Uber is now allowed to operate in Montana, but it is not yet clear when the on-demand ride-sharing service will be available.
The company became the first "technology network carrier" authorized to operate in the state after the Montana Public Service Commission approved its license on a 4-1 vote Tuesday.
The approval is effective immediately, although the company hasn't announced any specific start date.
Uber Technologies Inc., a U.S.-based company that now operates in 300 cities worldwide, developed a smartphone app that connects independent contractors driving their own cars with people who need rides. So far, it is the only company to have applied for a Class E Technology Network Carrier license in Montana.
Senate Bill 396, which PSC vice chairman Travis Kavulla helped draft, was passed by the 2015 Montana Legislature last spring, opening the door to ride-sharing companies like Uber and Lyft to operate in the state.
In the past, any new taxi or transportation service provider in Montana had to prove a variety of criteria before they were allowed to operate, including that they wouldn’t harm competitors.
"Before this legislation, the PSC was required to determine whether the public needed a new service," said Kavulla, a Great Falls Republican. "That is a question properly answered by consumers themselves and not a government agency. It’s exciting to see more choices for customers in the transportation marketplace."
PSC chairman Brad Johnson, a Republican from East Helena, said Uber's arrival in Montana could prompt improvements by other transportation services.
"By embracing advancing companies like Uber, Montanans not only have another option to get from one place to another, but there is now an additional incentive for existing transportation companies to improve as well," he said.
Uber has not announced any specific plans to operate in Montana, but it has been posting job openings across the state, looking to hire independent contractors to drive people who request rides using the Uber app. The postings claim drivers can determine their own schedule and make up to $20 per hour as long as they are 21 or older and have a vehicle that has four doors and is a 2005 model or newer.
"We are excited to connect Montana residents with reliable rides in the future," said Uber spokesperson Taylor Patterson, who declined to elaborate on a start date.
Patterson said Uber's Montana website has answers on everything from how to apply to drive to payment questions. The website is located at ubermontana.com.
Commissioner Bob Lake, a Republican from Hamilton, cast the lone dissenting vote.
"The commission’s actions today gives one type of business model within the transportation industry a special exception that provides an unfair advantage to compete with existing businesses, and we are not doing consumers any favors by doing so," Lake said. "Uber will operate without any oversight from a Montana-based agency. This will have a detrimental effect on the current license holders, and by approving this license we are throwing a bunch of people under the bus."
The legislation that made Uber’s operation possible was sponsored by Sen. Ed Buttrey, R-Great Falls, but the original legislation in the House was co-sponsored by Rep. Ellie Hill, D-Missoula, and Speaker Austin Knudsen, R-Culbertson, along with a bipartisan coalition of other lawmakers.
"I’m thrilled to hear that," Hill said Tuesday when told of the PSC’s decision. "It’s the best news for everybody, from small business to tourism to reducing drunk driving. It’s been a long road. Before, any new taxi service in this state was facing what was essentially a competitor's veto."
Hill said she introduced similar legislation in 2013, and there was both strong support and strong opposition to it. This year, however, bipartisan sponsorship of the bill was enough to power it through the state Senate.
"We had one bipartisan silver bullet this session, and that was our bill," Hill said. "I’m a Democrat from Missoula and Austin Knudsen is a Republican from eastern Montana, but we heard the same issues from our constituents. It really took both parties working together, and it is going to be good for the state in a lot of different ways."
Hill said she hopes that when Uber begins operating in the state, it reduces drunken driving by virtue of having more transportation services on the road here.
Montana was one of the few remaining states, including Wyoming and South Dakota, where Uber and other app-based ride-sharing services didn't operate.
The license approved Tuesday authorizes Uber to provide rides statewide, although the company is likely to limit operations to a few core cities, at least to start. In April, the company announced its intention to bring the service to Missoula and Helena as part of its Rural Roads Initiative. Uber has since created Facebook pages to recruit drivers for Missoula, Helena and Billings, suggesting those cities could be the first in the state.
Montana’s law passed with less opposition than many states have seen.
From West Virginia, which banned ride-sharing services, to Washington, where the regulations were approved despite stiff opposition, opponents led by taxi companies and their lobbyists raised concerns about creating an unfair advantage and the safety of riders. They questioned why cities and states would create new licensing procedures for ride-sharing services without loosening strict regulations for taxis, saying that doing so would result in higher operating costs.
Others questioned the adequacy of Uber’s vehicle inspections and background checks compared to similar, often more stringent, requirements for taxis.
According to the license approved by the state, Rasier-MT – the name of the limited liability company set up by Uber to apply for the license from the PSC – has $100,000 in operating capital on hand for the launch. Drivers will contract with Rasier.
The company lists insurance coverage of $100,000 for death or injury per incident. It also listed coverage of $25,000 for property damage when the driver is logged into the Uber app but does not have a passenger, and $1 million when a passenger is in the car.
During the 20-day protest period last month, the PSC received one protest of Uber’s application from the Montana Authority Holders Association, an organization that appears to be based in Billings but that doesn't have an Internet presence. After the PSC issued a deadline for the association to appear for a hearing, the protest was withdrawn, allowing commissioners to approve Uber’s application.