MADISON, Wisconsin — Online ride-sharing companies would have to apply for state licenses, require criminal background checks on drivers and insure their operations under a bill that Wisconsin legislators introduced Monday.
The newly emerging companies, such as well-known Uber and Lyft, compete with traditional taxi and limo outfits by allowing customers to request rides from contract drivers through smartphone apps. Government officials nationwide have been struggling to play regulatory catch-up with the companies.
The Wisconsin bill's chief author, Rep. Tyler August, R-Lake Geneva, said the measure would eliminate a patchwork of local ordinances and help facilitate transportation in under-served areas.
Under the measure, the companies would have to obtain a $5,000 license from the state. The companies or a third party would have to conduct a criminal background check on driver applicants.
Anyone convicted of moving violations, sex offenses or a number of other serious crimes would be barred from driving. The companies, the drivers or some combination thereof also would have to maintain at least $1 million in liability insurance. Local governments would be prohibited from imposing their own ordinances on the the industry.
Uber media officials didn't immediately respond to an email seeking comment. Lyft spokeswoman Chelsea Wilson called the legislation a "common-sense regulatory framework."
Paul Bittorf, a member of the Wisconsin Association of Taxicab Owners and business manager of Union Cab, the largest cab company in Madison, said the bill is far too lax. The new companies should be subject to the same requirements as taxis, with permits for individual drivers, background checks by law enforcement and vehicle inspections. He also questioned how the state could possibly verify the ride-share companies actually follow the law.
"The time you're going to find out (if the companies aren't operating legally) is when something goes horribly wrong," he said.
Last year a judge ordered Uber's temporary suspension in Spain, saying it represents unfair competition. The Indian city of New Delhi banned Uber after one of its drivers was accused of rape. A Dutch court ruled that Uber violated current taxi laws and the company must stop working with drivers who charge fares without taxi licenses.
In the U.S., an Uber driver in Massachusetts was accused last year of sexually assaulting a woman in the back seat. And in December the company announced it would suspend operations in Portland, Oregon, for three months while that city updates its regulations for private for-hire transportation. The city sued Uber three days after it launched, saying the company violated rides-for-hire regulations.
Here in Wisconsin, city attorneys in Madison have filed 42 charges against Uber in December alleging the company was operating without a license, failed to apply for a license and hadn't paid license fees. Earlier this month the Green Bay City Council unanimously passed a resolution ordering Uber to stop all its services while it ponders new regulations.
Milwaukee has passed an ordinance requiring Uber and Lyft drivers to follow the same licensing and background investigation requirements as other taxi drivers. Milwaukee City Council President Michael Murphy said the bill strips local governments of their regulatory powers and tilts the playing field toward ride-share companies.
"The inconsistency is unbelievable," Murphy said. "Has anyone heard of consumer protection?"
Colorado passed similar legislation last summer to become the first state to regulate Internet ride-sharing companies.
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