Mobile app-based driving services like Uber and Lyft, wildly popular in other parts of the country, could soon be operating in Montana after the last regulatory roadblock was cleared last week.
On Friday, Gov. Steve Bullock signed into law Senate Bill 396, which drastically revises and deregulates motor carrier laws in the state and eliminates the requirement that new taxi services demonstrate public convenience and necessity to acquire a certificate from the Montana Public Service Commission.
The bill creates a separate Class E classification for transportation network carrier services like Uber and Lyft. Those companies allow anyone with their own car and a clean driving record to work as “independent contractors” to provide people with rides, and customers book trips online or through mobile phone apps.
The legislation passed by the Senate was officially 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 of the House Rep. Austin Knudsen, R-Culbertson, along with a bipartisan coalition of other lawmakers, including Rep. Daniel Zolnikov, R-Billings.
"Thanks to Governor Bullock along with the leadership of Senator Buttrey, Representative Hill, Speaker Knudsen and Representative Zolnikov, Montana now joins states across the country that have embraced new economic opportunities and safe, reliable rides for the folks in their communities, including veterans, students, seniors and parents,” said Uber spokesperson Kate Downen. “Montanans and visitors have been opening the Uber app for months, asking us to come to town, and we're looking forward to exploring opportunities under the Big Sky."
Uber has been posting job openings across the state, looking to hire full-time, independent contractors to drive their own cars to provide taxi service for people who request rides on the Uber app.
The postings claim that these drivers can work on their own schedule and make up to $20 per hour, as long as they are 21 and have a four-door vehicle.
Uber has not yet announced specific plans to begin operating in Montana, and a spokesperson for Lyft said there are no immediate plans for the company to enter the Missoula market.
Previously, when a new taxi or shuttle service applied for a business license in Montana, any existing taxi companies in the same market could protest the new competition and force a hearing before the Public Service Commission.
The new transportation companies had to prove four things: That a need existed in the market they wish to serve, that existing companies couldn’t or wouldn’t meet customer demands, that economic harm wouldn’t come as a result of the new company, and that they are a "fit operator," meaning they aren't felons and have insurance.
That all added up to a lot of red tape and stifled a lot of competition.
The new bill does away with all that.
Not surprisingly, it was opposed by many existing transportation companies, including Yellow Taxi in Missoula and Mining City Taxi in Butte.
However, Uber had a paid lobbyist this past legislative session – former Montana Republican Party executive director Chuck Denowh. Similar legislation has been brought forward in the past and always failed, but this year everything came together and it passed.
“We worked for four years on this, so I’m just thrilled,” Hill said Monday. “It was cosponsored by a Missoula Democrat and an eastern Montana Republican. It’s going to mean more transportation options for folks from the Bakken to Missoula to other college towns. We had an antiquated regulatory system in place that did not allow for competition like new taxi and motor carrier services such as Uber.”
Hill said her own experiences trying to call a cab in Missoula played a role in her passion for this bill.
“I came to this issue as a former prosecutor who lives and works and plays in downtown Missoula,” she said. “And I frankly heard from constituents that you can’t get a taxi in downtown Missoula on any weekend night. The regulatory scheme was a lie. That’s why the Missoula County DUI Taskforce and the city of Missoula supported this legislation.”
Hill said the old law was out of date.
“There will now be more consumer choice, and that will be a good thing,” she said. “I’m thrilled that we could see an immediate impact on reduction of DUIs and more choices. It took a long time. Before, a competitor could veto a license if you could cause the competitor harm. That’s why there was no competition among taxi services in communities.
"A competitor was allowed to say you were going to harm their business. It made it almost impossible for a new company to start, and we saw that with Green Taxi in Missoula. They spent tens of thousands of dollars just to get the chance to serve consumer needs in a community. People were feeling that all over the state.”
Big Sky entrepreneur Tracie Pabst, who with the help of the Pacific Legal Foundation filed a lawsuit last year against Montana Attorney General Tim Fox and the PSC to repeal Montana's restrictions that allowed taxi and limo services to block new competitors, released a statement Monday.
“I am so pleased that Montana lawmakers have chosen to foster free enterprise and open the door to entrepreneurs in our state,” said Pabst, who operates Big Sky Shuttle. “As a result, Montanans and visitors will enjoy safer and better transportation services and now have a choice."
Taxi service in Montana will no longer be regulated much like railroads and energy utilities, Hill added.
“The law was so antiquated, but now it can be pure, free-market competition and good businesses can prevail,” she said. “It’s a good thing for consumer choice and consumers. It had bipartisan support and plenty of bipartisan opposition, so that was interesting as well. It was a fun group of bipartisan folks who pushed this law through. It was somewhat younger legislators that have an interest in alternative transportation and who are trying to prevent DUIs in our communities.”
Hill said that when she introduced a similar bill last session, Uber wasn’t nearly as well-known as it is now. Currently, the company is the world’s second most valuable startup, worth $41.2 billion, and operates in more than 160 cities worldwide.
Over two-thirds of those cities opened to Uber for business last year. Over 30 jurisdictions around the U.S. have passed comprehensive legislation to allow TNCs to operate, including Idaho and Colorado.
“Part of the fascination for (Knudsen) and I was that Uber wasn’t even a thing last session,” Hill said. “But Uber is going to come here regardless. This law puts Uber on par with other companies, so they will be regulated and subject to the same transportation regulations in the way of safety and insurance as other companies. It makes them equals to start a business and do good work and serve the people of Montana.”