Last week, Gov. John Kasich signed off on new regulations that outline insurance obligations, background checks and other requirements for the digital platforms and their drivers.
That means Uber drivers in Columbus won’t have to obtain city licenses, submit to additional city background checks or pass city vehicle inspections once the new law takes effect.
They won’t have to follow local ordinances in other cities that have passed regulations, either, unless one of those cities mounts a successful home-rule legal challenge. Uber has drivers in Columbus, Akron, Cincinnati, Cleveland, Dayton and Toledo. Lyft left Columbus but still operates in Akron, Bowling Green, Cincinnati, Cleveland and Toledo.
Columbus officials have discussed a legal challenge to the state law but have not made a decision about going to court.
State Rep. Mike Duffy said leaving rule-making to cities creates a patchwork of regulation for companies that are operating across the state.
“You want one statewide approval process that’s streamlined and not 20 different offices you have to go to in 20 different cities,” said Duffy, the Worthington Republican who sponsored the bill.
The companies let drivers use their personal vehicles as taxis and dispatch them through a smartphone app. Passengers use the app to call for rides and pay for them with a registered credit card. Both companies support the statewide rules.
The new Ohio law will require companies to pay a $5,000 permit fee to the Public Utilities Commission of Ohio, ensure that drivers are covered by a liability insurance policy when they are logged on to the app and conduct background checks on its drivers.
It also bars drivers from picking up passengers off the street when they aren’t hired through the smartphone app. Drivers must be at least 19 years old under the new law.
While drivers are logged in to the app but not providing a ride, insurance policies must provide at least $100,000 of coverage for injuries to two or more people in an accident and at least $25,000 of property-damage coverage.
While drivers are providing a ride, the insurance policy must bump up to $1 million for liability and property damage.
“There was a lot of confusion in the marketplace about whether people had coverage if you were an Uber driver, whether you had coverage the entire time you’re involved in that process,” said Dan Kelso, Ohio Insurance Institute president. “It’s not an issue just in Ohio. It’s been a national issue.”
Most of the new state rules reflect changes that Columbus City Councilman Zach Klein wanted for the city ordinance.
Columbus’ rules took effect in September 2014 amid outcry from the taxi industry and opposition from Uber and Lyft. They required drivers to apply for a license through the city’s license administration, pay a $35 fee and submit to a background check and vehicle inspection. The ordinance also laid out insurance rules.
The companies argued against those requirements, saying they conduct their own background checks and have rules for the age of vehicles used on their networks.
Lyft ultimately left Columbus, citing the new rules as too burdensome. The city has about 3,000 active licenses for Uber drivers.
City officials delayed renewals this year for those licenses because they knew state legislators were working on a bill that could pre-empt local ordinances, and they were looking to make their own changes, said Michael Julian, assistant director in the Department of Public Safety.
Uber drivers now are supposed to renew their licenses at the end of January, but Julian said that might be delayed or even canceled because of the new state law.
“We’re going to continue to enforce our code until (the law) goes into effect officially,” he said.
Klein said the national trend is toward regulating companies and leaving it to them to police their drivers. Columbus’ regulations were among the first in the country before that trend emerged, he said.
“It’s concerning to me whenever Columbus is out on an island with regulation that could be excessive,” he said.
©2015 The Columbus Dispatch (Columbus, Ohio). Distributed by Tribune Content Agency, LLC.
