Exhibition Center; the Senate bill does not.

The House bill also required individual drivers to become certified by the state, which Uber and Lyft considered a needless burden that would replicate their own background checks. The Senate bill, instead, allows the companies to certify their own drivers, making it easier for new drivers to get on the road. And the Senate bill does not include a House provision requiring an additional vehicle inspection, another win for Uber and Lyft.

If the Senate bill passes in its current form, it would need to be reconciled with the House version in a conference committee. That would require bridging significant gaps before the legislative session concludes at the end of July.

Sen. Jamie Eldridge, who worked on drafting the bill, said in an interview that the Senate “took a different direction” from the House, and that he was “curious to see” public reaction to the two different versions and how the negotiations will unfold.

The Acton Democrat said that after talking with the company that conducts Uber’s background checks, he and colleagues agreed that the state background check was unneeded.

The per-ride fee was meant to serve as mitigation to cities and towns for the drivers’ presence on their roads, Eldridge said.

He said cities or towns could use the money for anything from road repairs to compensating taxi drivers whose city-issued medallions have lost value with the rise of Uber and other ride-hail services.

“There’s the possibility for some relief for medallion owners, but I would concede that it’s not significant,” Eldridge said.

The taxi and livery industries are reacting angrily to the bill, having fought for the state to more tightly regulate their upstart competitors in a call for a level playing field. Scott Solombrino, a limo executive who is leading a campaign for the tighter rules, blasted the Senate bill as “jeopardizing jobs, taxes and the very livelihoods of an entire industry” in a statement Thursday. He said the industry would fight to amend the bill before next week’s vote.

Solombrino and other taxi and livery advocates also criticized the House bill as too forgiving for Uber and Lyft, meaning the industry has not seen a bill of its liking in either chamber yet.

Eldridge said he and his colleagues focused on crafting a law governing the newer services rather than encapsulating the broader ride-for-hire industry. (The bill does, however, call for the creation of a task force to study all ride-for-hire services, including the taxi and livery regulations on the books.)

He said decisions on how taxis should be governed may wind up being decided in court, pointing to recent skepticism from at least two federal judges — including one in Boston — that the industry should be treated any differently from Uber and Lyft under equal protection rules.

“Clearly, there’s more court decisions coming, and there could be one that would equate [Uber, Lyft, and similar services] with taxis and liveries … and perhaps there is a push that they need to be treated more equally,” Eldridge said. “The next couple years are going to be a real interesting time in the courts about how they’re treated.”