Colorado lawmakers affirm the legality of smartphone ridesharing apps that can effectively transform users’ cars into taxis.
The end of the most recent Colorado legislative session in early May has provided the state with several new pieces of technology-related legislation. As reported by the Denver Business Journal, the session produced new regulation guidelines for the telecom industry, as well as a much-anticipated decision on the legality of so-called ridesharing apps.
Over the past few years, popular ridesharing applications – such as those offered by Lyft, Uber, and SideCar – have allowed online communities of automobile drivers to transform their private vehicles into de facto taxi cabs. In order to accomplish this, smartphone users download an app that allows them to request a driver pick-up. After reaching their destination, they can pay the driver digitally. Or, as some users see it, they simply transfer a suggested monetary 'donation' to the friendly driver.
At the time of writing, the major players in the field of online ridesharing in Colorado are two San Francisco-based start-ups, Lyft and Uber, each of which offer passengers and drivers a slightly different take on the process.
The more ‘folksy’ of the two, Lyft rideshare drivers are identifiable by the fuzzy pink mustaches many choose to attach to the front of their cars. The company offers some other perks. According to its website, Lyft riders, in addition to hailing and paying drivers online, may also follow the arrival of their pre-screened driver using their phones and rate their experience for future users. In a nod to overall fairness, Lyft drivers can evaluate their passengers’ behavior as well. The company also offers an additional $1 million in excess liability coverage to address potential concerns about accidents with uninsured or underinsured drivers.
In contrast, competitor Uber (formerly UberCab) initially offered its customers travel in high-end automobiles, including Lincoln Town Cars and German luxury sedans. The company has since expanded to a wider array of vehicles under its UberX moniker, while promoting its brand as a purveyor of easy, upscale automobile transportation in major urban areas throughout North America and worldwide. It, like smaller SideCar – which currently serves only the largest U.S. coastal cities, along with Charlotte and Chicago – offers services and guarantees similar to those of Lyft.
Despite the friendly demeanor and convenience promoted by these companies, their ridesharing apps have been seen as unwelcome competition by many taxi drivers, and as a potential source of liability in various communities across the country. For example, in May of 2014 city officials in Ann Arbor, Michigan issued cease and desist letters to both Lyft and Uber, arguing that their services represent a potential threat to public safety and violation of city transportation regulations.
Lyft spokeswomen Paige Thelen responded, saying "We take the ... letter as an opportunity to open a conversation … and we look forward to working together toward a permanent solution that focuses on public safety and allows ridesharing to thrive." (“Uber, Lyft Rideshare Services Issued Cease and Desist Letters by City of Ann Arbor.”)
Such conflicts as the one in southeastern Michigan have prompted the ridesharing community to more precisely define some of its terms and to acknowledge the likelihood of increased government regulation in the future. For instance, prior to Lyft and Uber, ridesharing was generally recognized only in the context of commuting between home and work. But, these new firms have expanded that definition to include transportation that can occur on the roads practically anywhere and at any time, effectively turning private automobiles into unregistered taxis.
Now, in order to address the concerns of the taxi industry, which has argued that ridesharing vehicles and drivers should be regulated in much the same way as cabs are, the Colorado legislature has defined firms such as Lyft and Uber as “transportation network companies.” The DBJ article notes that these new legislative regulations require that “vehicle safety inspections, insurance coverage minimums, driver criminal background checks and other standards be met” for all rideshare drivers. (“Telecom Reform, Ride-Sharing App Rules Emerge from Colorado Legislature.”)
Legislative passage of the bill, which prompted considerable debate but elicited few negative votes, suggests that online ridesharing (with the addition of new government regulation) is here to stay. The bill is expected to be approved by Governor John Hickenlooper and signed into law once its details have been finalized.