Ohio has officially become the 28th state to pass legislation regulating transportation network companies like Uber and Lyft, as Gov. John Kasich signed H.B. 237 into law Dec. 23.

The law establishes the state’s Public Utilities Commission as the statewide regulator of ridesharing services and requires companies to obtain a $5,000 permit to match drivers with potential passengers via smartphone applications. Any limousine and taxicab companies that employ digital apps likewise would be eligible for the same regulatory treatment, although local rules would continue to apply where cars are hailed on the street or ordered via telephone.

During the so-called “Period 1,” when a driver is logged in to a TNC app but not yet matched with a passenger, the law sets minimum bodily injury coverage requirements of $50,000 per person and $100,000 per accident, and a minimum requirement of $25,000 for physical damage liability. From the moment a match has been made until the fare is dropped off at his or her destination, the minimum is $1 million of liability coverage. Coverage must be provided by an insurer rated at least A- by A.M. Best Co. or A by Demotech, and can be obtained either by the driver, by the company or some combination of the two.

The law also requires drivers to submit to criminal, sex-offender and driving history background checks. Drivers are not to be considered employees or agents of TNCs, except where explicitly agreed to by contract.

State capital Columbus performed poorly in R Street’s Ridescore 2015 report, released earlier this month. It received a D grade in TNC friendliness and a C+ overall. Cleveland received an A in TNC friendliness and an overall grade of B.

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