Uber and Lyft Poised to Be Regulated By New Law

Does Maryland have any regulatory control over companies like Uber and Lyft

As their businesses have grown, ride-hailing services such as Uber and Lyft have faced various challenges including conflict with the taxi industry. All sides are reportedly pleased, however, with a new Maryland law that sets up a regulatory framework and provides app-based car services permanent legal status in the state.

Maryland’s Public Service Commission (PSC) had begun drafting regulations that would classify companies such as Uber and Lyft as common carriers and impose stricter driver licensing, insurance and other requirements. Maryland State Senator Bill Ferguson introduced a bill that created a different set of regulations under a new category called Transportation Network Services.

Initially, there was resistance to the PSC rulemaking efforts because Uber viewed them as trying to fit the company into a taxi regulatory framework, which is not compatible with Uber’s business model. The taxi industry has generally been opposed to Uber’s presence in Maryland, especially in jurisdictions where taxi service already exists. With approximately 8,000-10,000 drivers in the state, though, Uber has no plans to leave. The question was how it would be regulated, and it seemed that the PSC and Sen. Ferguson had different approaches. Virginia and the District of Columbia recently adopted rules governing businesses such as Uber and Lyft that were more in line with Sen. Ferguson’s proposal.

The final legislation that passed Maryland’s General Assembly was the product of intense negotiations and appears to have satisfied the parties involved, including those looking for more consumer protection . The proposed law creates new permitting, licensing and insurance requirements. The PSC will be heavily involved in developing and overseeing rules implemented under the bill. It was not yet clear whether Governor Hogan would sign the bill into law.

The business and corporate law attorneys at Longman & Van Grack provide a diverse range of services. Their extensive experience with all aspects of starting and running a successful business ensures sound legal counsel. We have offices in Bethesda and Rockville, Maryland. Contact us today at (301) 291-5027.