Virginia officials said Wednesday that they have reached an agreement with Uber and Lyft that allows the app-based ride-sharing services to continue operating in the state.
The deal comes after months of escalating tension between the state and the two companies, which had vowed to continue operating in the commonwealth despite a June cease and desist order.
Virginia Gov. Terry McAuliffe (D) and Attorney General Mark R. Herring (D) said Wednesday that the solution brings the companies into compliance with Virginia law, ensures the safety of passengers, and promotes a level playing field for transportation providers.
“In order for Virginia to remain economically competitive, it is important that we welcome innovative companies like Uber and Lyft and provide them with the resources they need to safely and effectively operate in the Commonwealth,” McAuliffe said in a statement. This solution, he said, will “provide Virginia’s workers, students, and families with more transportation options.”
As a result of the deal, the Virginia Department of Motor Vehicles has granted Uber and Lyft their requests to operate in the state, effective immediately. But officials say the permit comes with a set of terms. Under the agreement, the companies are required to run extensive background checks on drivers and disqualify those with convictions for any felony, fraud, sexual offenses, or violent crimes. It also says there should be reviews of driving history, zero tolerance for drug use, and strict insurance requirements. Failure to comply with the conditions could result in the DMV revoking the operating permit, officials said.
Uber and Lyft officials said the agreement is a good step toward a more permanent solution so they can continue to operate in the state. Virginia is working to develop legislation to find a more permanent solution to address concerns related to the ride-sharing services and their impact on taxi drivers.
“We look forward to continuing to work together to create a permanent home for ridesharing, providing residents and visitors with safe, reliable transportation options,” Justin Kintz, an official at Uber Technologies Inc., said in a statement.
“Today’s agreement allows Lyft to continue providing safe rides and economic opportunity to Virginians as we work with state leaders to secure a permanent future for ridesharing, said Dave Estrada, vice president of government relations at Lyft. “Virginia has led the way in embracing innovative industries and we applaud Governor McAuliffe and Attorney General Herring for their thoughtful work to reach an agreement that maintains the highest level of public safety while expanding consumer choice. In addition to our involvement in DMV’s ongoing study on Transportation Network Companies, we look forward to helping craft new rules for peer-to-peer transportation that increase access to safe, affordable and convenient rides for all Virginia residents.”
Earlier this year, Virginia officials fined the two companies with more than $35,000 in civil penalties and in June, Richard D. Holcomb, commissioner of the Virginia Department of Motor Vehicles, sent a cease and desist letter to both companies saying “I am once again making clear that Uber must cease and desist operating in Virginia until it obtains proper authority.”
Virginia officials say the agreement, which provides a temporary legal framework to regulate the new industry, came about after discussions between the companies, the Virginia Department of Motor Vehicles, the McAuliffe administration, and the Attorney General’s office after the “cease and desist” letters were issued June 5.
The tensions in Virginia mirror an escalating war against the ride-sharing services across the country where cabbies have complained about Uber and Lyft drivers having an advantage because they don’t face the same licensing and permitting requirements as cab drivers. Across the U.S., policymakers have been dealing with how to regulate the new services and a number of states have banned or sought to limit the app-based services from operating.