Rideshare Companies: A New Landscape for Business Licensing

Local jurisdictions are rapidly enacting licensing requirements for ridesharing companies such as Uber and Lyft. These so-called “transportation networking companies” or TNCs operate through a social media application that connects passengers and drivers.

In November, the Las Vegas City Council voted to require a semi-annual business licensing fee of $50 for active drivers operating within the city over a 6-month period.1 In April of 2015, Uber arrived in Portland, Oregon to a last minute amendment by the City Commissioner requiring Uber drivers to also obtain a business license through the city before they could actually operate. One reason for these new regulations was to enable more effective tracking of Uber drivers.2 Uber has also been making headlines recently in various local jurisdictions across Alabama.  Although lacking a fee, Birmingham, Alabama began requiring business licenses of Uber drivers in December of 2015.3 In Tuscaloosa, Alabama Uber drivers were issued city citations for operating the vehicle without a business license.4 As recently as January 21, 2016 Montgomery, Alabama city council considered requiring Uber drivers to apply for the city’s business permit, but the issue was tabled until the next city council meeting in early February.5  In Baldwin County, Alabama Uber received a cease and desist letter by the county subsequent to discoveries that drivers were operating in Gulf Shores and Orange Beach illegally. Since November of last year, at least three Uber drivers were cited for operating without a business license.6

Drivers of ridesharing companies entering into countywide or multi state jurisdictions may even need multiple business licenses depending on which jurisdictions they enter as well as how many. The trend is toward increasing business licensing requirements among local jurisdictions for drivers of ridesharing companies. Drivers of such companies should be prepared to pay fines for operating in cities where a license is required if they don’t properly investigate that city’s business licensing requirements beforehand and, as evidenced above, the ride sharing companies needlessly expose their brand and risk cease and desist actions for drivers without the necessary business licenses. 

A company such as LicenseLogix offers streamlined solutions for both the ride sharing companies and for prospective drivers to get licensed and stay licensed. Moreover, the work of a professional licensing firm ultimately benefits the customers of ride sharing companies as well. All stakeholders have an interest in full license compliance. 

Of particular relevance to both ride sharing companies and consumers using these applications is LicenseLogix’s Vendor Verification Plus service, a comprehensive platform through which clients maintain up-to-date assurance that their vendors are compliant with relevant licensing requirements.  Vendor Verification Plus allows companies like Uber and Lyft, who work with thousands of independent contractors or other third parties, to seamlessly validate the business licenses of those third parties, leveraging LicenseLogix’s internal database of nationwide licensing requirements and its proprietary technology to manage data transmission and verification results.  Without such a program, companies needlessly stake their reputations on the compliance of others.  A transparent, integrated solution exists in Vendor Verification Plus.

Another option for ride sharing companies as well as for prospective drivers is to engage a third party for proactive research into future jurisdictions.  LicenseLogix researches business licensing requirements in any new jurisdiction before a company does business there.  Clients of this service receive a comprehensive research packet that contains the forms, fees, and instructions for all relevant filings. 

If companies or drivers previously obtained business licenses but wish to confirm their business is fully compliant with all federal, state and local licensing requirements LicenseLogix offers an Assessment service which includes research, verification and identification of compliance gaps. LicenseLogix verifies that all existing business licenses are valid while identifying jurisdictions in which the companies, or the individual drivers, are not properly licensed.  The full compliance audit of the License Assessment service even identifies jurisdictions in which a license is no longer needed.  License Assessment is an efficient, affordable method of brand protection for ride sharing companies.  

Once the necessary business license requirements are identified, the License Filing service  obtains all necessary licenses, placing the burden of the application and jurisdiction communication in the hands of experts.  Furthermore, the Client License Information Service (CLiC) provides subscribers with a secure portal housing all license information, relevant documents, renewal due dates, and provides automatic license status updates by email.  CLiC clients can select for renewable licenses to be automatically renewed by LicenseLogix or they may choose to use CLiC to manage their own renewals. 

Receive a free consultation today and to learn more about all of the ways LicenseLogix can help you and your business!

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1 http://www.reviewjournal.com/business/city-requires-business-licensing-fees-ride-hailing-companies
2 http://www.wweek.com/portland/blog-preview-33119-uber-is-making-its-drivers-register-with-the-city-of-portland-by-tomorrow-at-noon.html
3 http://wiat.com/2015/12/23/uber-drivers-can-apply-for-business-licenses-in-birmingham-as-early-as-monday/
4 http://www.tuscaloosanews.com/article/20140917/NEWS/140919632
5 http://www.kmov.com/story/31018250/montgomery-city-council-tables-vote-on-uber-business-license
6 http://www.wtvm.com/story/31045014/fox10-investigation-uber-pulls-out-of-gulf-shores-and-orange-beach

 
 Article by Kelly DiBattista, Research Analyst at LicenseLogix