New Jersey ride-sharing laws to focus on safety and availability

The New Jersey state legislature is currently in discussions regarding how to regulate ride-hailing companies such as Uber and Lyft. Work to legalise the services has come from both the senate and assembly offices with proposals including background checks of drivers by state police, a required $1.5m liability coverage, and a $50,000 permit fee per ride-hailing company. 

As three New Jersey cities attempt to regulate ride-hailing companies, the state legislature is negotiating its own proposals to rein in Uber and its ilk.

The Senate will consider a bi-partisan bill meant to set safety standards and protect riders, Sens. Paul Sarlo (D-36) and Joseph Kyrillos (R-13) announced.

The proposal, introduced Monday, includes background checks of drivers by state police and a requirement that each driver have $1.5 million in liability coverage. It would also authorize the state Motor Vehicle Commission and the Division of Consumer Affairs to inspect company records to ensure legal compliance, the senators said.

Meanwhile, Assemblymen Joseph Lagana (D-38), Troy Singleton (D-7) and John Wisniewski (D-19) on Wednesday said they, too, plan to introduce a bill that would regulate ride-hailing services.

Among the provisions outlined in the Assembly proposition are a $50,000 permit fee per ride-hailing company, a Social Security number trace and background check of each driver, and maintenance of ride history records.

The statewide bills are intended to bring consistency as Newark, Elizabeth and Orange all seek their own regulations that would govern each municipality.

To understand the impact of statewide regulation in New Jersey, NJ Advance Media spoke with Marc Pfeiffer, an assistant director of Rutgers University's government research center and former municipal administrator.

The interview below has been condensed and edited for clarity.

NJAM: We're now seeing the clear possibility of a law that would manage companies like Uber and Lyft on a statewide level. Is that good, or should each municipality be left to develop its own regulations?

Pfeiffer: Statewide policy probably makes the most sense. It's easier for operators, it's easier for the drivers, that they don't have to worry about one municipality having a policy that's different from another municipality. It ensures that there's not a multiplicity of fees that any driver or ride-sharing company would have if each municipality has its own program.

NJAM: Municipalities have raised various issues surrounding ride-hailing companies, including where such businesses can and cannot pick up passengers, how they're insured and what kinds of background checks they use. Which pieces of this puzzle should state legislation address?

Pfeiffer: You have to focus on the outcomes and what the goal is. If everybody is focused on ensuring that their drivers are safe, you may be able to get there a couple of different ways. We normally default to fingerprint checks, but I don't think fingerprints are necessarily perfect. Here's the thing, at the end of the day: If you wanted to hail either a cab or somebody from Uber or Lyft, are you going to feel secure going in that car alone?

NJAM: Are there examples of other situations in New Jersey where municipalities were creating their own systems before the state stepped in and adopted a blanket policy?

Pfeiffer: Zoning. Municipalities can't be arbitrary about how they zone property; they all have to function under a state law which sets up rules under which they can operate. Up until the '70s, every municipality could adopt its own building code. Municipalities could be kind of arbitrary in what standards they used. The result was the state construction code that adopted standard codes for all municipalities, which made it much easier for builders and contractors and homeowners.

NJAM: Newark and Elizabeth both threatened to prevent ride-hailing companies from picking up passengers at certain locations, like Newark Liberty International Airport and Elizabeth's train stations. That seems to be more about competition with taxis than about public safety.

Pfeiffer: Here's the core of this problem: You're running up against established businesses that have been doing taxi services for a long time, and they now have a competitor. What you're seeing is that economic issue being played out -- the new technology displacing the old one. One of the issues is you want to have a structure that is open to anybody that needs a ride. Taxis are pretty much open to anybody. If the world was just left to Uber and Lyft, you're going to have a part of the population that's going to be marginalized, which is primarily a lower-income, older population who use taxis. They may not have a smart phone or a credit card.

NJAM: Is that a consideration when municipalities consider barring Uber and Lyft from public transportation hubs?

Pfeiffer: They may be saying that in order for taxis to survive, they need to have a monopoly on at least one part of things. If they're left with just those people who don't use ride-sharing services, that's probably not enough for taxis to stay in business. Government needs to think about making sure that these services are available to anybody who needs a ride and that the driver is safe and secure. You've also got municipalities that don't have any taxi services at all because they don't have a train station or downtown. Having ride-hailing services available to them would be a good thing. That's what makes this tough.

Marisa Iati may be reached at miati@njadvancemedia.com. Follow her on Twitter @Marisa_Iati. Find NJ.com on Facebook.