Kentucky state regulators are preparing emergency regulations that will go into effect next month to govern ridesharing companies like Uber and Lyft as they expand their services into Kentucky cities.
The companies offer a smartphone application to match paying customers who need a ride with someone who is willing to give them one. The companies are operating in Louisville, Lexington and Cincinnati, which sits on Kentucky’s northern border.
Taxi companies have complained the ridesharing services have an unfair advantage because they are not regulated and are not required to have the same safety inspections and background checks as taxis. Some Louisville council members said last month they thought the companies were operating illegally.
Tuesday, Department of Vehicle Regulation Commissioner Rodney Kuhl told state lawmakers the agency would submit emergency regulations next month that would regulate the companies the same as taxi companies. The regulations would go into effect immediately but would be reviewed by legislators.
State Sen. Ernie Harris, R-Prospect and chairman of the interim joint committee on transportation, said the state would use emergency regulations “to allow this to continue.”
“Those of you in the Louisville area have heard some of council members say, `Well this isn’t right we’re going to stop this immediately,”‘ Harris said. “Let’s simmer down, back off and let’s reasonably look through this.”
A spokesman for the Louisville Metro Council Democratic Caucus said the council has “nothing on the horizon” concerning regulating or banning the ridesharing companies.
Both companies said they have extensive safety inspections for cars and background checks for drivers, noting the companies check driving records for the past seven years while state law requires a background check going back five years.
“We welcome regulation. We just hope that the regulation actually acknowledges this unique model: Personal drivers, personal cars,” said Annabel Chang, a national public policy manager for Lyft.
The company officials told lawmakers they do not own vehicles and they do not employ drivers.
“We’ve created a marketplace for …. citizens who may have a few extra hours on their hands and can use their own vehicles to earn extra money to pay their bills,” said James Ondrey, Uber’s general manager for the Kentucky and Ohio region.
Steve Colston, president of Procarent that operates Yellow Cab Kentucky in Louisville and Lexington, called the emergency regulations a “good first step.” He said there is a difference between saying you have extensive background checks and being required to have them by law.
“The fact that these companies are operating illegally and that seems to be OK is a little concerning to me,” he said.
The emergency regulations will not require the companies to change their insurance. A spokeswoman for the state Department of Insurance told lawmakers there is no need to change state insurance regulations because the companies are already complying with state law.
But lawmakers questioned if the companies should be required to pay workers compensation and unemployment insurance. Harris said lawmakers would discuss those issues at another meeting.
Republican state Sen. Whitney Westerfield said he used Uber on a recent trip to New York City.
“I had a wonderful experience,” he said. “I think it’s great there is some disruption among an existing industry.”
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