Audit Faults Mass. Regulators For Lack Of Rideshare Driver Oversight

Photo: Getty Images

BOSTON (State House News Service) — State regulators failed to perform some of their required oversight of Uber and Lyft during a nearly two-year period, raising questions about whether all drivers who transported Massachusetts passengers in that span were eligible to do so, according to new audit findings.

Voicing concerns that Uber and Lyft were allowed to operate under "much looser standards" than state law mandates, Auditor Suzanne Bump's office concluded on Tuesday that the agency tasked with regulating transportation network companies fell short on its background check and complaint resolution duties while the audit was underway between Oct. 1, 2017 and Aug. 31, 2019.

Bump's audit, which drew criticism and disagreement from the Baker administration agency it examined, could reignite scrutiny on the pair of gig economy giants that play a ubiquitous role in the state's transportation constellation. Transportation network companies provided 91.1 million rides in 2019, and Bump's office said Uber and Lyft accounted for 99 percent of trips during the audit period.

The audit recommended the TNC Division of the Department of Public Utilities add new written policies and procedures to ensure that Uber and Lyft are properly certifying drivers, taking action against those who lost permission to use the platforms, and reporting complaints in a timely manner.

"The division was created by the Legislature to regulate this emerging industry and was directed to create regulations and to hold the (companies) accountable for the safety of the public. Instead, even after it adopted its regulations, the division allowed the (companies) to operate under much looser standards for a significant period of time and failed to conduct proper oversight," Bump said in a statement she released alongside the audit. "Additionally, while the division is now acting in accordance with its regulations, the audit points out several areas of deficiency."

The TNC Division, which was the subject of Bump's audit, objected to the audit findings, arguing that the report reached "incorrect assessments" by conflating different requirements in place across two different regulatory periods.

Craig Gilvarg, a spokesperson for the Executive Office of Energy and Environmental Affairs that houses the DPU, said the state has on its books "the most stringent background check requirements for rideshare drivers in the United States."

State regulations require every transportation network company to review every applicant's criminal and driving history and to conduct a national background check for every driver at least twice a year.

DPU also has a program in place to monitor criminal records for drivers in real time, which officials say allows regulators to notice when a ride-hailing driver is arraigned on a criminal charge rather than wait to detect the offense during a background check.

Bump's team flagged several issues with the use of background checks on prospective drivers during the audit, which covered a period shortly after Massachusetts implemented new regulations on the app-based rides industry.

During that span, Bump's office said, the DPU division performed only one of the seven required quarterly audits of national background record check information that Uber and Lyft maintain. That gap means the office in charge of regulating Uber and Lyft "cannot be certain that all the TNCs' rideshare drivers are qualified to work for them," auditors wrote.

"Delays in quarterly audits could allow unsuitable drivers to provide rideshare services, increasing risks to riders," they said.

The quarterly audit threshold was a point of contention between Bump and DPU officials, who wrote in their response that they believe the requirement did not kick in until final regulations took effect on Feb. 13, 2019.

While the audit was underway, DPU wrote, "only one quarterly audit was required" and was conducted in the summer of 2019. Officials added they have "conducted the required audits every quarter since then."

"The findings in the State Auditor's report are based on an evaluation of activities that took place in 2017 and 2018, erroneously evaluating those activities based on regulations and permits that were not applicable until February 2019," Gilvarg said. "The TNC Division has faithfully enforced those regulations and permits for the past two and a half years, and will continue to prioritize public safety, maintain a rigorous driver eligibility standard, and perform broad oversight to ensure the safety and security of all TNC riders in the Commonwealth."

Auditors sampled 53 driver applications submitted to TNCs during the audit period and found two instances in which the individuals passed company national background record checks despite criminal or driving histories that "should have precluded them" from working on the platforms. Neither of those drivers cleared state review, so they ultimately did not provide any rides to passengers.

The auditor's office also found the companies did not always perform six-month national background record checks for their drivers -- a conclusion state regulators called "not correct" -- and that the DPU did not conduct sufficient oversight to ensure transportation network companies denied ineligible drivers from working on their platforms.

Complaints posed another red flag for Bump's team, which determined that DPU only began to receive required monthly complaint reports from the companies starting in January 2019. Some of those complaints "were deficient and did not contain information on actions TNCs had taken to resolve the complaints," the audit found.

DPU officials again argued that the monthly complaint requirement did not begin until final regulations took effect in February 2019.

"The majority of these complaints relate to payment issues, account problems, and pick-up/dropoff locations," DPU wrote. "The Division intends to pursue a stakeholder consultation process to determine if it would be helpful to establish guidelines to govern the required monthly complaint reports. The Division will use that process to determine whether any changes to the regulation requiring these reports are appropriate."

Gov. Charlie Baker's push to strengthen safety regulations on ride-hailing companies and collect more granular data about the rides they offer remains stalled in the Legislature, which allowed a bill he filed to die without action last session and has not touched the latest version (S 2436) since sending it to the Transportation Committee in April.

Neither Uber nor Lyft responded to a News Service request for comment on the audit's findings.

Written by Chris Lisinski, SHNS

Follow WBZ NewsRadio: Facebook | Twitter | Instagram | iHeartmedia App

Sponsored Content

Sponsored Content