Virginia Reaches Agreement With Lyft, Uber

The agreement provides cover for Lyft and Uber to run their services until February, when state legislators are expected to pursue a ­permanent framework under which those and similar companies could operate.

by Dave Forster, McClatchy News Service / August 7, 2014

Gov. Terry McAuliffe and Attorney General Mark Herring announced Wednesday that Lyft and Uber can operate legally in Virginia, putting the commonwealth on a short list of states where the popular car services are formally recognized and regulated.

McAuliffe and Herring framed their deal with the companies as a win for innovation and choice. The taxi and limousine industry decried it as a double standard.

“It really ticks me off after 18 years of spending all this money to comply with the law that the governor’s going to go ahead and give the farm away,” said Bob Hunter, owner of Royal Coach Limousine in Chesapeake.

The agreement provides cover for Lyft and Uber to run their mobile-app-based ride services at least until February, when state legislators are expected to pursue a ­permanent framework under which those and similar companies could operate.

Hundreds of drivers have been providing trips and earning paychecks through the smartphone-based platforms in Hampton Roads and Northern Virginia in defiance of a cease-and-desist order that the Virginia Department of Motor Vehicles issued against the companies in June.

Lyft and Uber applied for temporary authority to operate in Virginia after receiving the order. The companies had also been fined and their drivers threatened with civil penalties, but further state action was put on hold while the McAuliffe administration and Herring’s office worked out the agreement released Wednesday.

In letters to the companies, DMV Commissioner Richard Holcomb said his agency approved their applications “in view of the strong public support” for their services and “the Commonwealth’s commitment to encouraging enterprise and innovation.”

Holcomb wrote that the companies’ technologies streamline travel arrangements in such a way that it stimulates demand, so much so that it appears a “significant portion” of their customers would not otherwise use for-hire transportation.

He also wrote that Lyft and Uber, in their applications, provided persuasive information that they may help reduce DUI rates, get more timely service in emergencies and improve overall satisfaction with for-hire transportation.

The DMV struck a far different tone in April. Then, an official for the agency told Lyft in an email that the DMV did not believe the circumstances warranted the granting of temporary operating authority because it saw no “immediate and urgent need” and no lack of providers for the services Lyft wanted to provide.

Drivers for Lyft and Uber use their personal vehicles. The app is used to request rides, rate drivers and passengers, and collect payment via credit card information. The companies expanded into Hampton Roads this spring, following their spread to Northern Virginia and dozens of other areas of the country.

Representatives for the governor’s office and the DMV had no estimates of the number of drivers operating in Virginia.

McAuliffe said in a statement that technology, particularly with regard to smartphones, is advancing rapidly, and he was pleased the parties were able to find a “swift solution that will provide Virginia’s workers, students, and families with more transportation options.”

“In order for Virginia to remain economically competitive, it is important that we welcome innovative companies like Uber and Lyft and provide them with the resources they need to safely and effectively operate in the Commonwealth,” he said.

Herring said in a statement that he hopes other states “will look to Virginia as a model for how to safely integrate the so-called sharing economy.” Hours after the announcement, he sent an email blast through his political action committee touting the agreement and seeking donations.

A group of cab companies based in Northern Virginia said in a statement that the agreement in Virginia followed a nationwide strategy by Lyft and Uber in which they start service without complying with state or local laws, then seek relief from the highest levels of government when there is legal action against them.

“As the Chief Law Enforcement Officer of Virginia, the Attorney General should be enforcing the laws, not promoting a double standard for well-connected Silicon Valley companies,” Spencer Kimball, owner of Northern Virginia Checkered Cab, said in the statement.

The agreement provides a list of conditions the companies must meet, including:

- Criminal background checks of drivers, with convictions for any felony, fraud, sexual offense or violent crime, or sex offender registration triggering immediate disqualification.

- Primary insurance coverage for drivers from the time they accept a trip request until the passenger exits the vehicle, and contingent liability coverage during the time the driver is logged on to the service’s app but not providing service.

- Documentation of background, sex offender registry and driving record checks for each driver, as well as proof of insurance, vehicle safety inspection and other records, available to the DMV on demand so it can investigate complaints.

- Features to help customers identify their driver and vehicle, including from the outside of the vehicle.

- Rate transparency and documentation.

- A requirement that drivers accept rides only through the companies’ mobile apps, with a prohibition against “street hails.”

Chelsea Wilson, a spokeswoman for Lyft, said by email that the requirements won’t have a significant impact on their operations. Her company, as well as Uber, already offers insurance coverage for drivers and conducts background checks.

©2014 The Virginian-Pilot (Norfolk, Va.)