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State Legislation Would Override Municipal Regulations for Ride Sharing Services

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The Texas legislature is considering a new law—HB 2440—to regulate Uber and Lyft, taking away control from local cities that now have their own, often different, regulations. Uber and Lyft are spending huge sums of money lobbying for state regulation over municipal control because the state law would be less restrictive.

Uber and Lyft are new transportation services that use smartphone apps to connect customers with drivers, who use their own vehicles to pick up people who need rides. Ten states have already passed laws regulating Uber and Lyft, and about thirty-five others are considering similar ones.

How the Bill Would Regulate Ride Sharing Services

Right now cities across Texas have their own regulations governing Uber and Lyft, which is how taxicabs are also regulated. However, these regulations vary by city. For example, Dallas and Austin are satisfied with Uber’s background checks on its drivers while Houston and San Antonio want stricter regulations. Uber and Lyft actually stopped operating in San Antonio when the city passed a restrictive law that included fingerprinting drivers, requiring them to undergo random drug testing, and charging the company a fee to operate in the city.

Uber wants this state-wide regulation so much that it has enlisted people who have used its service to sign a petition asking that the legislation be passed. Key provisions of the proposed law include:

  • Requiring Uber and Lyft to obtain a permit to operate and pay a $5,000 annual fee to maintain the permit.
  • Requiring disclosure of the fare calculation method on the company website and providing customers with an estimated fare before the ride begins.
  • Requiring a driver to maintain an owner’s or operator’s motor vehicle liability insurance policy that meets the requirements of the law.
  • Requiring the company to maintain motor vehicle liability insurance of at least $1 million per accident for bodily injury and property damage.
  • Requiring Uber and Lyft to conduct criminal background checks of drivers using multi-state and national databases and to review driving records.

Both companies already cover their drivers with a $1 million insurance policy and do criminal background checks going back seven years. This legislation would not have an impact on their current policies very much, which is why they support it so strongly.

Do you have any experience using Uber or Lyft? If so, tell us about it in the comments.

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