Rejecting safety concerns raised by his predecessor, Gov. Doug Ducey has given the go-ahead for unregulated ride-share services.
Ducey and Andy Tobin, his new director of the Department of Weights and Measures, announced late Wednesday the state is suspending all investigations into individuals who drive for Uber and Lyft. The agency had pursued them for offering rides for pay without meeting the state-mandated legal requirements necessary for those who operate taxis and limousines.
Gubernatorial press aide Daniel Scarpinato said that means that drivers can immediately solicit business for the Super Bowl and other events without fear of being cited.
The move comes less than a year after Gov. Jan Brewer vetoed legislation which would have specifically legalized the practice and exempted the drivers from most of the same requirements for insurance and safety inspections that apply to taxis. Brewer said the measure would have opened the door for rideshare companies to operate “without the fundamental safeguards necessary to protect passengers, drivers and the public.”
“The governor believes we need to ensure consumer protections and public safety,” Scarpinato said, things that have to be worked out at the Legislature. But he said Ducey sees no reason they can’t operate in the meantime, saying the laws the state had sought to enforce against the drivers are “outdated” and those public safety concerns “need to be balanced against what is a new small business, entrepreneurial endeavor that we’re seeing happening.”
“And we want to make sure they continue to operate, particularly during the Super Bowl,” Scarpinato said.
Uber and Lyft have a business model built on people being able to order rides online. The companies then send out messages to individuals who, using their own vehicles, are willing to pick up patrons and, for a fee, take them to their destination.
Passengers pay the fee online – it set by the company based on demand – with the company forwarding a share of that to the driver.
The big issue has been insurance.
Last year, lobbyists for the two companies pushed through legislation which they said dealt with the problem, imposing some new rules, regulations and a mandate to carry insurance.
But Don Hughes, an adviser to Brewer, said there were gaps in that requirement.
He also said the legislation involved relying on the individual policies of the vehicle owners. And Hughes said most such policies specifically exclude coverage for commercial activities.
Brewer said the gaps in the insurance requirement actually could make coverage more expensive for everyone else and even make car loans more expensive.
“It also would subject consumers to drivers who would not have been tested for drugs, unlike what is required for school bus, light rail, taxi and other public transportation drivers,” the governor wrote in her veto message.
Some drivers have continued to provide rides despite the veto, resulting in citations issued by the Department of Weights and Measures. Wednesday’s edict puts a halt to all that.
According to Scarpinato, this was not a unilateral decision by Ducey but more of a “collaborative effort” with Tobin. But Tobin, who was House speaker last year, actually voted against waiving some of the requirements for the companies to operate.
The governor’s decision drew criticism from David Leibowitz, spokesman for Total Transit, one of the taxi companies that had objected to providing exemptions from taxi laws to Uber and Lyft and their drivers.
Leibowitz said the fight is no longer about things like drug testing, saying that’s up to each company to decide. But he said the lack of requirements for commercial insurance at appropriate levels result in risks to the public.