Michigan Senate green lights Uber, Lyft regulations

Jonathan Oosting
Detroit News Lansing Bureau

Lansing — Uber, Lyft and other ride-sharing companies would face statewide regulations for the first time under legislation approved by wide margins Thursday in the Michigan Senate.

The five-bill package, headed back to the House for consideration, would phase out local rules that vary by community. It would create a new regulatory act to govern both ride-sharing and traditional taxi cab companies in the same fashion, a move seen as a compromise between competitors.

“Part of it was to level the playing field, and part of it was to make sure they were operating within a regulator structure,” said Sen. Tory Rocca, R-Sterling Heights. Uber and Lyft “were operating for years outside of the legal requirements. It was important to have them operating within the law.”

The proposed regulations include company-conducted background checks for drivers, no-fault insurance requirements and inspections on vehicles more than five years old. Ride-sharing and taxi companies would each face state registration fees based on the number of vehicles they employ, topping out at $30,000 for more than 1,000 vehicles.

Any local regulations governing companies like Uber and Lyft would be invalidated in four years.

“It will eliminate a lot of local regulations,” Rocca said. “Frankly, if you’re going to Metro Detroit where there are so many communities right next to each other in such a small area, it does seem a bit cumbersome for one company to be regulated by so many individual communities.”

Uber and Lyft, which have exploded in popularity, connect customers to local vehicle owners via smart phone applications. The ride-sharing companies had urged the Legislature to adopt statewide regulations to help them avoid a local patchwork of rules.

Uber also celebrated Thursday’s vote, saying the legislation is “critical to preserving Michiganders’ ability to utilize ridesharing across the state.”

Lyft also applauded the Senate for “recognizing the benefits modern transportation options like Lyft bring to communities across Michigan.”

Both companies are urging the House to sign off Senate changes to the long-discussed proposal before legislators break for the year in two weeks.

The legislation would require Uber and Lyft to conduct national criminal background checks on drivers, cross-check their names in the state’s sex offender registry and obtain driving history reports.

The Department of Licensing and Regulatory Affairs would oversee the new rules and could review company background check procedures at any time.

Sen. Margaret O’Brien, R-Portage, wanted to take the background checks a step further by requiring Uber and Lyft to subject their drivers to fingerprint background checks.

O’Brien represents Kalamazoo, where an Uber driver allegedly killed six people and injured two others in a shooting rampage in February. Suspected shooter Jason Daltman is expected to use an insanity defense at trial.

“I recognize that this package would not have changed anything for the people in my area, but it’s very important to me that I be vigilant and really defend the safety of the people in my community and across the state,” O’Brien said.

Her proposed amendment was rejected, partially due to fears that Uber and Lyft could pull out of Michigan if the state required fingerprinting. The company ended service this year in Austin, Texas, because of fingerprinting requirements, arguing its own background checks were more effective.

Sen. Rebekah Warren, D-Ann Arbor, was one of four legislators who voted against the main bill Thursday, citing public safety concerns due to the lack of stronger background check requirements.

“We actually removed the requirement for chauffer’s licenses for those who are driving taxis and limos in what we did today,” Warren said. “Instead of stepping forward on public safety, I feel like we took a big step backwards.”