Need a ride?  Call Uber.  It’s officially regulated.

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Uber was the talk of the table during our Thanksgiving meal. One of my cousins drives for Uber in her spare time. So does her boyfriend. They compete for who can earn the most extra spending money. I’ve used Uber myself several times. I’ve rated all my drivers a 5. And I’ve never worried about whether taking Uber was safe. But for those who do (my mother and aunt), legislation enacted by the General Assembly last session may provide some assurance. 

First, what is Uber?  Uber is a transportation network company headquartered in San Francisco that provides a taxi-like service for users of its mobile application. A network of independent contractors in cities around the country provide Uber services in their personal cars. To use Uber services, a rider registers with the company, providing her name, email address, mobile number, and credit card information. After registering, a rider opens the mobile application on her phone, which defaults to her location. She can then see the precise location of Uber drivers nearest to her and an estimate of how soon one could arrive to pick her up. I just opened the app on my phone, and an Uber driver could be here in 5 minutes. When I use Uber, the trip is automatically billed to the credit card I have on file. Uber says there is no need to tip.

Uber is the most talked about transportation network company in my circles, but it isn’t the only such company. Others include Lyft (this is the company whose drivers initially adorned their vehicles with a large pink mustaches), and Wingz, which provides airport service only.

Isn’t this just another name for a taxi? That depends who you ask. Traditional taxi companies have complained that companies like Uber and Lyft undercut their pricing by avoiding taxes and other regulatory hurdles. Cab drivers in New York City, who pay up to $1 million for a medallion conferring the privilege of operating a taxicab in the city, have been particularly vocal. For their part, the transportation network companies say they aren’t running a taxi service. Instead, they are providing a software application that “links people who want to earn money with people willing to pay for a ride.” Uber says its drivers are independent contractors, not company employees.

Whatever Uber is, it is now regulated in North Carolina. The General Assembly enacted S.L. 2015-237 last session, which regulates the operation of transportation network companies (TNCs) like Uber. The act requires that TNCs operating in North Carolina hold a valid permit issued by DMV at an annual cost of $5,000. TNCs also must have a registered agent for service of process, be registered with the Secretary of State, and have a policy that prohibits discrimination based on customers’ geographic departure point or destination or customers’ race, color, national origin, religious belief or affiliation, sex, disability, or age.

Insurance requirements. TNC drivers or the TNC itself must have automobile insurance that meets certain requirements, including providing coverage of at least $1,500,000 for death, injury or property damage arising from an accident that occurs while a driver is providing TNC service.

Safety requirements. New G.S. 20-280.5 requires that TNC drivers have their vehicles inspected annually for safety. And a TNC’s online application must provide the following information to customers who request a ride: a photograph of the driver; license plate number of the vehicle; description of the vehicle; and the location of the vehicle on a map.

Background checks. Before allowing a person to act as a TNC driver, TNCs must perform a local and national criminal background check. The TNC may not allow a person to serve as a TNC driver if the person (1) has three or more moving violations or one major violation in the past three years, (2) has been convicted in the past seven years of driving while impaired, fraud, sexual offenses, use of a motor vehicle to commit a felony, or a crime involving property damage, theft, acts of violence, or acts of terror, (3) is a registered sex offender, (4) does not have a valid driver’s license, (5) does not have proof of registration of the vehicle to be driven, (6) does not have proof of financial responsibility for the vehicle to be driven, or (7) is not at least 19 years old.

Other requirements. The act imposes several other requirements on TNCs, their drivers and their on-line platforms. It requires, for example, that all fees be paid through a TNC’s online application and prohibits the exchange of cash for a TNC service. It also allows airport operators to regulate the use of their facilities by TNCs and TNC drivers. The act is the exclusive source of TNC regulation:  New G.S. 20-280.10 prohibits counties, cities, airport operators, and governmental agencies from imposing fees, requiring licenses, limiting the operation of TNC services, or otherwise regulating TNC services except as provided in the act.

Another win for Uber? Many of the regulatory requirements enacted in S.L. 2015-237 already were part of Uber’s business model. And the additional requirements are unlikely to prove onerous to a company estimated to be worth $50 billion. Thus, Uber, which faced city and state injunctions across the country shortly after its debut, may view this legislation as another notch in its belt of ride-sharing victories.

3 comments on “Need a ride?  Call Uber.  It’s officially regulated.

  1. This is absolutely terrible legislation. I have no dog in the fight as I don’t work for Uber or a similar business and I also don’t work for any taxi company. I am looking at this purely from a public safety standpoint and from a fairness standard. The General Assembly basically codified Uber’s business model. The independent cab drivers got a raw deal on this and essentially will probably end up having to join Uber to stay alive. This bill essentially says to local cities, ignore regulation and safety for your community and leave it up to private companies to “confirm” with the state that they are complying with the law after they pay a 5,000 fee. Taxi companies have a long history in this state of being regulated at the city ordinance level. Municipalities have been able to inspect taxi companies, ensure taximeters are accurate, ensure drivers get sufficient rest, and have the authority to revoke certificates of companies that jeopardize the safety of the community. The state could have passed the same regulations, but allowed local governments to investigate violations and penalize noncompliance by revoking permits.

    I do not feel this legislation is sufficient in order to properly regulate Transportation Network Companies and protect the consumer. The fox will be guarding the henhouse. The legislation says that the Division may implement regulation to implement the law; however there is nothing codified that provides a civil or criminal penalty for violating the law. I don’t think people understand the problems that these “TNCs” provide from a public safety standpoint. Uber is being sued in California for drivers raping customers including one from South Carolina. I think local authorities are better equipped to focus and concentrate on the safety aspects and ensuring compliance.

    Codifying that a TNC driver is an independent contractor and not an employee under Chapter 20 (motor vehicle law) is beyond ridiculous. That statute has no bearing on the test used by the courts and federal law to determine if you are an employee or independent contractor. This is probably the most overwhelming piece of evidence that Uber wrote this legislation. Our current General Assembly has passed some outstanding laws and they have done great things recently, but the approval of this law is just beyond ridiculous and shows the average citizen just how powerful lobbying from powerful corporations can be. The General Assembly ought to be ashamed of this.

  2. As an operating member of the taxi industry in Jacksonville ,N.C ,for the last 43 years , I absolutely feel that the N.C legislature mishandled this situation . When you hear about people filing a complaint against a Taxi driver , or Company , it is handled immediatly by local authorities.This situation with the TNC companies is unfair to our industry, and certainly will not enhance the safety of the customer .If a police officer finds that these Taxi’s or operators are unsafe , unclean ,or un-licenced ,they can put a halt to operation on the spot .What Uber and now , our Legislature have said , is , it’s o.k , fill out a form and send it in , we will get back to you .I have personaly seen some of the Uber cars operating in and out of the Jacksonville Airport , but have yet to see a commercial ,( FOR HIRE )tag on any of them .My question is ,what is to stop any person from buying that amount of insurance and operating independently? It isn’t like the insurance companies would refuse their business. The whole point in a nutshell is this ( OUR N.C LEGISLATURE DROPPED THE BALL & took the easy route , take the money and run .)

  3. I am tying to complain about charges from Uber using a deleted account and cannot find any phone number to try and get over a $100 dollars of my mo ur back!! Do I need to go to the news with this??

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