What To Do About Uber: Michigan Patch Poll

Local ordinances in Lansing and East Lansing regulate rideshare services, which are popular among Michigan State University students. (Photo via Uber Facebook page)

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A classic David vs. Goliath battle is shaping up in Michigan as efforts to regulate rideshare companies like Uber and Lyft have resurfaced in the state Legislature.

Uber and its rival Lyft enlist drivers who own their own vehicles to provide transportation service, which customers order using a smartphone application. There’s no exchange of money, as the app handles the financial transaction.

Uber has been operating in the Detroit metro area since 2013, and has since expanded to Lansing, Ann Arbor, Flint, Grand Rapids and Kalamazoo. Lyft operates in metro Detroit and Ann Arbor.

As they increase their presence in Michigan, the upstart companies prefer one regulatory law, but face stiff opposition from the monopolistic taxi system and insurance industry. Regulatory efforts failed last year, but Rep. Tim Kelly, R-Saginaw, has revived the effort with House Bill 4032.

It would require rideshare companies to register with the Department of State and mandate vehicle inspections, insurance coverage and criminal background checks for drivers. The bill has been referred to the House’s Committee on Communications and Technology.

“What we would attempt to do with our legislation is bring them into some type of regulation so that they’re operating with some type of state licensing,” Kelly told The Kalamazoo Gazette/MLive.com.

“And, quite frankly, they’re already operating in your town or your city and they’re not going to stop, to be honest,” he said. “So, I’d rather have them in the tent under some form of regulation than out of the tent.”

Tell Us:

• As rideshare companies like Uber and Lyft expand into Michigan, should they be subject to the same regulations as taxi companies? Take the poll and add to the discussion in the comments.

Kelly’s proposal doesn’t define rideshare services the same as taxi and limousine services are defined.

Matt Oddy, manager of Detroit’s Checker Cab, told The Detroit News last year that he thinks Uber and Lyft should face the same regulatory hurdles taxi companies do under already existing laws.

“We believe that that act is sufficient, it’s in place,” Oddy said. “It may need some tweaking, but we don’t see a need to bring in a separate set of legislation to regulate a new entrant to the market.”

The Insurance Institute of Michigan industry trade group also cited potential confusion over whose insurance – the rideshare company’s or the driver’s – would be in effect if the driver had the smartphone app turned on, but wasn’t on a trip.

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Reception to Uber has been mixed, said Mike White, the company’s general manager in Michigan.

Without an overarching state law, a patchwork of local laws are in place in Detroit, East Lansing and Lansing. In Ann Arbor, city officials initially tried to stop the rideshare companies with cease and desist letters to Uber and Lyft last April. The companies reportedly ignored the letters and the city directed the city manager to negotiate agreements with Uber and Lyft last September.

Customers and drivers love the service, White said.

“They love the opportunity to be able to get a ride within minutes from a safe driver in a safe vehicle,” he said. “That’s provided economic opportunity for drivers around the state as well, who are now able to make additional money part-time, when they have time, servicing a real need in their communities.”