A state consumer-rights watchdog on Tuesday called for formal investigations into ridesharing companies Uber and Lyft, questioning the legality of their operations in Maryland.
People's Counsel Paula M. Carmody sent letters to the Maryland Public Service Commission calling for investigations into Lyft and Uber's lower-cost UberX service, which both connect passengers with independent drivers through smartphone apps.
"We have every reason to believe that the individuals responding to Uber's and Lyft's requests for drivers to provide these services are not aware that Maryland law requires them to have a license," Carmody said in a statement. "It also is likely that drivers are not familiar with restrictions in their personal automobile insurance policies if accidents occur while using their cars for commercial purposes."
Carmody's office acknowledged the PSC, which regulates taxi companies, is already considering whether to more strictly regulate Uber and Lyft as common carriers in a separate case, but said its request for additional investigations puts "greater scrutiny" on the companies' practices.
Taylor Bennett, an Uber spokesman, said the company covers drivers operating on its platfrom with a million-dollar insurance policy that is "exponentially greater than what taxi companies offer."
He also said drivers on the Uber platform are not breaking any Maryland licensing laws while the PSC continues to review its decision on common carrier regulations.
The company is hopeful the PSC will instead "create regulations that actually apply to technology companies, that allow us to partner with those drivers, allow them to be their own boss," Bennett said.
Categorizing Uber as a common carrier would drive its UberX service from the state, he said. "It simply wouldn't work for our current business model."
Uber's black car and SUV drivers are already commercially licensed under the PSC, Bennett said.
Chelsea Wilson, a Lyft spokeswoman, said Lyft also provides "comprehensive insurance coverage" for its drivers. A million-dollar policy goes into effect when passengers are matched with a driver, she said. Another $100,000 policy applies whenever drivers are on the Lyft platform.
Wilson also said Lyft's drivers are "teachers, they are students, they are retirees" who are making extra money on the side to help make ends meet, and shouldn't be regulated like full-time taxi drivers.
"That's like putting a square peg into a round hole," she said.