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The General Assembly has passed legislation introduced by House Majority Whip John G. Edwards (D-Dist. 70, Tiverton, Portsmouth) and Senate Majority Whip Maryellen Goodwin (D-Dist. 1, Providence) that would regulate transportation network companies such as Uber and Lyft.

The bills (2016-H 8044A, 2016-S 2864Aaa) create regulatory provisions for operators and drivers to be administered by the Division of Public Utilities and Carriers. It also would require them to obtain permits, and certain background checks, and would set minimum insurance requirements. The measure now heads to the governor.

“There’s no question that these ride-sharing companies are meeting a definite need in the marketplace, and I applaud their efforts and ingenuity.” said Representative Edwards. “I just want to make certain that they abide by regulatory rules and regulations just like everybody else. Competition is great; an unfair advantage over traditional taxi services is not.”

The three issues of utmost importance to Whips Edwards and Goodwin — that the companies comply with strict insurance regulations, that drivers submit to background checks, and that the company pays taxes like everybody else — are all addressed in the legislation.

“Like many other states and jurisdictions, Rhode Island needs to update the laws to reflect the reality that ride-sharing services are here and that Rhode Islanders are using them regularly. Riders and drivers deserve to be protected under the laws, and the networks should be subject to regulation, accountability and taxes like similar businesses are,” said Senator Goodwin. “This is about public safety as well as accountability and fairness.”

Use of ridesharing networks has grown tremendously. Lyft and Uber, along with others such as SideCar, Get Taxi, Hailo, leCab and Taxi Mobility, offer a convenient, low-cost way to get around. Appealing to users is their simplicity. The networks consist of a smartphone app and willing drivers.

Appealing to passengers is the convenience of catching a ride with one of these services. After downloading the free app onto a smartphone and entering your credit card information, all you do to summon a ride is enter your location.

Critics claim they have an unfair advantage over taxis by not having to play by the same set of rules, regulations and licensing requirements. Transportation networks are quick to differentiate themselves from taxicabs. They don’t hire drivers or purchase vehicles; they merely facilitate transactions between individuals.

At the forefront of the legislation is the requirement that the companies register their vehicles and provide necessary insurance information to the Division of Public Utilities and Carriers, along with obtaining a permit. Each permit, which would come with an application fee of $15,000, would allow for the use of 100 vehicle identification devices. There would be an annual charge of $150 for every vehicle over 100.

The bill also requires drivers — including traditional taxicab drivers — to undergo a national criminal records check. Also, all transportation network companies would be subject to the same taxation as traditional taxicabs, including sales and use tax. The taxation provision was included in Article 13 of this year’s budget (2016-H 7454Aaa).

The legislation also provides that customers must be told in advance how much the fare would be, along with the method used for calculating the fare. It would also require that the website provide a picture of the driver and the license plate number. The bill would outlaw cash payments, or the accepting of fares beyond those that are scheduled through the app.

It gives the Public Utilities Commission the power to revoke and suspend a transportation network’s permit as the result of a violation, but it prohibits the commission from assessing a penalty against a driver. The law also directs the Division of Insurance to examine whether the levels of insurance coverage required are appropriate.

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