February 26, 2016

What’s next for Uber and Lyft

Legislation that provides an outline for regulations of ride-hailing companies like Uber and Lyft is awaiting action by Gov. Susana Martinez—but there is still a possible lengthy process before the rules are in place.

Lyft ride sharing

Photo Credit: Spiros Vathis cc

After rules imposed last year by the Public Regulation Commission in the absence of legislation, Lyft halted operations in the state and Uber has been operating, some say, illegally. A pending New Mexico Supreme Court case and possible signature by the governor adds some ambiguity to the future of Uber in New Mexico and whether Lyft will resume operations in the state.

If signed into law, companies like Uber and Lyft would be regulated separately from taxi companies by the PRC.

Martinez’s signature needed

The entire process depends on Martinez signing the legislation, which seems promising given her reaction after the session to the legislation on ride-hailing (which she calls ride-sharing) companies.

“We passed a law that welcomes ride-sharing companies to New Mexico and a law that prevents those injured  while drunk or high on the job from collecting workers comp benefits,” Martinez said during a post-session news conference. “These are all good job measures.”

Gov. Susana Martinez at her post-session press conference in 2016.

Gov. Susana Martinez at her post-session press conference in 2016.

Martinez staffers did not respond to inquiries about whether she plans to sign the measure or not.

Lyft praised the passed legislation and encouraged Martinez to sign the bill.

A statement sent to NM Political Report read, “The ridesharing rules passed by the state legislature encourage innovation, prioritize public safety and expand consumer choice across New Mexico.”

Lyft spokeswoman Chelsea Wilson would not say if  the company plans on resuming operations in New Mexico, but did say “the framework does create a regulatory environment that would allow Lyft to operate and thrive.”

Last year Lyft and Uber resumed operations in San Antonio, Texas after both companies stopped services due to city mandated background checks. Operations resumed when the two companies made separate deals to join a pilot program where drivers voluntarily participate in fingerprint-based background checks.

This was the second attempt by  Rep. Monica Youngblood, R-Albuquerque, to pass legislation to address Transportation Network Companies, or TNCs.

TNCs are companies that use a digital network or app to connect riders with drivers from the respective organization.

PRC actions

Even if Martinez signs the bill into law, the public agency tasked with regulating TNCs will have their work cut out for them, according to conversations with commissioners and staff. The PRC will need to take the potential new law and run it through their rulemaking process. PRC staff will have to come up with and suggest rules that comply with the legislation. The commission will also need to provide a 30 day notice for any public input on the rules.

Uber app, Albuquerque

Uber app, Albuquerque

Avelino Gutierrez with the legal division of the PRC told NM Political Report that the rulemaking process hinges on some of those terms.

“There are certain things that have to be worked out time frame-wise in order to comport with those requirements,” he said.

If Martinez signs the bill it would go into law on May 18.

Uber and Lyft battled with New Mexico officials for the ability to operate in the state without having to fully comply with the state’s Motor Carrier Act for years. The law covers services like ambulances, tow trucks, taxi companies and shuttle services. In 2014, the PRC issued a cease and desist order to both companies, saying they were not complying with state laws.

The PRC added language to existing law that allowed ridesharing to continue, but not without some disagreement. Lyft stopped operations in the state while Uber took the issue to court. New Mexico taxi companies joined in court proceedings, saying the regulations on TNCs were not enough and put taxi companies at a disadvantage.

There is still a pending court case to determine the fate of the current rules. Arguments before the New Mexico Supreme Court on the matter are scheduled for March 10, the day after the deadline for Martinez to decide whether or not to sign legislation.

Opposition to TNCs’ treatment

The new proposed regulations don’t sit well with one PRC commissioner. Valerie Espinoza said even if signed, the new law would be lacking and “leaves a bad taste” in her mouth. She has long held that Uber and Lyft should be held to the same standards as taxi companies. Espinoza has also criticized Lyft in the past for leaving the state after the rules were not ideal for the company. She is now more than ever critical of a rule that, she said, caters to ride sharing companies.

“I’m going to scrutinize the rulemaking process,” Espinoza told NM Political Report.

Espinoza has historically been the only commissioner against separate regulation for TNCs and once called herself a “lone wolf” when it comes to her voting record on the commission. Even so, the commission will be held to some guidelines  when adopting rules for the new TNC act.

“It’s certainly not carte blanche to enact any regulation that we so desire,” Gutierrez said of coming up with new rules. “As to whether we have some leeway or not we’d have to take a look at the subject matter.”