Massachusetts drafts regulations for car-hailing services like Uber, Lyft

A proposed bill calls for these companies to pay a yearly tax to cover the cost of the government's oversight

Drivers for Web-based, ride-hailing services in Massachusetts would be subject to criminal background checks by the state and their company if a bill unveiled Friday by the state's governor becomes law.

That safety provision is just one outlined in a bill that is designed to regulate companies like Uber and Lyft without stifling them

The proposed law would place such services in a new regulatory category called transportation network companies" and require them to obtain a special license from the state Department of Public Utilities, which oversees other modes of transportation. To cover the cost of this oversight, the companies would be subject to a yearly tax based on the revenue they earn in the state. Details on how the tax would be calculated weren't provided.

The state's background check would entail pulling up all records of an individual's criminal court appearances in Massachusetts. Drivers with criminal backgrounds would be prohibited by the state from working for car-hailing companies. However, the types of offenses that would disqualify a person from driving weren't defined.

The law would require companies like Uber and Lyft to provide the state with a list of its drivers and their addresses and to keep that roster updated. This information would be shared with the registry of motors vehicles and state and local law enforcement. Transportation companies would also have to verify that the vehicles used by drivers are registered in Massachusetts and have passed the state's safety inspection.

In an effort to better identify cars being used by Uber and Lyft drivers, their vehicles would need to include an external maker. Some people have mistakenly entered vehicles that they assumed were their Uber or Lyft rides.

The bill also includes insurance provisions, such as requiring drivers to have at least US$1 million in insurance coverage when transporting passengers.

Under the bill, a five-person public safety advisory committee would be appointed by the governor and include representatives from Boston and two neighboring cities where the service is popular with residents.

Uber backs the legislation, saying the bill would promote innovation and keep Uber drivers and passengers safe, said Meghan Joyce, Uber East Coast general manager, in a statement. Massachusetts residents have shown they support ride-hailing and Lyft will work with the state to pass legislation that maintains this transportation option, according to the company.

Governments are looking to regulate Web-based, ride-hailing companies, which allow people to summon a ride by using an app on their smartphones, as people increasingly use these services instead of taxis to get around. Taxi drivers consider services like Uber and Lyft a threat and have rallied against them.

In the U.S., Arizona, Maryland, Virginia, Tennessee and Utah have enacted legislation to regulate Internet-based passenger services.

Internationally, such businesses have sometimes been accused of running afoul of local laws. South Korean police are investigating Uber over accusations that its service violates the country's transportation and communications laws.

In India, Uber added a panic button to its app after Mumbai officials requested a mechanism that would allow passengers to alert police during an emergency. In December, a woman in the country accused an Uber driver of raping her after she fell asleep during a ride.

Fred O'Connor writes about IT careers and health IT for The IDG News Service. Follow Fred on Twitter at @fredjoconnor. Fred's e-mail address is fred_o'connor@idg.com

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