Gov. Pat McCrory signed a bill Friday in Charlotte that regulates ride-hailing services such as Uber and Lyft for the first time in North Carolina.
Uber, Lyft and other companies that let riders hail a car with a swipe of their smart phones applauded the measure, which they said will let innovation thrive. But the taxi industry has staunchly opposed the bill, which they say lets Uber and similar companies off with lighter regulations and creates an unfair playing field.
The new law, passed last month by the legislature, requires drivers for ride-hailing apps to carry insurance during and between rides. The companies must pay a $5,000 annual state permit fee, and conduct local and national criminal background checks on the drivers, who use their personal cars to give people rides.
“That’s what we’re requiring, is to continue the safety we have for riders,” said McCrory, speaking at the Charlotte Chamber before signing the bill. “This is all about people’s independence and flexibility ... The more choice, the better. The consumer wins.”
One reason Uber hailed the regulations: The company helped write them, and they are based largely on Uber’s business model. The bill would “basically codify Uber’s way of doing business,” legislative researcher Greg Roney told a Senate committee in June.
Charlotte halted its own effort to impose local regulations on Uber, Lyft and other similar companies last year, after it became clear the legislature’s pending statewide regulations would preempt local regulations.
Cab companies have long complained in Charlotte that they’re regulated more strictly – with city-mandated background checks for drivers that include fingerprinting, car inspections, and individual driver licensing fees – than the ride-hailing companies, and thus have higher costs.
Uber has grown rapidly worldwide, quickly becoming the largest and most prominent ride-hailing company. Though it’s a private company, Uber’s valuation would give it a higher market capitalization than any U.S. airline.
In North Carolina, the company said in July that it plans to add 5,000 more drivers on top of the 8,000 it already has in the state.
“It’s a great day for riders and drivers in North Carolina. We thank Gov. McCrory and all parties involved for officially welcoming choice, innovation and opportunity across the state,” said Arathi Mehrotra, Uber’s general manager for North Carolina.
McCrory said Uber offers a good opportunity for people to earn part-time income supplementing their full-time jobs. He recalled his own days as a basketball referee following his college graduation, when he also worked for Duke Energy.
“I had to do that when I came out of college,” said McCrory.
The company has aggressively fought stricter regulation in states throughout the U.S. and in other countries where it operates. Although taxi drivers have staged protests in many cities, snarling traffic and fighting what they see as unfair competition, Uber has largely succeeded so far.
Uber is also facing a legal challenge from drivers in California, who argue that they should be treated as employees and not independent contractors, which would give them greater benefits but raise Uber’s costs.
The services’ popularity is readily apparent. McCrory said that Thursday, after a concert, he was waiting for his security detail to pick him up in a black SUV. When the SUV pulled up, he said, someone who had ordered a ride from Uber and was also expecting a black SUV got into the governor’s ride.