BOSTON - Cities and towns will get wide-ranging authority to regulate and charge fees for ride-hailing companies such as Uber, Lyft and Sidecar under a proposal by Gov. Charlie Baker.
Baker's legislation, filed on Friday, calls on the state Department of Public Works to join local officials and the ride-hailing companies to develop statewide rules for the services.
Drivers for the companies will have to submit to criminal background checks, results of which are shared with local law enforcement and maintain at least $1 million in liability insurance. A municipal advisory group will represent the interests of cities and towns.
"We believe this strikes the right balance between innovation and public safety," Baker said Friday. "The most important thing is to make sure there are standards in place for anyone who is going to be driving someone."
Baker said cities and towns will be allowed to impose requirements even stricter than the state's.
"Cities and towns can choose to do whatever they want," he said. "But our hope is that for simplicity's sake, that we would end up with the same rules. We want a statewide standard so the rules of the game are the same."
Taxi drivers - many of whom pay hundreds of dollars a year for licenses, insurance and vehicle inspections - have long complained that the ride-hailing companies have an unfair competitive edge because they are unregulated.
Taxi drivers and cab companies have prodded the state to come up with rules for the ride-hailing services. A major sticking point has been whether new requirements would allow local governments to regulate the industry.
Legislation filed previously by Rep. William Pignatelli, D-Lenox, is similar to Baker's bill but sidesteps local control and allows the state to regulate drivers and collect hundreds of thousands of dollars in licensing fees.
Under state law, communities can license taxis and limousines that pick up fares within their borders. That often involves permit fees or mandatory insurance and background checks for drivers.
Some local governments have also approved rules for ride-hailing services, while others were awaiting action by the state.
Stephen Regan, a spokesman for the Massachusetts Regional Taxi Advocacy Group, said Baker's legislation doesn’t cap the number of drivers for ride-hailing services. Uber alone has an estimated 10,000 drivers in Boston.
Regan said the state shouldn't allow ride-hailing companies to operate while the legislation is debated.
"It's unfortunate that they're allowing these illegal entities to continue operating," he said. "I'm not even sure that there needs to be a new law for these operations, which are essentially identical to taxi services."
In a statement, Uber's East Coast General Manager Meghan Joyce welcomed the legislation, saying it allows the company to offer "reliable transportation options and opportunities to earn a living with greater flexibility."
Chelsea Wilson, a spokeswoman for Lyft, said the San Francisco-based company also supports Baker's proposal.
"The people of the commonwealth of Massachusetts have demonstrated their support for ride-sharing, and we look forward to working with legislators to finalize a bill that maintains this consumer option," she said.
Ride-hailing services leverage mobile devices, with customers using apps to hail rides. Drivers in the area are notified of those requests.
No money changes hands, unless it's a tip. Riders register for the services and pay through the app.
Since entering the market in recent years, Uber and Lyft have encountered angry taxi drivers and lawsuits in dozens of states.
The companies have also faced difficult questions about the drivers allowed in their networks; some drivers have been accused of sexually assaulting passengers.
In the meantime, ride-hailing companies and cab companies have heavily lobbied lawmakers and regulators.
Baker, whose proposal hinges on support of the Legislature, said he isn't looking to put taxis out of business by allowing ride-hailing companies to operate.
"People deserve choices, and I think in the end the market will make the choice about which one makes more sense," he told reporters at a briefing on Friday. "The consumers will get to choose, which is as it should be."
Christian Wade covers the Statehouse for CNHI's Massachusetts newspapers.