Rideshare Companies Regulated in Colorado

Colorado recently became the first state to address the legal and business concerns of the fairly young ridesharing industry. Ridesharing is a recently popularized concept that resembles carpooling and allows individuals searching for transportation to connect with drivers who will pick them up and take them to their destination for a fee.

Unlike carpooling, where the rider and driver typically take turns and share expenses, rideshare companies give the driver the ability to earn money, and in most cases the driver and rider do not know each other. Drivers associated with rideshare companies use their own personal vehicles and charge fares typically less than what it would cost to hire a taxi or limousine.

A bill titled the Transportation Network Company Act was signed by Governor John Hickenlooper that now allows rideshare companies such as UberX and Lyft (brokerages that operate via a smartphone app) to operate as authorized businesses.

Part of the bill mandates that these businesses are now under the oversight of Colorado’s Public Utility Commission (PUC). Each rideshare company must now obtain a permit from the PUC and will be required to maintain liability insurance policies with minimum coverage levels of at least $1 million dollars.

Concerns for the PUC

While Colorado is once again at work promoting business opportunities, it is also concerned with promoting consumer protection and public safety. The PUC has been charged with the regulation of the ridesharing industry and faces some topics of interest in coming months and years:

• Pushback from the taxi and limo industry: Taxi and limo services see the ridesharing companies as direct competition, especially with their ability to charge lower fares. Taxi fares are regulated and drivers are subject to Federal and state bureau fingerprint background checks. These are requirement that are not currently extended to rideshare drivers whose background checks are limited to publicly available data, reports the Denver Post.
• Vehicle inspections: Hickenlooper has recommended that the PUC evaluate a possible inspection requirement for rideshare vehicles, according to media reports. Although drivers use their own personal vehicles, an inspection process may help protect consumers and advance public safety. Taxis and limos are currently required to submit to inspection regulations under current legislation.
• Loosening the burden on the competition: Hickenlooper has also charged the PUC with reviewing the regulatory burden currently placed on limo and taxi services in an effort to stimulate competition and allow these companies to remain viable against the new rideshare services.

Concerns for Riders

While ridesharing appears to be an inexpensive and benign option for commuters and other travelers, there are still some safety concerns in light of this new legislation:

• Is my driver properly insured? With this brand new legislation in place, are you now properly covered in the event of an accident? Time will tell whether the PUC is properly tracking rideshare companies and obtaining updated insurance information.
• Is this vehicle safe? Without the same inspection requirements in the taxi and limo industry, it is possible that you could be picked up in a substandard vehicle.
• Who is liable if I’m injured in an accident? Is the driver liable, or is the rideshare company liable if you sustain injuries in an accident? Ask your rideshare company for clarification before accepting a ride.

Call the Law Office of D.J. Banovitz

The Law Office of D.J. Banovitz specializes in helping people who have suffered injuries in an auto accident. If you need legal help after an accident involving a rideshare company, call 303-300-5060 or contact us online to schedule a free consultation.