Maryland’s state body that oversees utilities and transportation in the state ruled Wednesday that a popular Web-based ridesharing service is subject to state regulation.
The Public Service Commission ruled that Uber Technologies Inc. is a common carrier — a company that moves people or goods for hire — and as a result, is subject to the same regulations as all other passenger-for-hire services.
Uber is a ridesharing company that connects drivers with passengers using a smartphone application.
The ruling is in response to an appeal Uber filed with the Public Service Commission after Chief Public Utility Law Judge Terry Romaine ordered the company to apply for a motor carrier permit. Uber, which has been operating in Maryland since January 2013, appealed Romaine’s order, arguing that it should not be subject to regulation under the PSC because of its status as a technology company, and because it simply arranges rides between freelance drivers and passengers and does not directly operate a fleet of cars.
Uber also argued that it is exempt from regulation under the PSC under the Telecommunications Act of 1996.
But the Public Service Commission determined that although Uber does not own the vehicles it dispatches, it uses a Web-based application to facilitate ride sharing, collect fares and exchange information between drivers and passengers, and “is engaged in the public transportations of persons for hire.”
“Thus, Uber is a common carrier and a public service company over whom the Commission has jurisdiction,” the commission wrote in the order.
The order requires Uber to apply for a motor carrier permit within 60 days, and calls for the commission staff to begin drafting new guidelines to regulate the company’s practices.
In a written statement, Uber spokesman Taylor Bennett said the Public Service Commission “is stuck in the days of the horse and buggy.”
“The PSC’s attempt to take choice and competition away from Maryland residents will not stand,” the statement read.
Bennett said Uber plans to appeal the ruling, adding that the order is “unprecedented,” and that Maryland is the first state to categorize Uber as a common carrier.
Some states have embraced alternative ride-sharing companies, lauding Lyft and Uber as innovators, while others have struggled to regulate companies they believe are operating illegally, without proper rules or regulations.
Colorado Gov. John Hickenlooper in June signed into law a bill that allows UberX and Lyft to operate in the state despite initial complaints from the state’s Public Utilities Commission.
And on Wednesday, Virginia Gov. Terry McAuliffe announced a temporary agreement that will allow Uber and Lyft to continue service, provided the companies adhere to a set of conditions that include requiring drivers to undergo background checks, and applying for transportation broker’s licenses. The announcement comes on the heels of the state officials issuing cease and desist letters to both Lyft and Uber for violating state licensing laws.
Other states are trying to determine how to regulate the companies. Washington’s Taxicab Commission introduced proposed rules that would impose insurance requirements on drivers, as well as limit the length of their work day. In May, the New Mexico Public Regulation Commission ordered Lyft to cease all operations in Albuquerque.
Last month, more than 30 Maryland cab companies sued Uber in Baltimore Circuit Court, alleging antitrust violations.
In response to Wednesday’s order, Maryland Gov. Martin O’Malley said in a statement that “we shouldn’t try to limit a 21st century marketplace with 20th century regulations.”
“I urge the Commission — and the Maryland General Assembly — to ensure that our laws and regulations accommodate and foster new innovations.”
The order only applies to Uber Black and Uber SUV. UberX, a program that connects passengers seeking rides with drivers operating their personal vehicles, is exempt, as is Lyft, a ride sharing company that functions in a similar capacity. But those outfits are not immune to scrutiny.
On Tuesday, the People’s Counsel, an independent consumer watchdog, asked the Public Service Commission to investigate the licensing practices of UberX and Lyft. In the request, People’s Counsel Paula Carmody raised concern about UberX and Lyft failing to require the drivers who participate in the ridesharing programs to obtain a special license necessary under Maryland law to pick up passengers.
Public Service Commissioner Anne Hoskins said in a statement that the regulations the commission comes up with “must adapt with changing technologies and not inhibit the evolution of technology and service offerings.”
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