New State Law Regulates Uber, Lyft and Others

Those who view Uber, Lyft and other ridesharing providers to be mavericks, renegades, or otherwise unregulated options in the world of transportation can rest a little easier thanks to word from the Michigan Department of Licensing and Regulatory Affairs, or LARA.

Uber, Lyft and other rideshare businesses defined as transportation network companies (TNC), will now be state regulated the same as limousine and taxicab carriers according to the Limousine, Taxicab, and Transportation Network Company Act (PA 345), effective today. The authority to regulate these ride services is under LARA’s Corporations, Securities and Commercial Licensing Bureau (CSCL).

Julia Dale is Director of CSCL in Michigan. She tells us, “As transportation options continue to increase, we look forward to helping ensure the safety of all Michiganders who look for convenient and affordable ways to get around.” She notes, “By vetting prospective companies, we’re also helping protect those who want to earn extra income by providing rides.”

The Act helps ensure public safety by mandating criminal background checks of drivers and inspections on vehicles more than five years old by a licensed mechanic. There is a zero-tolerance policy for drivers who use drugs or alcohol while operating a vehicle. Registered companies shall adopt a nondiscrimination policy with respect to passengers and potential passengers, and their drivers shall comply with the policy. Passengers with special needs must be accommodated at no additional charge.

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Companies register with LARA by submitting an application along with business entity documents, proof of insurance and detailed signage or an emblem for LARA to approve. Companies pay an application fee ranging from $25 – $100, and an annual registration fee ranging from $100 – $30,000. Fees are set on a per vehicle basis, with a maximum fee based on 1,000 vehicles.

Under the Act, drivers of a registered company must:

Be at least 19 years old…

Have a valid driver’s license issued from Michigan or another state…

Not have more than four moving violations or one major violation within the last three years…

Not be listed on the National Sex Offender Public Website…

Not have any felony convictions within the last five years.

LARA has authority to audit background records of drivers at any time and other types of records, but not more than twice, annually.

A chauffeur’s license is not required. The new law amends the Michigan Vehicle Code to specify that “chauffeur” does not include a limousine, taxicab, or TNC driver. Nor is a limousine or taxicab considered a “commercial vehicle” that otherwise requires such an operator to obtain a chauffeur license.

A limousine carrier, taxicab carrier or TNC or an officer or agent of any of the three who requires or knowingly permits a driver to drive or operate a limo, taxicab or personal vehicle in violation of the law is guilty of a misdemeanor punishable by a fine of not more than $1,000 per violation or imprisonment for not more than 90 days or both. LARA may also assess a fine against a person who violates the Act that covers the actual cost to the department of the investigation and enforcement of the violations, including attorney fees.

For more information and the application to register as a TNC, limousine carrier or taxicab carrier go to: www.michigan.gov/tnc. Applicants with questions may contact CSCL’s Commercial Licensing Division at (517) 241-9221 or by e-mail at: CSCLonline@michigan.gov.

The Act moves the regulation of taxicab carriers from local to state jurisdiction, and moves the regulation of limousine carriers (less than eight passengers) from the Michigan Department of Transportation to LARA. Michigan joins more than three dozen states that have similar laws in place.