State studies TNC regulations in rapidly growing Lyft and Uber market

Over the past five years, on-demand ride-hailing companies such as Lyft and Uber (often called transportation network companies or TNCs) have transformed the mobility landscape in Washington and around the world. These services have significantly increased access to mobility, enhanced convenience and time savings, and reduced transportation costs for individuals. Alongside these benefits, however, they have raised concerns around accessibility, equity, traffic, congestion, and safety. Moreover, they have raised new questions for states and municipalities regarding revenues, regulations, and responsible planning.

In 2018, the Washington State Legislature directed the Joint Transportation Committee (JTC) to conduct a study of state and local regulations that govern TNCs. Currently, state regulation is limited to requirements that drivers hold a valid state driver’s license and liability insurance for personal vehicles used for TNC rides. Local governments play a more active role in regulating TNCs and their drivers, and many want to maintain this role.

The emergence of TNCs would not be so marked if not for the pace of their growth. The Seattle Times reported that the number of daily Uber and Lyft trips in Seattle increased from 27,250 in 2015 to 91,250 in 2018. BERK produced two reports for this study:

  • A Policy Guide that summarizes regulations in all states and D.C., as well as select markets outside the U.S.

  • A Summary Report that examined key questions facing the Legislature: What is the state’s interest in regulating TNCs? Are certain regulations more appropriate at the local level than the state level?

Experience nationally and globally has shown that some degree of regulation should exist under one umbrella, primarily to ensure consistency and in some cases fairness with the incumbent taxi industry. The state is often in a position to provide a “floor” in this regard. Research by Bruce Schaller found that large cities and locations with significant taxi markets are best served by local regulations reflecting a deep understanding of local market dynamics and local agencies with capacity to implement and enforce the regulations efficiently.

Over the course of our study, a coalition of industry, local jurisdictions, and others met in an effort to pass consensus legislation that, at a minimum, establishes statewide standards for insurance, vehicle safety, driver licensing requirements, and fare transparency. At the end of the 2019 legislative session, the status quo remains, and it appears that Seattle may introduce new TNC legislation.