State senators expressed strikingly differing opinions on whether government should start regulating transportation network companies such as Uber and Lyft. Some called for the companies and their drivers to maintain insurance coverage that’s more onerous than that required of taxi drivers while others argued that the state’s current regulations are sufficient to protect public safety.
Sen. Floyd McKissick, D-Durham, who along with Sen. Bill Rabon, R-Brunswick, sponsored Senate Bill 541, said legislation is needed to work through issues that have surfaced with the emergence of the app-based ride-sharing companies in recent years.
McKissick told the Senate Transportation Committee on Wednesday that the proposed legislation follows a national model for regulating such services, adding that Uber and others interested in the industry have worked through most of the issues between them in developing the legislation.
“I’d say right now we’ve got about 95 percent consensus,” McKissick said. “We’ve got about 5 percent that we’re still trying to work on.”
McKissick said the state needs a regulatory framework clearly defining the levels of insurance coverage necessary for companies and drivers to protect public health and safety.
But Sens. Ralph Hise, R-Mitchell, and Tommy Tucker, R-Union, disagreed.
“Uber is operating in this state and doing quite well and providing a good service,” Hise said. “Why do we all of a sudden need to regulate this like something’s on fire and we’ve got to put it out? Why not just let it be?”
Tucker said that Uber has proved successful. Jokingly, he said, “Government must find a way to regulate. We cannot have people doing well in this state without getting a piece of their action.”
More seriously, he added, “I’ll submit that Uber is at the table because they’re scared you’ll run them out of town.” He said the proposed regulations would make providing the services more costly.
“I can’t tell you how many times probably Uber [transporting a patron] has saved us from a DUI wreck or someone killing somebody because taxis are not available or they can’t get there as quickly as Uber does,” Tucker continued. “I think it’s a mistake.”
Wesley Hottot, an attorney with the Institute for Justice, cautioned against overregulation.
“Cities’ and states’ regulation of transportation affects small businesses in profound ways,” Hottot said. “Legislators should be careful to ensure they’re requiring what is needed and not just what competitors would like to see.”
Hottot said that regulators should be reasonable and not unintentionally make it harder for new entrepreneurs to get into business.
“For too long we’ve had 19th century regulations for a 21st century world,” Hottot said. “We need to make sure we’re being reasonable about what we’re asking of small businesses.”
Jeff Barnhart, a lobbyist for Uber, thanked the sponsors for the work they’ve done on the bill.
Chelsea Wilson, a spokeswoman for Lyft, who did not attend the meeting, noted that the details of the bill are still being finalized.
“We believe the process is moving in the right direction and we are optimistic that we will find a way forward that preserves Lyft safe, affordable rides and flexible economic opportunity for North Carolina residents,” Wilson said.
The bill would require a transportation network company — not individual drivers — to pay a $5,000 annual fee to the state Division of Motor Vehicles. It also would require drivers to carry a $50,000 liability insurance policy when they are waiting for passengers to contact them and $1.5 million in coverage from the time a driver has accepted a ride request until the passenger has reached his destination. McKissick said the insurance liability coverage is based on model legislation proposed in other states, and is higher than taxis must carry.
That is more insurance coverage than the law requires of taxis. They’re required to have $30,000 for bodily injury or death of one person in any one accident, $60,000 for injuries involving two or more people, and $25,000 for property damage.
The N.C. Utilities Commission has separate insurance rules.
S.B. 541 also sets out requirements for drivers’ background checks while exempting drivers for ride-sharing services from a requirement that they obtain “For Hire” license tags for their cars.
Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.