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Gaming Guru

Richard N. Velotta

Uber, Lyft licensing fees in Nevada will be highest in the nation

17 July 2015

Representatives of ride-hailing companies Uber and Lyft say the cost of being licensed in Nevada will be higher than in any place in the country. But don’t expect that to deter those companies from jumping into the market as soon as they can.

Legal experts from the two companies and representatives from Nevada’s taxi and limousine industries spent 5½ hours Thursday debating regulations proposed by the three-member Nevada Transportation Authority on transportation network companies, known in the industry as TNCs.

For the most part, the three Transportation Authority commissioners — Chairman Andy MacKay, George Assad and Keith Sakelhide, the presiding officer for the hearing — listened as the public offered opinions about regulations involving the cost of transportation network companies to be licensed, whether drivers should be randomly drug tested and the records companies would have to provide to regulators.

Commissioners slogged through less than half of the proposed rules and will continue their review July 23. Commissioners will be in Carson City but, like Thursday’s session, the meeting will be teleconferenced to both locations.

One of the highlights of Thursday’s session was the disclosure that the price of admission for Uber and Lyft to operate in Nevada would be higher than in any U.S. location they operate.

Under the proposed regulations, TNCs would be required to pay a $500,000 fee for an unlimited number of vehicles. The rules offer lower costs for fewer vehicles: $10,000 for 100 vehicles in the first year, $50,000 for 500 in the first year, $100,000 for 1,000 and $250,000 for 2,500 vehicles.

Uber officials said when adding the 3 percent Legislature-approved tax implemented on every ride to fund the state highway fund and a new medical school at the University of Nevada, Las Vegas, and a $50-per-driver application fee, the cost of operating in Nevada would be the highest of any jurisdiction the company serves in the United States.

But regulators defended the proposed price, saying the addition of TNCs will increase the need for oversight and enforcement. MacKay noted that a problem the authority is considering is a spike in motorists pretending to be Uber drivers and TNC drivers that try to solicit rides without using an app, which would be illegal.

“I don’t think the TNCs realize how big a problem that could become,” Sakelhide said.

Uber and Lyft had a team of legal experts offering comments on behalf of their companies and some of the strongest opposition came from the Livery Operators Association and the Nevada Bus and Limousine Association, which want to be sure the TNCs operate on a level playing field with existing limousine and cab companies.

But Uber and Lyft officials made it clear in the beginning that they believe they’re different from existing cabs and limos because of the technology they use for customers to hail rides from contracted drivers through a smartphone application.

Because of that, they said, the rules should be different and they’re counting on the authority to follow the guidelines of Assembly Bills 175 and 176 which established TNC use in Nevada. In several cases, company representatives questioned the implementation of a regulation because it wasn’t specifically addressed in those laws.

Another issue debated was a requirement for pre-employment and random drug testing. The TNCs said they intend to require a zero-tolerance policy on drug use, meaning they would immediately terminate their contract with any driver found impaired by drugs while driving with the app.

Opponents contend the companies should be more pre-emptive and require drug tests before a contractor is permitted to drive with occasional random tests while contracted.

Opponents also encouraged better oversight to level the playing field.

At one point, attorney Kimberly Maxson-Rushton, executive director of the Livery Operators Association, suggested that commissioners adopt a regulation establishing an intervenor process similar to systems in place before the Transportation Authority and the Nevada Taxicab Authority that enables industry rivals to comment on a new applicant.

Commissioners took the suggestion under advisement.

Because commissioners fell behind in the review of regulations, they encouraged the public to submit written comments prior to next week’s meeting.