Uber, Lyft May Hit Pothole on Statewide Quest in New York

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By Gerald B. Silverman

Uber Technologies, Lyft and other ride-hailing companies must overcome resistance in the New York Assembly before getting the uniform, statewide legal structure that will let them achieve their goal of operating in all parts of the state.

Gov. Andrew M. Cuomo (D) and the state Senate’s Republican majority support a bill to allow and regulate ride-hailing statewide. But the Democratic-controlled Assembly supports a measure that would maintain local control over ride-hailing, according to key lawmakers interviewed by Bloomberg BNA.

Ride-hailing is currently permitted in the giant New York City market under the authority of the New York City Taxi and Limousine Commission. But state insurance law requirements and other obstacles have prevented its operations in the rest of the state.

New York has become one of the last frontiers for ride-hailing. Thirty-seven other states have comprehensive ride-hailing laws, according to Lyft.

Cuomo released a proposal in his State of the State speech that would establish a regulatory framework for statewide ride-hailing. The proposal includes oversight by the state Department of Motor Vehicles, background checks for drivers and certain consumer safeguards.

Special Treatment?

The taxi industry said Cuomo’s proposal would give Uber, Lyft and other companies special treatment. They want ride-hailing subject to the same rules and requirements as the conventional taxi and limousine industry.

A Lyft spokesman declined to comment on the bills in the New York state legislature. Uber spokeswoman Alix Anfang told Bloomberg BNA in an email that “Governor Cuomo is working to ensure that Upstate New York is no longer left behind NYC and 47 other states who have access to ridesharing services like Uber. We hope that the Legislature will join him in listening to the voices of New Yorkers over those of special interests.”

Assemblyman Kevin A. Cahill (D), who chairs the chamber’s Committee on Insurance, said ride-hailing companies could operate throughout the state under current law if they sought approval from local authorities, as they did in New York City.

The problem, Cahill told Bloomberg BNA, is that Uber, Lyft and others have not been willing to do so. Instead, they are pushing for state legislation to grant them authority to operate in cities like Buffalo, Syracuse, Rochester and Albany.

At the very least, he said, they need a state law to create a new insurance model that allows them to operate differently from taxi and limousine companies.

Under current law, taxi and limousine companies must purchase a group policy that covers every car in their fleet. The ride-hailing companies want a new model where they would essentially act as insurers, providing their own insurance and having drivers supplement those policies, Cahill said.

Local Authority

“We’re willing to accommodate that,” said Cahill, who plans to re-introduce a measure this year that would permit the new insurance model but also maintain local authority. “But not at the expense of local authority.”

He said the bill, like A. 8195 introduced last year, has strong support in the Assembly. He said he was “fairly certain a significant number of my colleagues won’t support taking that authority away from local governments.”

A much broader bill, which is supported by the ride-hailing companies, is being proposed by Cuomo. State Sen. James L. Seward (R), chairman of the Senate Insurance Committee, has introduced a bill ( S. 1264) that is very similar to Cuomo’s proposal.

Senate Bill

Seward’s bill would establish a regulatory framework for ride-hailing companies to operate throughout the entire state under the authority of the state Department of Motor Vehicles and the Department of Financial Services.

The bill, which is a top Senate priority, would create certain consumer safeguards and requirements. It would also exempt New York City from its requirements.

“We’re very interested in getting this done,” Seward told Bloomberg BNA. “The governor and the Senate are quite close. We just need to bring the Assembly on board.”

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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