Colorado Rolls Out the Welcome Mat for Ride-Sharing Apps, Virginia Says No

Ride-sharing companies like Uber and Lyft typically take a rogue approach to launching in new cities by rolling out service first and asking permission later, or not at all.

Ride-sharing companies like Uber and Lyft typically take a rogue approach to launching in new cities by rolling out service first and asking permission later, or not at all.

But regulators are asking the companies tons of questions. This week, officials in Colorado decided they were satisfied with the answers and legislatively authorized the operation of so-called Transportation Network Companies (a term first coined in California). But Virginia has decided that Uber and Lyft have no right to operate there, with the state Department of Motor Vehicles issuing both companies cease-and-desist letters.

Colorado is requiring Uber, Lyft, and other ride-sharing companies who attempt to operate in the state to obtain permits from the Colorado Public Utilities Commission, insure their drivers with a $1 million liability policy and make sure any insurance gaps are covered, and get every car inspected by a certified mechanic. The legislation just signed into law by Colorado Gov. John Hickenlooper also mandates that drivers pass background checks, but unlike cab companies, Uber and Lyft can conduct their own checks. Cab drivers must pass FBI fingerprint background checks. That will likely become a point of contention between cab companies and ride-sharing companies.

Uber, as expected, was thrilled about the legislation: "Today, Governor John Hickenlooper signed into law the first ridesharing legislation in the country," the company said in a Thursday blog post. "SB125 puts Colorado on the map as the first state to legislatively embrace ridesharing, recognizing its enormous impact as a mainstream transportation option for millions of people worldwide. Make no mistake, Colorado has sent a clear message that it embraces innovation, supports consumer choice and empowers small business owners."

Try, try again

While Uber and Lyft are celebrating their win in Colorado, Virginia's DMV is trying to boot both companies out of the Commonwealth.

DMV Commissioner Richard Holcomb issued cease-and-desist letters to Uber and Lyft on Thursday, but the companies have already said they have no plans to comply.

"We've reviewed state transportation codes and believe we are following the applicable rules," Lyft spokeswoman Chelsea Wilson told the Washington Post. "We'll continue normal operations as we work to make policy progress."

Lyft is also plowing ahead in Austin, where Uber and another rival ride-sharing app, SideCar, have run into legal trouble. But Austin recently relaxed its strict opposition to ride-sharing and passed two city council resolutions that may lead to recommendations for ride-sharing regulations. Lyft isn't waiting for those recommendations, but it looks like Uber and SideCar are taking a more cautious approach.

Lyft community manager Emily Castor in a recent interview told me that Lyft waits until it sees high demand for its services in cities before rolling out, but sometimes conversations with regulators go by the wayside. And if at first the company doesn't succeed, it clearly tries and tries again.

Uber won't be left behind--the company is also slowly rolling back into Austin, but its rides are free. For now.

This story, "Colorado Rolls Out the Welcome Mat for Ride-Sharing Apps, Virginia Says No" was originally published by IDG News Service .

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