Washington state residents who rely on Dolly for the Seattle-based startup’s peer-to-peer moving service are finding their options limited. Because of an ongoing dispute with state regulators, the app no longer allows people in the state to connect with truck owners for help moving.

In October, the Washington Utilities and Transportation Commission (WUTC) stated its intention to deny Dolly’s latest attempt to gain authorization to operate in its home state. The legal battle is preventing Dolly from providing its signature service in Washington: connecting people who need help moving with helpers who have trucks and vans that can get the job done.

The legal battle underscores the tension between regulators trying to enforce years-old laws on tech companies that defy traditional business categories.

Dolly’s legal battle with the WUTC dates back to 2018. The commission informed Dolly it would be classified as a household goods carrier, a category that requires specific permits and authorizations to operate in Washington.

Dolly — like many of its gig economy peers — says it is a technology company that facilitates services between individuals, not a service provider itself. That didn’t fly with the WUTC, which said Dolly was illegally operating as a mover without a license and ordered the company to cease-and-desist until it obtained the proper permits.

Dolly appealed to Washington Gov. Jay Inslee’s office, asking for the rules governing movers in the state to be changed. Inslee issued a statement backing WUTC up.

“I am affirming the UTC’s decision here,” he said. “State law expressly requires household goods carriers to obtain a permit in order to operate regardless of whether those carriers are traditional movers or ‘micro-movers,’ so legislative action is necessary to achieve your desired outcome.”

What followed was a complex back-and-forth between Dolly and the WUTC, which repeatedly found the company was not in compliance with its cease-and-desist order.

In 2018 and 2019, Dolly applied for a household goods permit with several exceptions tied to its unique role as a company that facilitates moves but does not operate a fleet of moving vehicles. Because Dolly doesn’t own moving trucks or employ movers, it is difficult for the company to comply with some parts of the permit. Dolly isn’t able to obtain U.S. Department of Transportation Number, for example.

The Company, through its exemption requests, essentially asks the Commission to create an entirely different regulatory scheme for it based on its use of technology.

“We hope to convince the commissioners that the real losers in all of this are Washingtonians – consumers who want to use our service and Helpers who want to earn badly needed income in a state with an ever-increasing cost of living,” said Kevin Shawver, Dolly’s VP of marketing.

In October, WUTC said it would deny the exemptions, claiming they, “would create a gap in the application and enforcement of the Commission’s household goods carrier regulations, and encourage unlicensed and illegal household goods moves.”

“The Company, through its exemption requests, essentially asks the Commission to create an entirely different regulatory scheme for it based on its use of technology,” WUTC said. “The Commission has clearly stated that it will not sacrifice consumer safety and protection in order to accommodate purported conveniences achieved by technology.”

Dolly has been lobbying the Washington state legislature to create a new category for companies like it but those efforts have not come to fruition.

Dolly was founded in Seattle in 2014. The service is available in 31 markets across the country, including Portland, San Diego, Denver, Chicago, Philadelphia, and Boston. In May, Dolly raised $7.5 million, bringing its total funding to $20 million.

Shawver said that despite WUTC’s latest move, “nothing is decided until the 3 commissioners of the WUTC issue a ruling.”

“We know in the end we will be able to get there with the WUTC because the Dolly service is needed by consumers and good for Washington,” he said. “We remain committed to trying every possible path with the WUTC to change their position.”