LANSING, Mich. — Increasingly popular rideshare services such as Uber and Lyft wanted to ease their expansion into Michigan with legislation that would create statewide regulations as opposed to a patchwork of local rules.
But their late-year lobbying push met with too much resistance from the competing taxi industry and some powerful forces such as the auto insurance lobby. After clearing a committee despite some lawmakers' reservations, the bill died on the House floor Wednesday — left to be reintroduced in the next two-year session.
Uber, which enlists drivers to use their own vehicles to transport passengers, launched its service in the Detroit area in March 2013. It began offering rides in five other cities this year: Grand Rapids, Lansing, Ann Arbor, Flint and Kalamazoo.
Rival Lyft currently operates in metro Detroit and Ann Arbor.
Using the companies' smartphone apps, riders can summon a car, see how far away it is and check out a driver's reviews. There is no need to exchange money, as fees are automatically charged to a rider's credit card.
The rideshare companies have been entering into operating agreements with Michigan's larger cities, but they want a statewide regulatory framework in which they can purchase a state permit if they meet insurance, background check, driving history and vehicle safety requirements. Municipalities could fine drivers for certain violations, but they couldn't regulate the industry through their own ordinances.
Mike White, Uber's general manager in Michigan, said municipalities, customers and drivers are embracing the service.
"They love the opportunity to be able to get a ride within minutes from a safe driver in a safe vehicle. That's provided economic opportunity for drivers around the state as well, who are now able to make additional money part-time, when they have time, servicing a real need in their communities," he said.
Most legislative resistance to ridesharing appears to be less about the service — though California prosecutors recently sued Uber and Lyft over the rigor of their criminal history checks — and more about the finer points: state vs. local control, an old-style monopolistic cab system vs. new-age deregulated competitors, and insurance coverage when there are serious traffic accidents.
Matt Oddy, manager of Detroit's Checker Cab, said the playing field should be level and Michigan already has a law regulating all vehicles for hire.
"We believe that that act is sufficient, it's in place. It may need some tweaking, but we don't see a need to bring in a separate set of legislation to regulate a new entrant to the market," he said.
Under the bill, an Uber driver's personal car insurance would apply anytime the driver's app is turned off. During the trip, Uber's $1 million in commercial coverage would cover a crash.
A criticism of the measure is potential confusion over which policy would kick in when a driver has the app on but isn't on a trip.
The Insurance Institute of Michigan, an insurance trade group, urged lawmakers to delay action until next year. The Coalition Protecting Auto No-Fault, a mix of personal injury lawyers, medical groups and patient advocates, said the same level of insurance should be required regardless of whether a driver is logged into Uber or giving a ride and questioned if $1 million of combined bodily injury and property damage coverage is enough.
But Brad Nail, Uber's public policy insurance manager, said during a recent House hearing that it's ample coverage and the bill recognizes a "consensus approach" that other states are taking.
Rep. Tim Kelly, a first-term Saginaw Township Republican, is expected to again propose ridesharing legislation, which supporters say would help prevent DUIs and give homebound people more transportation options.
"We're putting in place commonsense measures to protect both drivers and riders of this burgeoning industry," he said. "It's a necessary move to allow the industry to flourish."
Rep. Andy Schor, a Lansing Democrat who opposed the bill without some changes, said it would override an Uber deal already done jointly by Lansing and the university town of East Lansing. While many local governments prefer to let the state regulate ridesharing services, he said, some want a say.
"I don't have a problem with it at the very least as a (statewide) benchmark," Schor said. "But if a situation arises in Muskegon or Detroit or Marquette and they want to add a few things in, they should be able to."
House Bill 5951: http://1.usa.gov/1yJGHy7