Will Potential New Jersey Law Put an End to Rideshare Programs Like Uber?
April 1, 2020
A newly proposed law has generated quite a bit of controversy here in New Jersey. According to myCentralJersey.com, legislation backed by the New Jersey insurance and taxi industries could bring an end to rideshare programs like Uber. The proposed law would enforce strict regulatory requirements that ridesharing services may be unwilling or unable to meet.
As it currently stands, about 7,500 people in New Jersey are making a living or supplementing their income as Uber drivers. The demand for more Uber drivers has risen dramatically in the past few years, fueled in part by the convenience and cost-saving benefits customers routinely receive. If the new law goes into effect, it could drive Uber out of the state, leaving thousands of people without the extra work and many more without this affordable alternative transportation option.
What Does the Bill Propose?
The synopsis of the bill states it is intended to establish “insurance and safety requirements for companies that use digital network or software application to match passengers with drivers.” Once enacted, the bill would require transportation network companies (TNCs) like Uber, Lyft and Sidecar to:
- Obtain a permit, issued by the New Jersey Motor Vehicle Commission, to legally operate within the state.
- Provide coverage of no less than $250,000 per incident for liability, property damage and uninsured and underinsured motorist coverage, as well as medical coverage for no less than $10,000 per person per incident.
- Have commercial insurance coverage go into effect from the moment the driver turned on the app, not once a ride request is accepted, as is the current process.
- Require drivers undergo routine vehicle inspections at least once every other year.
- Require driver applicants submit to state police criminal background checks and drug testing.
- Require all drivers display a commercial driver insignia.
- Verify each driver has a valid license, registration and insurance coverage.
- Conduct periodic checks into drivers’ records so the company can prohibit drivers from providing transportation to passengers if the check uncovers instances of reckless driving behavior, drunk driving, driving with a suspended license, or other violations.
- Conduct periodic checks into drivers’ criminal history records so as to prohibit drivers from providing transportation to passengers if the check uncovers a criminal conviction for assault, rape, burglary, kidnapping, robbery, sexual assault or endangering the welfare of a child.
- Pay the state a fee of 10-cents per passenger transaction.
Opposition Uber Is Facing
Taxi and limousine drivers in New Jersey are aggressively fighting to get the same regulatory restrictions that apply to their industries imposed on TCNs. Forbes is reporting that Uber has been facing resistance in others area as well:
- Germany has temporarily banned Uber and stated its drivers would face fines of as much as $323,700 per trip.
- Hundreds of taxi drivers in Spain opted to strike in protest of unregulated TCNs.
- In India, three of Uber’s competitors have made claims that Uber is “violating foreign-exchange laws.”
- If government of Sao Paulo, Brazil chooses to push for the suspension of all Uber services, further legal problems may ensue for the TCN.
- Uber has also faced cease-and-desist orders in numerous cities throughout the United States, with some local governments being pressured to block Uber operations altogether.
While Uber may face even greater resistance in its future, the Forbes article also notes that companies like Uber, Pandora, iTunes, Airbnb and Craigslist are making dramatic changes to the way we, as a society, are able to receive goods and services. The question is, should these companies be regulated by the same rules and restrictions as past companies, or do the times necessitate a change?
How the Public Views Uber and Other Digital Mobile Businesses
When a recent poll from New Jersey 101.5 asked viewers whether they agreed with actions by NJ lawmakers to require Uber and other digital mobile businesses adhere to insurance and safety requirements, more than 50 percent of those surveyed stated lawmakers should leave these businesses alone. Another 13 percent said Uber, Lyft and other TCNs should be allowed to continue operating, as long as legislation governing their actions was in place. Approximately 28 percent believe ridesharing, digital mobile services of this type should be discontinued.
Uber has also made a few recent changes, which Engadget reports were done in the hopes of making riders feel safer and eliciting higher approval for its services. New initiatives, a driver “code of conduct” and Incident Response Teams who will be available 24 hours a day, 7 days a week, will hopefully address some of the bad publicity the company faced last year.
Widespread Impact If New Legislation Goes Into Effect
As the Law Offices of Anthony J. Vecchio are based here in New Jersey, and our primary practice area is DWI law, we are well aware of the widespread impact this new legislation could have should it go into effect. Each day, we fight to defend those accused of driving under the influence. If regulatory restrictions are put in place, it could cause existing and future Uber drivers to unfairly lose their sole income-earning activity. On the other side, those with DWI convictions on their records could lose Uber and other TCNs as their main source of transportation to and from work.
Either way, safety for drivers and passengers must remain the primary concern. As long as the two sides can come to an amicable agreement, this does not have to signify the end to rideshare programs such as Uber.
- myCentralJersey: Will legislation put the brakes on New Jersey’s Uber drivers?
- NJ Spotlight: Uber Tries to Steer Clear of New Rules and Regulations in Garden State
- New Jersey Legislature: Assembly Bill A-3765
- New Jersey 101.5: Should Uber continue in New Jersey? – Poll
- Forbes: Uber vs. the Law (My Money’s on Uber)
- Engadget: Uber hopes new programs will help riders feel safer
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.