Transportation network companies like Uber and Lyft would be legally sanctioned to operate in Massachusetts, governed by a set of mostly reasonable regulations, under legislation approved this week in a 34-2 vote of the state Senate.

The measure would place TNCs under the regulation of the commonwealth’s Department of Public Utilities and requires drivers 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.

On the down side, the bill also imposes a 10 cent per-ride assessment, which Senate Minority Leader Bruce Tarr, R-Gloucester, rightly slammed as an “innovation tax.” The revenues will be dedicated to a statewide trust fund and then distributed to municipalities proportionally, based on how many rides originate in each. The cities and towns are guaranteed the funds for five years, and can use them for any transportation-related spending, including offering subsidies to owners of taxi medallions.

Drivers will be required to submit to background checks dictated by the state, rather than relying solely on the companies’ own screening processes. However, the final Senate bill – unlike problematic bills that have passed recently in places like Austin, Texas – will not require fingerprint-based checks. An effort by Sen. Linda Dorcena Forry, D-Boston, to impose a fingerprint check failed to advance.

The Boston Herald reported that some lawmakers were convinced that requiring fingerprint-based checks would be unwise after receiving a letter on the subject from former U.S. Attorney General Eric Holder:

‘Requiring fingerprint-based background checks for non-law enforcement purposes can have a discriminatory impact on communities of color,’ Holder said in a letter obtained by the Herald. ‘Its records often do not indicate whether a person who was arrested was even charged or ultimately convicted. Because of these issues with law enforcement databases, a fingerprint-based check can prevent people from getting a job even if they were never found guilty of a crime.’

Unlike the measure passed earlier by the Massachusetts House of Representatives, the Senate bill would allow ridesharing drivers to pick up and drop off passengers at the Boston Convention & Exhibition Center and at Boston’s Logan International Airport.

The final version also drops a requirement included in earlier versions of the legislation that would have required TNCs to provide a means for customers to tip drivers through a company’s app. Sen. William Brownsberger, D-Belmont, who led the move to strike that provision from the final bill, explained why in an op-ed that ran in several state newspapers:

As a former restaurant worker, I personally tip well in restaurants and barber shops. But the real consequence of allowing tips is that drivers will get paid less per ride by the TNCs, just as restaurant workers get low hourly wages. The market for drivers is competitive. If drivers want to work for a company that builds tipping into its system, they can do so (Lyft does allow tips). If drivers feel they can make more money with less interpersonal hassle at a company that doesn’t encourage tips, they should be able to do that.

Both chambers’ bills now move to a conference committee to reconcile their differences, and a final version will have to be passed by both the House and Senate before it moves to Gov. Charlie Baker’s desk.

Featured Publications