Uber Ready to be First App-Based Firm to Apply for Montana License

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Hailing a ride through a smartphone app is closer to becoming a reality in Montana.

The Public Service Commission voted unanimously this week to approve rules regarding a new class of license for firms that use apps to connect passengers with drivers who use their personal cars. The five-member PSC regulates utility companies in the state, oversees the taxi industry and now app-based rideshare companies.

A new law passed by the 2015 Legislature and signed by Gov. Steve Bullock allows the app-based firms to potentially set up shop by taking away the ability of taxi and limousine operators to block new competitors.

Commissioner Travis Kavulla called the previous “competitor veto” outdated on Tuesday and said the new law refocuses the PSC to issues of public safety, consumer protection and consumer choice.

Some taxi drivers have cried foul, however, saying their prices are regulated by the PSC while the new companies’ prices will not be.

Kavulla said taxi operators can file for the new license if they start using an app to book rides and that it’s a matter of rate transparency. Taxi rates are transparent because operators tell the PSC what they will charge while Uber rates are transparent because people can see them on the app before booking a ride, he said.

“It’s transparency that we’re really looking to protect, not heavy-handed regulated rate structures,” he said.

Commissioner Kirk Bushman said the new license creates an uneven playing field and the commission and possibly lawmakers will need to address it in the future.

Uber last week became the first firm to apply for the new license, indicating on their application they want to operate statewide. Their application comes as no surprise as Uber hired a lobbyist during the legislative session to help usher the related bill through.

All applicants must pay a fee and show they have insurance at a much higher level than required by taxis, among other rules. Uber’s application will be posted publically Aug. 25 for a “20-day protest period” after which the commission will approve or deny the application.

Commissioner Roger Koopman said he’d prefer that state government step away from regulating this industry entirely.

“The marketplace will respond to needs and demands of customers,” Koopman said. “Over time let them compete. I think everyone in the long run, in both the industry and the consumer, will benefit.”