Need a ride?  Call Uber.  It’s officially regulated.

Uber was the talk of the table during our Thanksgiving meal. One of my cousins drives for Uber in her spare time. So does her boyfriend. They compete for who can earn the most extra spending money. I’ve used Uber myself several times. I’ve rated all my drivers a 5. And I’ve never worried about whether taking Uber was safe. But for those who do (my mother and aunt), legislation enacted by the General Assembly last session may provide some assurance. 

First, what is Uber?  Uber is a transportation network company headquartered in San Francisco that provides a taxi-like service for users of its mobile application. A network of independent contractors in cities around the country provide Uber services in their personal cars. To use Uber services, a rider registers with the company, providing her name, email address, mobile number, and credit card information. After registering, a rider opens the mobile application on her phone, which defaults to her location. She can then see the precise location of Uber drivers nearest to her and an estimate of how soon one could arrive to pick her up. I just opened the app on my phone, and an Uber driver could be here in 5 minutes. When I use Uber, the trip is automatically billed to the credit card I have on file. Uber says there is no need to tip.

Uber is the most talked about transportation network company in my circles, but it isn’t the only such company. Others include Lyft (this is the company whose drivers initially adorned their vehicles with a large pink mustaches), and Wingz, which provides airport service only.

Isn’t this just another name for a taxi? That depends who you ask. Traditional taxi companies have complained that companies like Uber and Lyft undercut their pricing by avoiding taxes and other regulatory hurdles. Cab drivers in New York City, who pay up to $1 million for a medallion conferring the privilege of operating a taxicab in the city, have been particularly vocal. For their part, the transportation network companies say they aren’t running a taxi service. Instead, they are providing a software application that “links people who want to earn money with people willing to pay for a ride.” Uber says its drivers are independent contractors, not company employees.

Whatever Uber is, it is now regulated in North Carolina. The General Assembly enacted S.L. 2015-237 last session, which regulates the operation of transportation network companies (TNCs) like Uber. The act requires that TNCs operating in North Carolina hold a valid permit issued by DMV at an annual cost of $5,000. TNCs also must have a registered agent for service of process, be registered with the Secretary of State, and have a policy that prohibits discrimination based on customers’ geographic departure point or destination or customers’ race, color, national origin, religious belief or affiliation, sex, disability, or age.

Insurance requirements. TNC drivers or the TNC itself must have automobile insurance that meets certain requirements, including providing coverage of at least $1,500,000 for death, injury or property damage arising from an accident that occurs while a driver is providing TNC service.

Safety requirements. New G.S. 20-280.5 requires that TNC drivers have their vehicles inspected annually for safety. And a TNC’s online application must provide the following information to customers who request a ride: a photograph of the driver; license plate number of the vehicle; description of the vehicle; and the location of the vehicle on a map.

Background checks. Before allowing a person to act as a TNC driver, TNCs must perform a local and national criminal background check. The TNC may not allow a person to serve as a TNC driver if the person (1) has three or more moving violations or one major violation in the past three years, (2) has been convicted in the past seven years of driving while impaired, fraud, sexual offenses, use of a motor vehicle to commit a felony, or a crime involving property damage, theft, acts of violence, or acts of terror, (3) is a registered sex offender, (4) does not have a valid driver’s license, (5) does not have proof of registration of the vehicle to be driven, (6) does not have proof of financial responsibility for the vehicle to be driven, or (7) is not at least 19 years old.

Other requirements. The act imposes several other requirements on TNCs, their drivers and their on-line platforms. It requires, for example, that all fees be paid through a TNC’s online application and prohibits the exchange of cash for a TNC service. It also allows airport operators to regulate the use of their facilities by TNCs and TNC drivers. The act is the exclusive source of TNC regulation:  New G.S. 20-280.10 prohibits counties, cities, airport operators, and governmental agencies from imposing fees, requiring licenses, limiting the operation of TNC services, or otherwise regulating TNC services except as provided in the act.

Another win for Uber? Many of the regulatory requirements enacted in S.L. 2015-237 already were part of Uber’s business model. And the additional requirements are unlikely to prove onerous to a company estimated to be worth $50 billion. Thus, Uber, which faced city and state injunctions across the country shortly after its debut, may view this legislation as another notch in its belt of ride-sharing victories.

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