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Are Ride-Hailing Regulations Going National?

As Reported By Chris Teale for Smart Cities Dive

Lawmakers assailed Uber and Lyft for skipping out on a Congressional hearing this week, noting the companies need to “clean up their acts” in the wake of regulatory consideration.

WASHINGTON — Lawmakers pledged legislation on Wednesday to better regulate the ride-hailing industry following intense criticism of mobility giants Uber and Lyft.

The companies came under fire especially for their records on safety and labor practices, with members of the U.S. House Transportation and Infrastructure Committee’s Subcommittee on Highways and Transit promising to explore national, wide-ranging regulations.

The hearing showed federal lawmakers making real moves to combat some of the issues that dog ride-hailing. But Uber and Lyft were not present at the hearing, and neither was competitor Via.

In letters this week to Uber CEO Dara Khosrowshahi and Lyft CEO Logan Green, committee chair Rep. Peter DeFazio, D-OR, said he will “pursue legislative solutions to address numerous issues plaguing the ride-hailing industry, many of which will be raised at this hearing.” During the hearing, DeFazio took the companies to task for their absence.

“The failure of Uber and Lyft to appear at this hearing is a telling sign that they would rather suffer a public lashing than answer questions on the record about their operations,” he said, listing a series of violations by the companies and raising his voice steadily as he did so. DeFazio said legislating will be done with or without the companies.

“This hearing should put those companies, Uber and Lyft, on notice that for their long-term survival, and for any hope of ever partnering with agencies who utilize federal funds, they are going to have to clean up their acts,” DeFazio said. “If they want to come forward, we’ll hear from them, but if not, we’ll legislate without them.”

A Lyft spokeswoman said the company takes its work “extremely seriously” and that safety is “fundamental to these efforts.”

“We have had many productive discussions with Member offices of the House Transportation & Infrastructure subcommittee, and are encouraged by the willingness to collaborate on meaningful solutions and policy,” a spokeswoman told Smart Cities Dive in an email. “We look forward to growing awareness and understanding of Lyft’s positive impact on communities.”

In an email, an Uber spokesperson did not answer a question on why the company declined to testify, but said they want to cooperate.

“We have a rich history of productive conversations with this committee and all federal lawmakers — and look forward to continuing to drive towards solutions that keep all users of the platform safe,” the spokesperson said.

Safety
While Uber and Lyft have both taken steps to improve safety on their platforms, lawmakers said progress has been far too slow, especially given the series of high-profile incidents involving ride-hailing drivers in recent years.

They particularly focused on the case of Samantha Josephson, a University of South Carolina senior who was killed last March by a man pretending to be the Uber driver she had hailed.

In response to the murder of someone who grew up in his district, Rep. Chris Smith, R-NJ, filed a bill known as Sami’s Law to protect ride-hailing passengers from assault. The legislation would require front license plates and scannable codes on both back passenger-side windows, which could be scanned by a smartphone before entering the vehicle. Passengers could also opt for a four-digit PIN number to verify.

The bill would require the Government Accountability Office (GAO) to study instances of rider or driver assault and examine background checks, and would also ban the sale of Uber and Lyft signs from anyone other than the companies themselves.

“We’re not looking to eliminate” ride-hailing, Smith testified during the hearing. “We’re looking to make sure when you get into that backseat of that Uber or Lyft, it’s safe.”

“This hearing should put those companies, Uber and Lyft, on notice that for their long-term survival … they are going to have to clean up their acts.”
Rep. Peter DeFazio, D-OR
Chair, House Transportation and Infrastructure Committee

A major tenet of lawmakers’ concerns around ride-hailing is over background checks, which several said are insufficient and sometimes lead to criminals being able to drive for the companies.

DeFazio said in his district, “a dozen applicants with serious criminal convictions, including a convicted murderer and a registered sex offender,” could drive for Uber and Lyft under their screening process until the local police department performed more stringent checks and removed them.

Companies have pushed back on stronger background checks, including with the use of fingerprinting, saying they are discriminatory against some drivers. But during testimony, Paul Miller, legislative counsel for The Transportation Alliance, which represents for-hire vehicle providers, said that is “more of a myth,” and lawmakers agreed more must be done.

