Colorado passes nation's first law regulating rides-on-demand

DENVER Fri Jun 6, 2014 5:28pm EDT

Colorado Governor John Hickenlooper lays out his plans for the next state legislative session at a news conference in his office at the Capitol in Denver December 19, 2013. REUTERS/Rick Wilking

Colorado Governor John Hickenlooper lays out his plans for the next state legislative session at a news conference in his office at the Capitol in Denver December 19, 2013.

Credit: Reuters/Rick Wilking

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DENVER (Reuters) - Colorado has become the first state to pass legislation regulating companies such as Uber and others that let the public hail rides from drivers via smartphone apps.

Officials are grappling with how to regulate the fast growth of rides-on-demand services, which have drawn opposition from taxi and limousine operators who say the tech companies have an unfair advantage because they don't face the same rules.

Colorado's law, which passed with bipartisan support and was signed by Governor John Hickenlooper on Thursday, requires companies to carry $1 million in liability insurance, have their drivers pass background checks and their vehicles inspected by certified mechanics.

The measure's Republican sponsor, Libby Szabo, said the emerging technology is "a great example of entrepreneurship."

"The necessary safety regulations will be in place and these new, innovative transportation services will have the freedom to expand in Colorado," she said.

In a statement accompanying the bill-signing, Hickenlooper, a Democrat, said he remained concerned that the companies will be allowed to conduct their own background checks.

"We ask the (Public Utilities Commission) staff ... to monitor this issue over time and report any identified problems," he said.

Uber said on Friday it raised $1.2 billion in a funding round which valued the service at more than $18 billion - one of the highest price tags ever for a Silicon Valley startup.

In a blog post, the company was fulsome in its praise for Colorado's lawmakers, who it said had passed legislation that supported consumer choice and empowered small-business owners.

"With a vision for innovation, they resisted the misinformation and efforts of special interests and instead, proactively reached across the aisle to develop sensible regulations that allow ridesharing to thrive," Uber said.

Uber was founded in 2009 by two U.S. technology entrepreneurs, Travis Kalanick and Garrett Camp, and has expanded to operate in 128 cities across 37 countries.

(Editing by Daniel Wallis; Editing by Sandra Maler)

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