Statewide Ridesharing Regulations

A simple solution to the Uber lawsuit

A limousine company based out of Dearborn Heights is suing Uber for failing to abide by Michigan’s 25-year-old Limousine Transportation Act. At first glance, the lawsuit seems like an attempt to take down a competitor: The same limousine company filing the lawsuit recently had its operating license revoked by the state for failure to comply with the same regulations it’s now accusing Uber of not complying with. It’s like when kids get caught whispering in class and their first reaction is: “But he was doing it too!”

Whether this lawsuit has any merit is hard to say. The company is accusing Uber of violating federal racketeering law, but Uber and other ride-sharing technology companies have been operating under local regulations in several different communities in Michigan. Regardless, this case and many various legal issues surrounding ride-sharing could be solved with a simple solution: Create commonsense statewide regulations for ride-sharing services.

There is a package of bills that passed the Michigan House last year that would do just that. These proposed regulations would require ride-sharing companies to acquire a license and register with the state, submit themselves to state audits, keep a certain level of insurance, do background checks on all drivers and get all vehicles inspected by a professional annually. Importantly, this legislation would also prohibit local officials from piling on additional regulations, so as to prevent cities from trying to protect existing taxi and limousine companies from this new form of competition.

Creating statewide regulations, as Ohio just did, would help settle this ongoing issue of how to deal with ride-sharing technologies. One can feel sympathy for taxi and limousine companies who are having their business model disrupted, but neither the state nor cities should step in to protect these incumbent companies. And if Uber gains an advantage through statewide regulation, then taxi regulations should be revisited and modified to create an equal playing field. In the end, the goal of regulation should be to protect and benefit consumers, not preferred companies, industries or technologies.