Proposed Charleston ordinance requires Uber drivers to purchase business licenses

People contact ride-hailing services, such as Uber, through an app on their smartphones.

Uber drivers will have to purchase a business license to work in the city, if Charleston City Council approves new rules to regulate transportation network companies.

Council earlier this month gave initial approval to a new transportation ordinance that will govern taxis and limousines, as well as the ride-hailing service Uber and other “transportation network companies” that use GPS-enabled apps to dispatch freelance drivers in personal vehicles. The group will take a final vote on the matter Tuesday.

Billy Guernier, Uber’s general manager, said company representatives for months worked with the city as it crafted the new ordinance. “But we can’t support the end product,” he said.

The sticking point is the business license requirement, he said. “We hit a dead end there.”

In most areas that have regulated Uber, he said, the transportation network company pays a fee to the city to operate. Essentially, he said, “the company takes on the burden for drivers.”

But City Councilman Bill Moody, chairman of the group’s Traffic and Transportation Committee, which wrote the ordinance, said Uber repeatedly has said its drivers are not employees. Instead they are independent contractors. As such, they must purchase a business license, Moody said.

“We have an (existing) ordinance that says if you do business in the city of Charleston, you’re going to have to have a business license,” Moody said. If Uber wants to exempt its drivers from the requirement, the company should make them employees, he said. “I don’t know why they think they’re so special.”

According to the city’s Revenue Collections Division, each Uber driver would have to purchase a license that costs $57.84 annually for the first $2,000 of income, and $3.40 for each additional $1,000 earned above that.

Guernier said the requirement would make it harder for the company to find drivers, and boost the cost for passengers.

He also said he thinks the city should hold off on passing the ordinance until the General Assembly passes state-level regulations that currently are in the works.

Jamey Goldin, chief counsel for the House Labor, Commerce and Industry Committee, said the House has passed a bill filed by Bill Sandifer, R-Oconee, Mike Forrester, R-Spartanburg, and Jackie Hayes, D-Dillon. The bill regulates driver background checks, vehicle checks and insurance requirements, he said. It also requires transportation network companies to obtain a permit to operate from the Office of Regulatory Staff. But it doesn’t require individual drivers to purchase business licenses.

The bill now is being considered in the Senate, Goldin said, and he expects it to pass this year.

The Senate, however, has amended the bill to include a provision that says that state rules pre-empt local rules.

Goldin said the House version doesn’t contain that provision because he thinks state law allows cities to regulate their streets and thoroughfares. He’s not yet sure which version the General Assembly ultimately will pass.

Reach Diane Knich at 937-5491 or on Twitter at @dianeknich.