Statewide rules set for ride-hailing service Uber

By Erin Murphy, Gazette-Lee Des Moines Bureau

DES MOINES - With ride-hailing service Uber in five Iowa communities and looking to expand, Gov. Terry Branstad signed into law Monday regulations that will set minimum requirements statewide for such services.

The law establishes standards for conducting criminal background checks on drivers and attesting that ride-hailing services are adequately insured.

While Uber has said the statewide regulations are a welcome relief from contending with a patchwork of different rules from different cities, the law allows municipalities to adopt more stringent measures.

Uber entered the Cedar Rapids market in December 2014 and the Iowa City market late last month. The new statewide rules are not expected to alter its operations in the Corridor. The service also operates in Ames, the Quad Cities and Des Moines.

'This is really a positive step forward for Iowa,” said Sagar Shah, general manager for Uber in Iowa. 'It's real exciting for the industry, for the riders and drivers, and the economic opportunities that will be created for everyone with this uniform regulation.”

Ride-hailing services like Uber and a competitor, Lyft, use a smartphone applications to pair people looking for a ride with drivers who are independently contracted to give rides in their own vehicles. Under the Uber model, fares can vary not only by destination but, the company says, by traffic, weather and other factors.

In market after market Uber has entered, traditional taxi companies have complained the ride-hailing service doesn't play by the rules - that it doesn't pay the same regulatory fees, charge the same fares or have the same background checks and insurance burdens.

But many city leaders welcome Uber nonetheless, partly because there is a demand. Uber has served more than 100,000 Iowans, according to a company official.

The company plans to expand to Sioux City this summer. Shah said future expansion plans include the Cedar Falls-Waterloo metro area.

'We look forward to expanding in new cities now, around Iowa,” Shah said. 'One excellent outcome from this bill is the ability to expand elsewhere in the state.”

The legislation generated a tense debate over insurance requirements, but ultimately was approved unanimously by state lawmakers.

'As technologies and industries continue to innovate and evolve, so should Iowa's laws. And this bill aims to do just that,” Branstad said.

The law requires a ride-hailing company to pay an annual permit filing fee of $5,000, which will go to the state's Road Use Tax Fund for construction and repairs.

Uber drivers must carry $1 million in liability insurance. If the vehicle being used to transport customers has a lien, the lienholder must be notified of its use.

The law also required the ride-hailing service to conduct - or to have conducted by a third-party - a state and national background check.

Drivers cannot be hired, the new law says, if the background checks shows they are listed on a national sex offender registry or if in the last seven years they have been convicted of violations that include a felony or 'of any crime involving resisting law enforcement, dishonesty, injury to another person, damage to the property of another person, or operating a vehicle in a manner that endangers another person.”

The law takes effect Jan. 1.