Uber meeting with Delaware officials

Delaware officials are laying the regulatory groundwork for allowing rides-for-hire services like Uber to operate in the state.

Over the last few months, representatives from the San Francisco startup have met with lawmakers at Legislative Hall in Dover and the Delaware Division of Motor Vehicle to work on regulations.

Uber uses smartphone apps to connect drivers with customers who need rides. Drivers use their own vehicles and the transaction is handled over the app.

Current Delaware law doesn’t address whether the service is allowed. Taxi services are regulated, but Uber officials have argued their drivers are independent contractors and not employees.

On Friday, Delaware Department of Transportation Secretary Jennifer Cohan said the agency and Uber are finalizing a memorandum of understanding that would place guidelines for the service to operate in Delaware. She said the memorandum would exist while DelDOT explores how they can further adjust their regulations to accompany Uber and similar services.

“They’ve been really cooperative with us,” Cohan said.

No timeline was announced.

Cohan said part of the memorandum will deal with the level of background checks Uber drivers will have to go through. Uber puts drivers through seven-year background checks, whereas the state calls for lifetime background checks on certain serious offenses.

“We’re not going to waiver on the public safety aspect,” she said.

DMV spokesman Mike Williams said the agency is looking at regulations “to see how they may need to be adapted to best meet the needs of this new business model.”

Uber spokesman Taylor Bennett would not comment about discussions in Delaware.

“We’ve seen overwhelming demand from riders and drivers across Delaware looking for greater transportation options and economic opportunity, and we’re continuing to explore the market as a home for Uber,” Bennett said.

Uber was launched in 2009 and today operates in 56 countries. Its primary U.S. competitor is Lyft, and both companies have faced intense opposition from the taxicab industry and calls for additional regulations when expanding.

Uber on Friday announced it will cease operating in Kansas City, Mo., after the city started requiring background checks and adequate insurance.

In New Jersey, the tech company is locked in a legislative battle with state officials who want to require higher insurance coverage, criminal background checks and commercial licensing.

Meanwhile, Arizona Gov. Doug Ducey on Friday signed a bill that overhauls rules for ride-hailing companies such as Uber and Lyft and removes regulatory roadblocks to the new and growing services. Similar issues are being considered in Texas and Wisconsin.

John Browning, an attorney and adjunct professor of law at Southern Methodist University who teaches about social media and the law, said rapid changes and advances in technology can pose problems for regulatory and legal processes that weren’t designed to deal with innovations like ridesharing services.

“Law doesn’t keep up with technology very well, unfortunately,” Browning said. “I don’t think the law really had a way of categorizing and dealing with that.”

Browning said that Uber’s legal and legislative battles are “the cost of doing business.”

“As they’ve grown in size and popularity … they’re attracting more attention from more traditional sources of competition,” he said. “They are wearing a bit of a target on their backs because of this.”

Uber officials met with Delaware Gov. Jack Markell and state officials late last year. Markell said at an event at Stanford Law School in late 2014 that he was open to Uber coming to Delaware and said it was important to revitalizing Wilmington and Delaware downtowns.

Wilmington Mayor Dennis Williams said in November that the company was close to finalizing plans to operate in the city. The service has yet to launch in the city.

Williams said it is “highly unlikely” that legislative action would be needed. The state’s public carrier guidelines, which govern taxi and limo services, are mostly regulatory, not legislative, he said.

“Adaptations would need to be addressed more so than ‘made,’” Williams said.

The DMV, as well as some lawmakers, also have to consider the impact Uber would have on traditional public carrier providers. When Uber was announced for Wilmington, taxi drivers expressed concerns that they could not compete with a service that wasn’t as regulated and didn’t require cash.

House Speaker Pete Schwartzkopf, who represents the Delaware beaches, said he had spoken briefly with representatives from Uber outside of his legislative office. Schwartzkopf has concerns about how their service could disrupt beach mainstays like the Jolly Trolley, a fixed-route shuttle service that transports beach bums and barflys.

“Obviously they are going to have to follow whatever laws we have,” he said.

David Hastings, president of Transit U Inc., which includes the Jolly Trolley, said Uber would have a definite impact on his business. Their potential arrival in Delaware is something he has been watching, he added.

If an app-based car service is going to become a reality in the state, than it needs to be on equal regulatory grounds services like his and taxicabs, Hastings said.

“It comes down to apples to apples,” he said.

Contact Jon Offredo at joffredo@delawareonline.com or 678-4271.

What is Uber?

Uber is a smartphone-powered private car service where users can request pickup and transport via an application on their phone. Drivers using their own vehicles locate their passengers based on the GPS and Wi-Fi coordinates from the users’ cell phone.

Payment for the service is all electronic and done over the smartphone application. Rates are based on variables such as traffic and weather.

Uber offers several services, including a low-cost, luxury, and SUV options.