NJ Legislature Tightens Rules For Uber, Lyft

That could change soon, pending Gov. Christie's approval.

During a marathon session before the holidays, the Democratic-controlled Legislature voted overwhelmingly to pass a bill that specifies how much insurance ride-hailing companies must maintain, and establishes requirements for conducting background checks on drivers.

So-called transportation network companies would be prohibited from discriminating against riders based on their destination, race, age, sexual orientation, or gender identity, among other things.

New Jersey would become the 37th state to pass a ride-sharing law, according to Uber. Following a long-running legal fight, Gov. Wolf in November signed into law legislation that allows ride-hailing firms to operate in Philadelphia.

Garden State lawmakers have debated how to regulate ride-sharing companies for years, as the taxicab and limousine industries have pressed for rules that would treat Uber similarly.

A main sticking point in the negotiations was over driver background checks. The limousine industry, whose drivers are subject to fingerprint tests as part of criminal background checks, argued that drivers for companies such as Uber and Lyft should face the same scrutiny.

Some lawmakers agreed. "Uber's problem is they have worse turnover than McDonald's. So when somebody leaves them, they want to have the next man up immediately," State Sen. Richard Codey (D., Essex) said on the Senate floor last week. "But on a fingerprint check, you have to wait two weeks. They don't want to wait two weeks; it doesn't fit their model."

Codey added that Little League coaches, mortgage brokers, and school-bus drivers must be fingerprinted before they are eligible for those jobs.

That argument didn't win out. Uber had a powerful partner to argue against such checks: Over the summer, at Uber's request, former U.S. Attorney General Eric Holder wrote a letter to New Jersey lawmakers warning that fingerprint-based checks were flawed and could discriminate against minorities.

The legislation now on Christie's desk says the companies can submit their own background-check methods to the state attorney general for review. If the attorney general deemed the process insufficient, applicants would not be able to drive for companies like Uber until they passed a check conducted by the State Police.

Uber spent $160,000 on lobbying last year, according to its most recent disclosure with state regulators, while Lyft spent $45,000.

Assemblyman Troy Singleton (D., Burlington), a bill sponsor, said the state should give companies the green light with regard to background checks if they "have built a better mousetrap."

The bill also says ride-hailing companies would have to maintain insurance both while passengers are in the car and while drivers are commuting to pick up customers.

Uber and Lyft say they already provide for $1.5 million of commercial auto insurance coverage for New Jersey trips, as required under the legislation.

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