Uber and Lyft stickers. | AP Photo After years of negotiations, Legislature approves bill to regulate car-hail companies

TRENTON — The state Legislature approved a bill on Monday to regulate car-hail companies like Uber and Lyft, a landmark moment that could end years of negotiations over how to govern the industry.

The legislation, if signed by Gov. Chris Christie, would impose a statewide regulatory framework on car-hail companies for the first time in New Jersey.


Car-hail giant Uber, along with its counterpart, Lyft, aggressively lobbied on the issue that was debated for more than 2 1/2 years in Trenton. Uber spent hundreds of thousands of dollars on top lobbyists, and the companies were at odds with taxi industry advocates, who pushed for a patchwork of municipal regulations in what they say was an attempt to force the issue at the Statehouse.

The bill ( S2179/A3695), which imposes insurance requirements, permit fees and background checks, would supersede municipal ordinances, clarifying the legal gray area in which these companies now operate. Uber would still need to pay out $10 million to the city of Newark, as part of an agreement to operate at Newark Liberty International Airport.

“Uber is already here, they don’t even need this bill,” Sen. Joe Kyrillos, a sponsor said on the floor. “We are providing a framework to make it better, make it safer, make it more consistent across the board, rather than this patchwork of laws and rules.”

The Senate approved the bill, 29-5, in an emergency vote after amending it on the floor. The Assembly passed it, 69-7.

Both Uber and Lyft immediately issued statements in support of the legislation.

Craig Ewer, an Uber spokesperson, said the bill would improve mobility and further economic opportunity in the state. Adrian Durbin, a Lyft spokesperson, expressed a similar sentiment, saying it would increase public safety and modern transportation options.

Meanwhile, lawmakers made moves to help the taxi and limo drivers whose industries have suffered during the advent of car-hail networks.

The Legislature approved a related proposal on Monday that would eliminate a sales tax requirement for the limo industry. Limo drivers, unlike taxi and car-hail drivers, must now pay the sales tax on all rides that stay within the state.

It’s unclear what the bill ( S2315/A3696) would cost the state. A fiscal note prepared by the non-partisan Office of Legislative Services said that cutting this tax would result in an indeterminate loss of revenue. In 2011, OLS estimated that the state could lose $27.1 million annually from a cut, but that figure was based on all rides, including all interstate ones.

“It’s one more step towards parity,” Jason Sharenow, president of the limousine association of New Jersey, said in a phone interview on Monday. “It should give some much needed relief to the limousine industry.”

Separately, Sen. Paul Sarlo, a sponsor of the car-hail legislation, pledged to work with lawmakers to find ways that would even the playing field for the taxi industry.

Lionel Leach, president of CWA Local 1039, which lobbied for the taxi industry, said although the legislation doesn’t go as far as he would have liked, it is a start.

“If it wasn’t for the CWA and our taxi drivers, these issues would not have been dealt with,” he said. “We have half the pie. We still have some pieces to get, but it’s a win.”

The car-hail legislation went through several iterations, with two of the biggest sticking points revolving around whether to fingerprint drivers, and over the level of insurance requirements.

The debate largely centered on fingerprinting — with the companies saying that they use more comprehensive third-party checks and that fingerprinting tends to adversely affect drivers of color. Some lawmakers and advocates for the taxi industry, which must submit to fingerprint checks, fired back, saying not doing the check would be a safety hazard.

Under the legislation, the fingerprinting decision would be punted to the state’s attorney general. The attorney general would choose whether to accept the companies’ third-party background check without fingerprinting, or force drivers to undergo a state police check that includes fingerprinting.

Leach, who has fiercely advocated for these fingerprint checks, vowed to launch a letter writing campaign to the attorney general’s office if bill becomes law.

“It’s a safety precaution,” he said. “It’s up to Uber and Lyft to meet that standard, not for us to dummy down our standard.”

The bill was gaining momentum in October when it cleared the Assembly, but was pulled from the Senate voting list as the New Jersey Association for Justice, a group that represents trial court lawyers, accelerated its lobbying push to change the policy.

Negotiations over the insurance requirements dragged on for weeks, and culminated with Uber blaming Sen. Nicholas Scutari, who was advocating for insurance changes, for jeopardizing the bill. Scutari denounced the company, saying he wanted to protect his constituents.

Days later, all parties reached an agreement.

The amendments make several changes to heighten the requirements, but mainly provide more coverage in the event of an accident.

Under the legislation, Uber and Lyft must provide more than one layer of insurance, including $1.5 million in commercial insurance coverage — a policy that applies when the car-hail driver is at fault in the event of an accident. The new policy will also cover accidents when another driver who is uninsured or lacks an adequate insurance policy is at fault.

“We are very pleased that appropriate insurance coverage has been provided to help those who are injured while riding in these vehicles,” Michael G. Donahue, president of the New Jersey Association for Justice, said in a statement after the bill cleared both houses.

Christopher Stark, vice president for the Insurance Council of New Jersey -- which backed the bill -- said in a statement that "ICNJ is pleased that this long overdue legislation is headed to Governor Christie's desk."

Assemblyman Joe Lagana, another sponsor, also issued a statement after the vote that this proposal will lay the groundwork for further expansion of car-hail companies in the state.

“No longer will there be confusion about the responsibilities of companies or the rights of their customers,” he said. “New Jersey is taking action to strengthen an industry that is both a source of on-demand transportation for passengers and a source of income for men and women working hard to make ends meet.”