Governor Charlie Baker on Friday waded into the fight between ride-hailing services and traditional taxi cab operators, unveiling legislation that would allow Uber, Lyft, and other companies to operate under a new category of state supervision.
The proposed law would require the services to obtain a license from the state and subject their drivers to two criminal background checks, one by the company and another by Massachusetts regulators. It would allow the state to ban drivers with criminal records.
The companies would pay an annual tax to offset the cost of their oversight, maintain existing insurance coverage for their drivers, and have their cars pass an annual inspection. If adopted, one visible difference for consumers could be signs identifying the ride-hailing companies' cars.
Taxi companies and drivers have complained bitterly that Uber and other services are unfairly undermining their businesses because they are not subject to the same rules. Drivers contend the high costs of leasing cabs or financing expensive tax medallions cut deeply into their income.
But Baker seemed unmoved by the cabbies' complaints.
"In the end, the market's going to make the decision about which ones make the most sense," Baker said Friday. "The consumer gets to make the call with respect to what they think is the best mode of transportation for them, which is exactly as it should be."
Asked whether taxi regulations, which are mostly controlled by local municipalities, should be loosened, Baker said, "We would be happy to have a conversation with the taxi industry if they would like to have that conversation."
In response, taxi lobbyists vowed to fight Baker's proposal in the Legislature. They insisted that Uber and similar companies are essentially taxis and should be regulated as such.
"There's nothing new about what Uber does. They just say there is so they don't have to follow the rules," said Stephen Regan, a spokesman for the Massachusetts Regional Taxi Advocacy Group, which represents cab owners and drivers. "We already have laws that govern transportation for hire in all 351 cities and towns."
Regan accused the ride-hailing companies of purposely ignoring laws and regulations while building up a customer base, in the hopes officials would be reluctant to crack down on a popular service.
"Their business plan is to not follow the law," Regan said.
Despite his criticism, Regan acknowledged the popularity of ride-hailing services, and said he hoped the competition would spur innovations by taxi companies. One possibility, he said, was a single, smartphone app connected to various cab companies in the Boston area that riders could use to hail taxis as easily as an Uber vehicle.
The ride-hailing services have run into opposition from some local officials; Braintree, for example, is considering banning Uber and similar services. But most communities, including cities such as Boston, have largely taken a hands-off approach. Mayor Martin J. Walsh endorsed Baker's legislation Friday, and a spokeswoman said a city committee continues to work on comprehensive reforms to the taxi industry.
Baker touted the safety benefits of the proposed state background checks, though he acknowledged they may not turn up crimes committed in other states. Ride-hailing companies said they already conduct such checks themselves, but agreed to the additional level scrutiny.
Uber and other companies came under fire this year after several alleged assaults on women in the Boston area by drivers for the services.
The ride-hailing services would also have to regularly submit to the state a roster of drivers, including their addresses, a provision long sought by law enforcement.
The measure proposed by Baker would essentially codify regulations adopted by then-Governor Deval Patrick at the end of his term in December.
In 2014, Uber hired David Plouffe, Barack Obama's campaign manager in 2008 and a strategist for Patrick's campaigns in 2006 and 2010. Plouffe's job is to fend off stringent regulations nationwide.
The Massachusetts proposal was drafted in collaboration with the ride-hailing companies, which have negotiated similar measures in Arizona, Maryland, Virginia, Tennessee, and Utah.
Lyft Inc. and Uber Technologies Inc., the two most prominent ride-hailing companies, released statements in support of the Baker bill.
House Speaker Robert DeLeo said in a statement that the legislation "merits great consideration and input from both sides. I've heard many accolades about companies like Uber and Lyft. At the same time, we must consider fairness, regulations and safety precautions."
The legislation would create a new regulatory category for ride-hailing companies, called "transportation network companies." Such companies would be overseen by the Massachusetts Department of Public Utilities, which already regulates buses, trucks, and other modes of transportation.
However, many significant details are not spelled out in the proposal. For example, it's unclear which criminal offenses would disqualify an applicant from becoming a driver or how the companies would calculate their state taxes.
If the Legislature approves the bill, the DPU would have six months to draft specific regulations, a process that would almost certainly be the subject of intense lobbying by ride-hailing and taxi companies.
The bill also would establish a five-member oversight advisory committee appointed by the governor that would include representatives from Boston, Somerville, and Cambridge, where the services are most popular.
Baker said cities and towns could still pass stricter rules on ride-hailing services even after the bill passes, but added that he hoped there would be a consistent statewide standard.