Conferees agree to legalize ridesharing in Massachusetts

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In a marathon negotiating session that wrapped up at the literal 11th hour, Massachusetts lawmakers have reached agreement on legislation that would formally legalize transportation network companies in the Bay State, including allowing them to pick and drop off passengers at Logan International Airport and the Boston Convention and Exhibition Center.

The deal struck by conferees, reached at 11 p.m. on the final day for formal sessions, still must be approved individually by the full House and Senate and signed by Gov. Charlie Baker, who has made the ridesharing issue a priority item of his administration.

The final bill mostly tracks with a version approved in late June by the state Senate. It would place TNCs like Uber and Lyft under the regulation of the commonwealth’s Department of Public Utilities, which would conduct criminal background checks of new drivers who already have been screened by the TNCs. As originally formulated, the bill also would have required fingerprint background checks, but that language was dropped from versions later passed by the two chambers.

Drivers would be required to have at least $1 million of liability insurance coverage from the moment they connect with a fare until the ride ultimately is complete. Any time a driver is logged in to a TNC app but not actively engaged in a ride, the insurance requirements are $50,000 per person and $100,000 per accident for bodily injury, $30,000 for property damage and the general state limits for uninsured motorist coverage and personal injury protection.

Perhaps most controversially, the measure will impose a 20-cent surcharge on each ride. Half of those fees will go to the municipalities where the rides originate and another quarter will go to the Massachusetts Department of Transportation. The transportation and municipal surcharges will expire after 10 years.

The remaining five-cent surcharge, which is set to expire after five years, will be dedicated to MassDevelopment, the commonwealth’s economic development and finance agency. Those funds will be used to finance technology improvements for the taxi and livery industries and for workforce development for drivers.

Obviously, forcing an innovative new industry to subsidize the incumbent monopoly cartels that previously were trying to shut out any upstart competition is far from ideal. Nonetheless, the bill marks a significant step forward for ridesharing in one of the largest states that had yet to legalize the practice.

One hopes it also portends well for other fights throughout the Northeast, the region of the country that has been slowest to accommodate these new services. My colleague Ben Carnes wrote recently in the Philadelphia Inquirer about the temporary accommodations reached with Uber in Pennsylvania. Meanwhile, legislative efforts to legalize ridesharing in New York – or, at least, the parts outside of New York City – has moved through that state’s Senate. In neighboring New Jersey, similar legislation continues to be held up by the debate over whether to require fingerprint background checks.

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