Tinkering with Maryland's Uber Regulations
Two months ago, the Maryland General Assembly passed the state’s first regulations of so-called transportation network companies, or TNCs, the most popular of which is Uber Technologies. I laid out the details of the law in a previous blog post, but put simply, the state has insurance, inspection, and licensing requirements similar to those companies like Uber and Lyft already had in place. A less prominent aspect of the law allows localities that regulate taxis to add a 25 cent surcharge on all TNC rides originating in their district, with revenues going toward local transportation projects.
Most assumed this would be the end, for now, of the TNC debate in Maryland. But that would not be the case. Bryan Spears at the Daily Record reported yesterday that the Comptroller’s office has noticed a number of complexities that make implementing the 25 cent surcharge a problem.
The issues arise because some counties regulate taxi service, but within a few of them, cities independently regulate taxis. Elsewhere, some municipalities, like Ocean City, regulate taxis while the counties do not. The question is, whose tax takes precedence? Who gets to keep the TNC surcharge revenues?
It is likely that the legislature will need to revisit the bill to address that issue. Yet they are unlikely to stick to the tax technicalities. Some TNC opponents will seek to add onerous regulations, increasing the cost and reducing convenience for both TNC passengers and drivers.
What might come up? One hot topic will be wheelchair accessibility mandates. Wheelchair access is a common objection to TNC companies. Unlike many taxicab companies, TNC providers like Uber and Lyft do not own vehicles; rather, the cars are owned by the independent drivers who use the TNC platforms to connect with customers. This means any mandate of a particular percentage of wheelchair-accessible TNC vehicles—the normal way wheelchair access is mandated for cabs—would be unwieldy for the TNC industry to manage.
Ideally for-hire vehicles should be deregulated and have all excise taxes on providing rides removed, instead just paying gas and other vehicle taxes like the typical motorist. This would apply across the board, to TNC, taxicab, and limousine services. And, like other services, they should pay the state sales tax.
Yet as much as I’d love to see open competition in the market for giving rides to strangers, Maryland policymakers seem intent on old-school command-and-control regulation. A lesser step would be to remove the 25 cent excise on TNC companies, or, if that’s not possible, ensure cities and counties may not both tax the services. Removing recursive regulations would also be valuable— namely the inspection, background check, and insurance rules that Uber and Lyft already require of drivers who use their communications service.
Overall, the best case for those of us who believe in good governance would be for Maryland lawmakers to adopt a narrow reform that sticks to the technical fixes. A more expansive and complex bill would be a bad sign. My previous post noted that a provision in the past bill allowed for future, more stringent regulation. We can only hope that this premonition will not come true.