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2-4-17

The impact of companies
like Uber and Lyft

STATE STANDARDS COMING

by Valerie Verkamp
Landmark editor

Tech-savvy transportation companies, like Uber and Lyft, have changed the way residents and tourists in cities across the country arrive at their destination.

With a click of a hand, customers can install smart-phone apps to request a ride and set up an automatic payment method. Customers like having their receipt e-mailed directly to them and the peace of mind of a cashless transaction.

To allow ride-hailing companies to flourish beyond the municipalities that have already established rules ensuring that transportation companies provide safe rides to all residents, Missouri House Bill 130 creates statewide standards for ridesharing companies.

Legislation to map out a regulatory system for ridesharing companies failed last legislative season, but after a few tweaks to the bill this legislative session, there appears to be strong momentum for a new set of regulatory requirements for transportation network companies.

The legislation, passed in the Missouri House, would expand services across the state and create new jobs.

Provisions of the proposed bill require drivers, who serve as independent contractors, to undergo a local and national criminal background check. This is ancillary to the San-Francisco based company's vetting process of examining driving records and verifying insurance.

If the ridesharing company becomes aware of a conviction that disqualifies the driver from functioning as an authorized driver, then the company would be required to revoke the driver's credentials.

The bill would also require vehicles used to transport customers to meet inspection requirements and levies an annual registration fee of $5,000. Aside from state income tax or earnings taxes, the legislation would exempt transportation network companies from local and municipal taxes.

House Speaker Todd Richardson said it is the appropriate time to “add Missouri to the list of 38 other states that have passed similar legislation and provide their citizens with the opportunities provided by transportation network companies.”

The provisions of the bill closely align with what leaders for tech-savvy transportation companies deem appropriate.

“We are excited the Missouri House recently passed a statewide framework (H.B. 130) for rideshare expansion,” said an Uber spokesperson. “And we look forward to working with the Senate on this proposal that would allow Uber to provide more economic opportunities for drivers and greater access to safe and reliable transportation options for the people of Kansas City and all Missourians."

As for Lyft, company officials have registered with the secretary of state’s office to do business in Missouri. As of now, Lyft does not serve customers in Kansas City, while Uber does.

At the local level, Kansas City officials are tweaking a few of the terms governing transportation companies that were established in the spring of 2015.

Chris Hernandez, director of city communications, said public feedback and open discussions with leaders in the industry are pushing for a few modifications to the original ordinance.

The biggest changes to the city ordinance would allow GPS-based devices to serve as a meter and require vehicle permit holders to have liability insurance with liability limits of at least $50,000 for injury.

“The goal remains to protect public safety while modernizing ordinances and offering the public multiple transit options as KC revitalizes and downtown amenities increase,” said Hernandez of the proposed modifications.

Fare rates of transportation companies vary, but the maximum meter-based rate of a fare is $2.50 for the initial drop fee and $2.10 per mile in Kansas City. Drivers can charge an additional 50 cents per trip for each person over two passengers.

As to the proposed statewide standards, Hernandez said city officials are aware that various proposals at the state level are being considered.

The proposed bill would allow Kansas City to audit transportation network companies up to twice a year. Costs associated with the audit may fall back on the ridesharing company. Fines for compliance violations could cost up to $500 per violation.

“Anything in the state law that singles out changes specific to KCMO would be a recognition of the hard work we have already put into this issue, working collaboratively with the entire vehicle-for-hire industry to create rules that work for Kansas City,” said Hernandez.