County’s ride-sharing business licensing powers questioned

Local governments can't impose special taxes, fees or requirements on transportation network companies that aren't applicable to other businesses, the state's Legislative Counsel Bureau says.

That means Clark County's efforts to develop a separate business license category for companies such as Uber and Lyft could be illegal and ride-hailing companies could begin operating in Southern Nevada as soon as they're licensed by the state.

Uber and Lyft are scheduled to be considered for licensing Monday and the County Commission is planning to introduce an ordinance establishing business licenses for those companies on Tuesday.

County officials had no immediate reaction to the interpretation after being alerted to it late Friday.

"Assembly Bill 176 provides for the regulation of transportation network companies by the state and expressly prohibits local governments from exercising powers relating to the imposition of taxes, fees or requirements on transportation network companies that are not of general applicability to all other businesses within the jurisdiction of the local government," an interpretation by Legislative Counsel Brenda Erdoes says.

Erdoes sent the five-page interpretation to state Sen. Michael Roberson, R-Henderson, on Friday after the issue was raised at a Nevada Transportation Authority hearing to approve regulations for ride-hailing companies.

The authority board unanimously approved the 31 pages of regulations Friday morning after a 90-minute hearing at the Sawyer Building, setting the stage for company licensures.

"It is the opinion of this office that, if a transportation network company has completed all of the requirements to obtain a business license from local government which are of general applicability to all businesses within its jurisdiction, the local government may not withhold issuance of a business license to the company," Erdoes said.

She said that while local government generally has broad discretion to impose business license fees on businesses within its jurisdiction, the Legislature specifically curtailed that discretion on transportation network companies.

Roberson on Friday said the interpretation has been reviewed by state Attorney General Adam Laxalt's office, which concurs with the analysis.

Earlier Friday, the Transportation Authority heard support and criticism for the regulations in a public hearing. Most of the audience at the hearing consisted of prospective drivers, many of them wearing pink T-shirts boosting Lyft, the smaller of the two ride-hailing companies expected to be approved for operation next week.

The vote came after some contentious debate between Chairman Andrew MacKay and Commissioner George Assad over whether the board had the authority to include a regulation mandating pre-employment drug testing for drivers.

MacKay and Commissioner Keith Sakelhide concurred that it was the Nevada Legislature's intent not to include pre-employment drug testing as a licensing requirement while Assad said it was the authority's responsibility to enact measures to protect the riding public.

Knowing a proposal would be voted down, Assad didn't even offer a motion to include testing.

Among the critics of the regulations were attorneys representing limousine and taxi company interests.

Kimberly Maxson-Rushton, representing the Livery Operators Association, said the regulations "don't reflect the high standards of safety" the authority generally has for the tourist industry.

She said the regulations don't address vehicle inspections by certified mechanics, routine vehicle maintenance standards, price gouging and predatory pricing, drug testing and denied transportation to disabled customers.

Sakelhide, who was the presiding officer for the hearing, said the board's hands were tied on adding a more thorough background check to the regulations. He criticized the existing background check standard, calling it "a Google background check."

"We have to accept the legislative standard," Sakelhide said. "I personally would want a fingerprint background check, but we can't substitute my judgment for the judgment of the Legislature."

He said the transportation authority has been allowed to conduct a study on the effectiveness of the current background check standards. He said he hopes lawmakers will review it and consider legislative changes in 2017.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta.