The so-called sharing economy rolled into Missouri in 2014, but its progress was largely impeded by regulatory roadblocks.
After initial excitement over their arrival, San Francisco-based ride-sharing services Lyft and Uber, which both use smartphone applications to connect riders to drivers, experienced licensing and permitting problems as they tried to expand into St. Louis, Kansas City and Columbia. Cab companies argued that, unlike taxi drivers, Lyft and Uber drivers lack the training, insurance coverage and background checks needed to safely transport people for profit.
Read more: Check out the rest of Missouri Business Alert’s Stories of the Year for 2014.
Lyft launched in St. Louis and Kansas City in April, but legal action against the service followed almost immediately. On April 21, a judge issued a temporary restraining order against Lyft in St. Louis, effectively shutting the service down there just three days after its launch. In June, the order was extended. Lyft appealed the ruling, but in September the Missouri Supreme Court decided not to hear the company’s case. Lyft has a court date with the St. Louis Metropolitan Taxicab Commission, which filed the suit, in August 2015.
Lyft ran into obstacles in Kansas City as well, raising the ire of Mayor Sly James, who criticized the company for failing to work with the city. Kansas City filed for a temporary restraining order against Lyft, and the case moved to federal court, where in July a judge denied the city’s request. In late October, Lyft agreed to temporarily suspend Kansas City operations, and earlier this month the company and city jointly moved to extend a stay in litigation until February.
Uber encountered initial difficulties charging for rides in Missouri. The company offered free rides in Kansas City starting in May, but by June UberX, the company’s peer-to-peer service, was operating legally in the city.
After months of legal maneuvering in St. Louis, Uber Black, the company’s luxury car service, received regulatory approval in October.
Uber started offering free rides in Columbia in October, and the city was close to finalizing rules regulating ride-sharing services in November. In December that proposal was tabled, though, and Uber was banned in Columbia until at least February.
It wasn’t just Missouri’s local governments or regulatory bodies that challenged the car services. Earlier this month, U.S. Sen. Claire McCaskill of Missouri sent letters to the CEOs of Lyft and Uber questioning the companies about their data-security and privacy-protection policies.