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Uber and Lyft closer to permanent legality in Virginia

Uber and Lyft are moving closer to permanent legal status in the state of Virginia after a hearing Monday where state senators agreed on a compromise regulatory framework for the phone-based car services.

The two companies have been operating in Virginia on a temporary basis since August. Initially told they were breaking the law and could not operate in the commonwealth, the companies quickly won interim permits from the administration of Gov. Terry McAuliffe (D) amid pressure from customers and high-powered lobbyists.

Under the legislation, such companies would pay $100,000 for a license to operate in the state. Drivers must undergo background checks, and the company or the driver must have insurance that covers up to $1 million in accident damages.

That insurance would need to be active whenever a passenger is in a car. A lower level of coverage would be required whenever a driver is logged into the company’s application, in case an accident occurs on the way to pick up a customer. While individual drivers could purchase their own hybrid personal-commercial insurance, no such coverage is available yet in Virginia. Any gap left by the driver’s insurance must be covered by the company.

The companies cannot discriminate or charge higher rates to disabled passengers, and when wheelchair-accessible cars cannot be located, they are supposed to direct customers to a company that provides them.

Dozens of Uber drivers showed up for the hearing, with several testifying about their support for companies that let non-professional drivers make money chauffeuring their neighbors.

It’s “a perfect opportunity for people who are struggling in the job market,” said Kia Thomas Hamel, a Navy veteran from Fairfax. She said she had applied mostly for federal government jobs but was frustrated by the slow process; she became an Uber driver in three weeks. Moreover, she said the flexible hours made it easier to make more time for her children when her military husband was deployed.

Several cab drivers and company owners argued against Uber and Lyft, however, saying the companies had bullied their way into avoiding existing regulations. “It is not a public service — it is a noncompetitive service,” said C.I. Dodhy, president of the Alexandria-based United Taxicab Operators Association.

A private investigator working for another taxi association said that he had successfully hailed 22 Uber cabs on the street in Virginia cities and that in half those cars the driver gave a phone number for a second ride. Under both their temporary permits and the new regulations, drivers for these companies are supposed to pick up riders only through their apps.

“I don’t have a $1.9 million valuation. I don’t have money to donate to your campaigns or pressure the governor,” said Randy Freeman, who runs a private Richmond-based cab company. “I only have one plea — be fair.”

Several lawmakers expressed desire after the testimony to let such existing small-business owners into the new system without paying the high initial fee. Also left undecided by the subcommittee hearing testimony Monday was whether background checks by third-party operators are stringent enough to pass muster.