“Faulty background checks and insufficient safety barriers are putting passengers in Florida and throughout the nation at serious risk,” Rep. Frederica Wilson, D-FL, said.

Uber contends that its “significant investments” in safety features shows it is moving in the right direction. The company said it has announced more safety features in the past year than they did in the previous eight years, including initiatives to strengthen the screening process and features like an emergency button for riders and drivers that connects them directly to 911 operators.

While there was plenty of criticism of the companies’ background check processes and calls for that to be tightened up with legislation, Rep. Lloyd Smucker, R-PA, said drivers should not all be tarred with the same brush due to a few bad apples. He said that any legislation should reflect that only a minority of drivers are involved in criminal acts.

“I’ve talked to many Uber and Lyft drivers in my district who are grateful for the opportunity to have a part-time job or something of that sort,” Smucker said. “None of them have assaulted anyone, none of them have murdered anyone. The idea I’ve heard today bashing all Uber and Lyft drivers due to criminality and horrific crimes of a few of them, it’s insulting.”

Labor
City-level regulations of ride-hailing have long been focused on labor issues like instituting a minimum wage for drivers, with Seattle pushing to be the first to have an independent center dedicated to resolving disputes between drivers and the companies.

At the state level, California broke new ground with the passage of legislation this year to limit the classification of workers as independent contractors rather than employees, allowing them greater labor protections and the ability to unionize. Meanwhile, drivers in New York have been pushing to unionize with support from the Independent Drivers Guild.

Khosrowshahi has previously called such regulations “malarkey,” while the company has argued in various lawsuits and depositions that people who drive for the platform are instead “independent, third-party transportation providers,” rather than drivers.

On a conference call with reporters, Uber Chief Legal Officer Tony West pledged to band together with Lyft and spend tens of millions of dollars on a campaign to repeal the law in California through ballot measure.

But the contention of drivers being independent contractors combined with earnings struggles have come under fire, including from the Transportation Trades Department, AFL-CIO (TTD), a coalition of 33 unions.

In a new report, TTD found that drivers make less than the minimum wage of the cities where they operate, and have no recourse to improve their earnings.

During testimony on Capitol Hill, TTD President Larry Willis said it is part of a pattern where ride-hailing companies “sidestep any oversight or regulation that would provide accountability and ensure the wellbeing of drivers and passengers.”

To combat that, Rep. John Garamendi, D-CA, argued that California’s bill, AB5, could be a good model for national legislation to ensure more labor protections for drivers.

“It really comes down to who controls the time and the job itself,” he said. “In the case of Uber and Lyft, it’s been determined in California very clearly by the Supreme Court and in court cases, that it is the companies, Uber and Lyft, that controls the timing, availability and access of the work.”

Transposing state-level legislation onto a national scale could be difficult, especially in an industry as tricky to define as the gig economy. Rep. Pete Stauber, R-MN, warned that legislators should not “blindly follow the state of California” given the differences between it and other states, while Rep. Carol Miller, R-WV, said that reclassifying drivers as employees could remove the flexibility and part-time work many crave.

“Most of the drivers in my district only drive part-time to earn extra money on top of their full-time job, and I worry that reclassifying contractors can take away the flexibility drivers rely on to drive… and will drastically increase the time riders will need to wait for a ride, and in turn could also result in a return to pre-ride-sharing levels of accidents of people [driving under the influence] since ride-sharing will be less convenient and available,” she said.

Subcommittee chair Del. Eleanor Holmes Norton, D-DC, said that such measures could work, however, as it is important to respect drivers as employees and give them the benefits afforded to full-time workers.

“I think making sure those workers are at least given the protection of employees and collective bargaining rights, I think it’s absolutely essential,” she said.

Holmes Norton pledged to make progress on regulating the industry at the federal level and said that while ride-hailing companies did not appear, she hoped to see them in Congress soon to offer their suggestions.

“Congress cannot avoid its responsibility to engage and investigate its role in overseeing this industry,” she said. “Uber and Lyft have missed an important opportunity for them, but that will not stop this committee or subcommittee from doing its duty.”

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