A new law meant to regulate and tax ride-sharing services like Uber and Lyft will need to be clarified when legislators reconvene in Annapolis in January.
Sen. Thomas V. “Mac” Middleton, D-Charles County and chairman of the Senate Finance Committee, said Monday that changes to the new law will be needed to clear up some vagaries and contradictions identified by the Office of the Comptroller as new regulations were being drafted.
“This is a large piece of legislation,” said Middleton. “To only have this many gray areas in it is pretty amazing.”
The law, which took effect July 1, was meant to impose a regulatory and tax structure on so-called transportation network services — a new category of services under which companies such as Uber and Lyft now belong. Up until then, those companies, unlike the tax industry, were unregulated.
The new law, passed in the waning hours of the 90-day session, set a standard for licensing of drivers as well as insurance requirements and provisions to provide for wheelchair-accessible vehicles. Additionally, it set up a fee of up to 25 cents per trip in most counties and municipalities that already regulate taxi service.
Baltimore City, which has separate laws governing taxi service, could impose a fee over the new cap.
The money collected from the new optional fee is meant to go to transportation projects.
But some of the law’s provisions appeared to be in conflict with each other, according to a letter sent by Comptroller Peter V.R. Franchot to House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller Jr.
Central to the concerns were questions about which counties or municipalities are able to charge the fee and, in the case where both a county and incorporated subdivision regulate the service, which fee takes precedence.
The answers contained in a seven-page response from Middleton and Del. Dereck E. Davis, D-Prince George’s County and chairman of the House Economic Matters Committee, are almost as complicated as the queries in Franchot’s letter and depend on the county in question.
Middleton said the legislature had intended to allow almost any local or municipal government to impose the fee if it wanted. The law was meant not only to impose a regulatory structure but to determine which fee, local or municipal, takes priority.
Currently, six counties —Anne Arundel, Baltimore, Harford, Howard, Montgomery and Prince George’s Counties — regulate taxi service. Within those counties, only the municipalities of Aberdeen, Bel Air, Havre de Grace and Annapolis are also authorized to regulate service within those jurisdictions.
Middleton said legislators intended for the municipalities that already regulate taxi service to be able to impose a fee, if they choose, for trips originating within their jurisdictions. The counties could impose a 25 cent fee for trips originating in any other part of the county.
Baltimore, Howard, Montgomery and Prince George’s counties, which have no regulated municipalities, would have priority to impose a fee if they do so by July 1, 2016, according to Middleton.
Right now, 13 other municipalities around the state regulate taxi service even though their respective surrounding counties do not as of yet. Most notable of those is Ocean City. The beach resort regulates taxi service while Worcester County does not. Should the county decide to impose the fee, it can only do so in areas outside of the municipality.
This was the second year that legislation intended to set up a regulatory structure for ride-sharing services was considered by lawmakers in Annapolis. In a 2013 case before the Maryland Public Service Commission, Uber agreed that some of its service should be treated as a common carrier subject to regulation.
Since then, states such as California, Florida and Virginia have taken steps to regulate the service or set minimum insurance standards on similar services.
In the past session, Uber alone spend more than $127,000 related to lobbying Maryland legislators, according to state ethics reports.
A spokesman for the company said it believes that the law that was enacted will need clarification.
“We recognize the ride-sharing legislation enacted this spring allows local governments to impose an assessment on TNC trips to help fund transportation-related initiatives, including improving access to wheelchair-accessible vehicles, and we look forward to working with local jurisdictions on the implementation of any assessments,” Tyler Bennett, a spokesman for Uber, wrote in an email response to a request for an interview.