This post has been updated.
Popular app-based ride services such as UberX, Lyft and Sidecar would face new regulations under updated legislation laid out by D.C. Council member Mary Cheh at a hearing Wednesday.
The services, in which individuals use their personal vehicles to give rides, have built a loyal following among customers since they began operating in the region but have raised the ire of cabdrivers and other vehicle-for-hire services, which say the app-based operators have an unfair advantage because they don’t have to follow the same rules.
The app-based services have operated in a sort of bureaucratic limbo since emergency legislation that allowed them to operate in the city expired. The D.C. Council held a six-hour hearing on the matter in May, but the issue was put on hold until this fall.
Since the services began operating, a series of incidents across the country have raised questions among regulators and some members of the public about insurance coverage and whether drivers are being properly screened and trained.
Cheh’s updated legislation would require the app-based services to provide primary insurance coverage “of at least $1 million per occurrence for accidents” from the time a driver accepts a call until the passenger exits the car. At other times — such as when the driver is waiting to be booked — the driver or the service would be required to provide coverage. Many services have already moved to expand insurance coverage after gaps were revealed following the death of a six-year-old San Francisco girl who was struck and killed by an Uber driver. Uber this year began offering primary insurance coverage from the time a driver accepts a call to when the passenger is dropped off.
Cheh’s bill would also require criminal background checks and prohibit “private vehicle-for-hire” services such as UberX and Lyft from accepting street hails. It would also require the services to submit 1 percent of their gross receipts for trips that begin in the District to the Office of the Chief Financial Officer. This point is significant because cities such as D.C. make money from fees paid by cabs and other vehicle-for-hire services but not from the app-based operators. However, under Cheh’s legislation, how much money the city receives from such services would be shielded from public scrutiny.
At a committee mark-up session Wednesday, Councilmember Jim Graham (D-Ward 1) said he had concerns that the legislation — co-sponsored by Councilmember David Grosso (I-At Large) — did not do enough to level the playing field between app-dispatched services such as uberX and Lyft and taxicabs. For her part, Cheh said the legislation offered just the right amount of regulation.
The legislation would give D.C. cabs the opportunity to vary their rates provided they are booked through an electronic app. It would reduce the number of times cabs must be inspected from twice a year to once a year. Vehicles used by services such as uberX, Lyft and Sidecar would also be required to undergo yearly inspections.
The D.C. Council and the D.C. Taxicab Commission have sparred over how best to regulate the new services. The commission, for example, sought to limit the number of hours that drivers using their personal vehicles to give rides could drive. Drivers who wish to work more than 20 hours a week would have to obtain credentials from the commission.
Ron Linton, the chairman of the D.C. Taxicab Commission had this to say about the bill:
“I have not had the opportunity to review the details of the proposed legislation with the Mayor thus I cannot comment regarding administration support. However, from my position as Chairman of the DC Taxicab Commission I believe the legislation would create a situation that anyone who uses the service being established endangers their personal safety and puts themselves at risk for consumer fraud.”
Meanwhile, Uber sent the following statement in response to a request for comment: ”
“Today’s proposed legislation ultimately codifies the high safety and quality standards Uber has been providing all along and recognizes it as the new baseline for ridesharing in the District. We applaud Councilmembers Cheh and Grosso for their leadership in moving legislation forward that embraces more options and opportunity for Washingtonians.”