As the state legislative session ended last month, the Senate and Assembly finally proposed a legal basis for ride-hailing services to operate in the state. On the most crucial question of assuring a level of public security and protection similar to that required of taxi and limousine services, the legislators punted the matter to the attorney general.
The Transportation Network Company Safety and Regulatory Act, which cleared the Legislature on Dec. 19, proposed general requirements of registration and state oversight typical of businesses in New Jersey.
Ride-hailing companies such as Uber and Lyft would have to pay an annual fee of $25,000 to operate in the state.
They’d have to implement a zero-tolerance drug and alcohol policy regarding their drivers (who are considered independent contractors) and ensure that drivers don’t discriminate against potential riders on the basis of the usual aspects of identity or their intended destination.
The companies and/or their drivers would have to boost the insurance on the vehicles used with $1.5 million in liability coverage for accidents with uninsured or underinsured motorists.
Legislative leaders, who said they worked with Uber, Lyft and law-enforcement officials on the regulations, pointed out that the bill would prohibit a ride-hailing driver from soliciting or accepting a rider other than through the company’s digital network. So such drivers couldn’t try to pick up riders at airports and bus stations like a taxi, although the bill doesn’t specify penalties for doing so.
What the legislators didn’t mention, however, was that the bill also prohibits taxi and limo drivers from using their vehicles to provide transportation-network rides. Along with state regulation comes protection from competition for both sides.
When it came to protecting the public, though, legislators caved to pressure from Uber, Lyft and others in not requiring fingerprint background checks for drivers, the accepted and widespread gold standard in reviewing possible criminal history. Identification papers can be counterfeited and identities can be stolen, but fingerprints specify a person and connect to criminal records.
Such fingerprint background checks are required for taxi, limo and bus drivers, and there’s no good reason not to require them of ride-hailing drivers — 20,000 of them already working for Uber and Lyft in New Jersey — especially in light of reports nationally of passengers assaulted by such drivers.
Instead, the Legislature chose to let ride-hailing companies come up with their own method of criminal background check, subject to approval by the state Attorney General’s Office. If the method is disallowed, the checks would be done by the State Police and include fingerprinting of drivers.
Maybe the Attorney General’s Office will stand firm, or maybe it too will bend to the influence of the companies, if not this year then in the future.
New York City insists on fingerprint background checks, and Uber and Lyft provide them. We would like to hear state legislators explain why New Jersey people should get less protection.
The ride-hailing companies don’t like the background checks mainly because of the small cost and inconvenience, but also because they undermine the case that the drivers are cheap-to-use independent contractors and not employees.
But that’s another area where the legislators are abandoning long-standing policies to create exceptions to standard business practices for favored companies. Those tens of thousands of drivers won’t be protected from corporate abuse by basic state laws such as wage and hours requirements.
Will legislators allow home-care providers, for example, to be turned into unprotected “independent contractors” the same way? This issue will come back at legislators sooner than they realize.
The governor should conditionally veto the transportation-network bill, requiring fingerprint background checks instead of leaving them merely a possibility.