Ridesharing innovation is in trouble if well-intended Sami’s Law passes

A proposed law that is sailing through Congress with little media attention and seemingly no opposition may change ride-sharing as we know it — and, ultimately, not for the better. Sami’s Law, passed by voice vote in the House of Representatives last month, would mandate a number of safety requirements for ride-sharing companies such as Uber and Lyft and create a federal council to suggest future regulatory actions.

Inspired by the tragic murder of a college student, the motives behind the bill are pure. In March 2019, college student Samantha Josephson stepped into the car of an Uber impersonator in Columbia, South Carolina. Her body was found in the woods 65 miles away. No words can properly express the evil and senselessness of her death. In the wake of the tragedy, Samantha’s family has been advocating for enhanced safety measures on ride-sharing apps and has been joined in support by both Uber and Lyft.

However, the unintended consequences of the proposed legislation could create a headache for drivers and riders alike for years to come.

There is no doubt that ride-sharing companies have a responsibility to ensure the safety of their customers’ rides as best they can, and both companies have taken strong steps over the years to improve their already tight systems. Uber, for instance, famously has a $1 million insurance policy, requires criminal background checks for drivers, removes drivers for poor ratings, and has a feature for riders to report an issue during a trip.

In January, Uber also rolled out a new opt-in feature that gives riders a four-digit PIN that their driver has to confirm before starting the trip. Sami’s Law would mandate that all ride-sharing companies deploy such a verification system and if enacted would make what was previously an opt-in feature the default for all riders.

While such verification features are a positive step forward, Sami’s Law seems unnecessary since they are already being adopted voluntarily. And while the nudging shift from opting in to opting out may not do much more damage than irking a few confused customers, the enforcement mechanisms embedded in the bill raise some red flags for heavy federal regulation in the future.

Sami’s Law would establish a 15-member council in the Department of Transportation to “develop and present best practices or recommendations … regarding performance standards the Secretary may adopt regarding any successor technology-based system.” In plain English, the council will be proposing regulations. As we know too well in Washington, an entity whose existence depends on regulating is going to regulate. While the council technically has a potential sunset date after 12 years (a generous amount of time already), the Secretary of Transportation can will it into permanent existence with the stroke of a pen.

This scheme spells trouble ahead for ride-sharing companies that, until now, have largely operated free from federal regulations. Transportation network companies are already well-regulated on the state and local level — which has caused enough headaches for the companies. In the past, several cities have temporarily banned the services, such as Austin, Texas. Today, Uber and Lyft are fighting with the state of California, where a recent law (AB-5) would require all ride-share drivers to be classified as employees, removing the flexibility of the job and increasing ride prices for customers.

As if the state and local regulatory assault isn’t bad enough, Sami’s Law could soon be sending more red tape from Washington, driving up the costs of doing business for ride-sharing companies. Soon enough, the price of a ride-share could be as expensive as a taxi — killing the innovation and affordability that allowed companies like Uber and Lyft to flourish in the first place.

The Senate should seriously reconsider Sami’s Law as it is written. The long-term implications of the bill are getting almost no discussion or media attention aside from a handful of news articles. There needs to be a serious debate before another great industry gets regulated into stagnation.

Casey Given (@CaseyJGiven) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the executive director of Young Voices.