Virginia announced Wednesday that it would grant temporary operating authority to ridesharing companies Uber and Lyft, allowing them to operate legally in the commonwealth.

In response to concerns about insurance coverage and passenger safety, Virginia sent cease-and-desist letters to Uber and Lyft on June 5, which both companies initially vowed to ignore. (RELATED: Uber, Lyft Defiant in Face of Los Angeles Ban)

The cease-and-desist orders were withdrawn as part of an agreement that “will help ensure the safety of passengers, bring the companies into compliance with Virginia law, provide transparency into their operations, and promote a level playing field for transportation providers,” according to a statement on Virginia Gov. Terry McAuliffe’s website. (RELATED: After Virginia’s Uber Ousting, Is DC More Free Than the Old Dominion)

“In order for Virginia to remain economically competitive,” McAuliffe said, “it is important that we welcome innovative companies like Uber and Lyft and provide them with the resources they need to safely and effectively operate in the Commonwealth.”

Attorney General Mark Herring portrayed the agreement as an equitable compromise, saying ridesharing companies “offer services that Virginians want, but it just wasn’t acceptable for them to operate without complying with regulations or other measures to help ensure the safety of passengers and motorists.”

Spokesmen for Uber and Lyft celebrated the agreement, saying it would ensure the safety of consumers while still embracing innovation. Dave Estrada, VP of Communication for Lyft, said the agreement “maintains the highest level of public safety while expanding consumer choice.”

Representatives for the transportation industry, however, do not believe the agreement adequately addresses their concerns. (RELATED: Houston Sting Catches Uber Drivers Accepting Street Hails)

The Taxicab, Limousine, and Paratransit Association (TLPA), an industry trade group, sponsors an initiative called “Who’s Driving You”, which claims on its website that ridesharing companies fail to perform sufficiently rigorous background checks on their drivers, and that the “surge pricing” they employ is equivalent to “price gouging”.

Dave Sutton, a spokesman for Who’s Driving You, released a statement saying, “it is well known that Uber and Lyft have unsafe insurance and background checks,” adding that, “despite these glaring safety risks, Virginia is allowing these companies to provide taxicab services to citizens. Buyer beware.”


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