Nebraska State Senator Heath Mello of Omaha

On a 39-1 vote, the Nebraska Legislature moved a bill creating a regulatory framework for transportation network companies (TNCs) like Uber and Lyft to the second stage of debate this morning.

Negotiations continue on one remaining issue of importance to lenders, but it appears the matter will be resolved on Select File prior to moving LB 629 to final consideration.

“LB 629 creates a responsible regulatory framework for TNC’s in Nebraska,” said Sen. Heath Mello,of Omaha, the bill’s sponsor.

Mello also thanked Sen. Jim Smith of Papillion, the Transportation and Telecommunications Committee Chairman, for his help in negotiating compromises on several complex issues.

“This is the most complicated, time-consuming bill of my career,” Sen. Mello said.

Smith returned the compliment.

“Sen. Mello deserves first place for the Patience of Job award,” Sen. Smith said.

Smith also had some pointed comments for one of the TNC’s.

“It’s been challenging to work with one particular TNC that has been behaving in a very uncompromising way across our country,” Sen. Smith said. “At every turn, at the eleventh hour, something changes and they say ‘we’re not going to operate in your state if we don’t get our way’.”

Regardless, it appears the legislation is well on its way to final passage.

Regulatory details yet to work out

“We as policy makers have an obligation to set reasonable guidelines, especially where public safety is concerned,” Sen. Smith said.

The lone dissenter was Sen. Paul Schumacher of Columbus, who chastised the Legislature in general, and Republicans in particular, for departing from free market principles.

“This does not fit the paradigm of regulating a railroad or a taxi company,” said Sen. Schumacher. “Where has been the proof that this class of company needs regulation in Nebraska? Where is the litany of examples where the free market has failed?”

The body adopted an amendment by the Transportation & Telecommunications Committee that revised several provisions in the original bill. For example, the Public Service Commission will have more time to consider and act on applications for TNCs, additional information is specified that TNCs must provide to the PSC about drivers and vehicles, and drivers must be at least 21 years of age. Drivers are also limited to no more than 12 hours of service during a 24-hour period.

The remaining issue to be resolved concerns who is responsible for informing lenders that a vehicle on which they hold a lien will be used for TNC purposes. As it now stands, that is the driver’s responsibility although there is no clear enforcement mechanism. An amendment proposed and withdrawn would require TNCs to conduct a lien search and inform lenders of any vehicles with loans that are to be used for TNC services. Several senators agreed to work on compromise language to be considered at the next round of debate.

“The Internet has dramatically changed our world”

Some rural senators are hopeful that the introduction of TNCs in Nebraska will benefit small communities as well as urban areas, but also raised some concerns. Sen. Jim Scheer of Norfolk has reservations about the viability of his community’s small cab company in the face of TNC competition.

“Uber might choose to cherry-pick the nights they drive and pick up enough business to take most of the profit margin from the cab company,” said Sen. Scheer. “The cab company still has responsibility for taking elderly citizens to medical care or the pharmacy. If we lose the cab company, Uber isn’t going to pick up the difference.”

Several references were made to recent legislation in Kansas that was vetoed by Governor Sam Brownback.

“This is not the Kansas bill,” Sen. Smith said. “They mandated comprehensive liability insurance from app-on to app-off.”

In the end, no one disagreed that TNCs represent a key aspect of the new economy and should be welcomed in Nebraska, including Sen. Schumacher.

“The Internet has dramatically changed our world,” said Sen. Schumacher. “This is the type of industry that the new economy is all about. Let’s let our entrepreneurs have a shot.”