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December 19th, 2016 | Debbie Lamb, Sterling Talent Solutions

States Propose Strict Ride-Sharing Regulations

Stricter Ride-Sharing Rules | Sterling

Ride-sharing services, such as Uber and Lyft, are transforming the way people think about getting to their destinations across the city or even just around a big city block. As ride-sharing services become more popular across the country, many states and cities are debating and enacting ride-sharing rules and regulations to protect the drivers as well as their passengers. Many states including California and Massachusetts are enacting strict background screening laws staring on January 1, 2017. Other states, such as Michigan have new rules working their way through the legislative process.

Massachusetts Ride-sharing Law

Starting in2017, Massachusetts will require ride service companies to perform the strictest background checks on their drivers in the United States. The new rules would require independent drivers who provide taxi-like services to pass state stringent background checks, including criminal and sex offender record checks. The background checks start January 6, 2017 and must be completed by April 3, 2017. The screening schedule is about a year ahead of the schedule based dictated by a law approved earlier this year by the Massachusetts legislature. The governor of Massachusetts, Charlie Baker said, “The new protocols could establish a national standard for screening those who drive for the ride-hailing firms.”

Lyft spokesman, Adrian Durbin described the new agreement with Massachusetts with CNBC, “We are pleased to reach an agreement with the Baker Administration that maintains the high safety standards we have always observed while keeping modern transportation options like Lyft available across the state.”

The criminal background checks will be conducted by a newly created division of the Department of Public Utilities. The ride-sharing companies will be required to perform two annual checks of driving records. The law is based on a two-tiered driver screening system with one check performed by the company and the other by the state. Both Uber and Lyft currently perform background checks on their drivers. Uber recently announced an additional security measure which will require drivers to take a photo of themselves before signing on to the Uber app and accepting new rides. The new Massachusetts the law does not mandate that ride-sharing drivers be fingerprinted, but does set new insurance standards and pricing guidelines for the ride-sharing companies.

Michigan Proposed Legislation

The Michigan legislature is voting on a five-bill package which phases out local ride-sharing rules by community and places regulation under statewide regulations. The state would create a new regulatory act to govern both ride-sharing and traditional taxi cab companies in the same manner.

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. Uber and Lyft drivers would be required to undergo national criminal background checks, cross-check on the state’s sex offender registry and share their driving history reports. Michigan’s Department of Licensing and Regulatory Affairs would oversee the new regulations and could review the taxi and ride-sharing company background check procedures at any time.

Background Screening for Ride-sharing Companies

Currently, ride-sharing services do not require fingerprinting screening of drivers before they start accepting drivers. At the moment, there is no federal fingerprinting standard for ride-hailing service drivers allowing each state and city to set their own screening rules. Because of this instability in fingerprinting requirements, a comprehensive name-based background check is a better alternative as it pulls criminal background information from a larger pool of sources, including local, state and federal criminal records.

Feeling safe and secure is the most important component to having a good ride-sharing experience. Increased security procedures and more inclusive criminal background checks will give passengers peace of mind when they get into the vehicle. Expect to see more city and state legislation to be debated and voted on to regulate the background screening industry in 2017.

As ride-sharing applications continue to grow, ride-sharing companies are increasing their responsibility to properly screen their drivers with a comprehensive name-based check. Find out more information detailing the pros and cons of fingerprinting and comprehensive background screening in “Fingerprints vs. Name-Based Background Checks: And the Winner is…

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.