Arizona Gov. Doug Ducey on Thursday said he stopped state regulators from citing drivers for rideshare companies such as Uber and Lyft because the policy wasn't working and was hampering job creation.
Ducey said the enforcement by the Weights and Measures department was stifling a new industry that creates jobs.
"We believe that companies like Uber and Lyft are innovative, entrepreneurial technologies," Ducey told reporters. "And I want to see those types of companies thrive. And they also create jobs."
New Weights and Measures Director Andy Tobin ordered the ticketing stopped Wednesday and will ask the state's lawyers to drop citations already issued.
The move on the eve of the Super Bowl means drivers can pick up passengers without fear of being nabbed for not having commercial insurance or licenses. It comes as the Legislature works on a deal allowing the new and growing ridesharing industry to operate legally while protecting consumers.
The Legislature passed a bill last year that would have exempted the new app-based transportation companies from insurance regulations imposed on traditional taxi and livery companies. It was vetoed by then-Gov. Jan Brewer, who said it failed to protect consumers.
Traditional taxi and livery companies oppose the current business model for the new transportation services. They argue that drivers are only covered by company insurance when they're on the way to pick up a passenger who requests a ride using an online app or driving that passenger to their destination.
That leaves the public vulnerable because there are times when the driver isn't covered by the company's insurance, said David Leibowitz, who represents cab company Total Transit. For instance, a driver who picks up a fare outside the app isn't covered, he said.
Total Transit operates Discount Cab in Phoenix and has its own app. It's 200 rideshare drivers are covered by commercial insurance.
Rep. Karen Fann, R-Prescott, has been working on legislation that would level the playing field for both taxi companies and rideshare companies.
She's been meeting with rideshare and taxi companies, Weights and Measures staff and insurance companies and expects draft legislation to be ready next week. The complicated legislation is designed to ensure that rideshare companies and taxi operators are on a level playing field.
"The taxicabs' biggest beef is they just want to make sure that everyone is treated quasi-fairly," Fann said. "That one side isn't being regulated more than the other side, or being required to provide more insurance than the other side."
The biggest issue is insurance coverage and consumer safety.
"We always want to see safety first, and that's why I said we're going to put the onus on the insurance industry to provide a product that I think can really fill the need of what's necessary," Ducey said.
The companies, which call themselves "ridesharing services," continued to operate after last year's veto. Weights and Measures had issued nearly 100 citations by November to drivers who did not have proper commercial licenses or insurance.
San Francisco-based Uber's Arizona general manager, Steve Thompson, said in a statement late Wednesday that the company was "thrilled" with Ducey's decision.
"We look forward to working with the governor and state leaders to craft smart regulations that embrace innovation, support entrepreneurship, and put consumer choice and safety first," Thompson said.
Last year's fight over the so-called Uber bill was one of the bigger issues of contention within the state Legislature. Democrats and Republicans were split within their own parties. Proponents of the bill said government should stay out of the way and let new companies like Uber innovate, while opponents said the lack of regulations pose a public safety threat.