New Vermont Rules Regulate 'Gig Economy' Companies, Including Airbnb And Uber

Sep 4, 2018

As companies like Uber and Airbnb continue growing across Vermont, two new state laws to better regulate the "gig economy" are now in effect. 

During the special session in June, lawmakers passed a short-term rental law for people who rent their homes on platforms like Airbnb and HomeAway, as well as a ride-sharing law that regulates drivers who use their cars through Uber or Lyft.

Both went into effect on July 1.

Short-Term Rental Services

Adam Silver has been renting his third-floor Brattleboro apartment on Airnbnb for about three years.

He said it stays busy year-round, mostly on weekends, and that the added income helps out with his other part-time work: running a catering business and art gallery.

When lawmakers debated Vermont’s new short-term rental services law, there was talk of requiring a registration fee and increasing health and fire safety codes.

Ultimately the new law only requires that health department and fire safety numbers be posted, and that each host post a tax ID number on their web listing.

Silver received a notice recently from Airbnb explaining the new law, and he now has the information up on the refrigerator in his apartment.

“I’m pleased that the lawmakers saw that there is a difference between inns and hotels, and people having an Airbnb in their own home,” Silver said. “There should be somewhat different ways to regulate this, and so I think that was paid attention to as the lawmakers figured this out.”

Ride-Sharing Services

The Legislature also passed a ridesharing law this year to regulate companies like Uber and Lyft.

Vermont is one of the last states to pass a regulatory code for ride-sharing companies, and Vermont Commissioner of Financial Regulation Mike Pieciak said the new law comes as the companies are looking to expand their services across the state.

“One of the benefits of having a statewide jurisdiction is that, you know, these companies are operating in multiple places in the state,” said Pieciak. “So when they operate across the state, it’s helpful for them to have a statewide set of regulations.”

The new law sets up a statewide regulatory code for internet-based ride services, and it requires the companies to carry insurance for its drivers and perform background checks.

The change in how web-based ride-sharing companies are regulated does raise some questions about how towns and cities should oversee taxis and limo services.

Pieciak said the state law supersedes any local, internet-based ride-sharing ordinance, but the legislation directs his office to report on how the law might affect how other vehicle-for-hire companies are regulated.

“We’re conducting a study this summer to look at the various similarities and distinctions from this new piece of legislation and the municipal taxi laws of many of the towns and cities in Vermont," Pieciak said, "so we’ll have a better understanding of exactly where the differences and similarities lie."

The new law authorizes the commissioner of the Vermont Department of Motor Vehicles to inspect at least 25 drivers’ records every year for compliance, and it sets an administrative penalty of up to $500 for each violation.

Burlington Rep. Jean O’Sullivan, who sponsored the bill, said Uber didn’t want to pay for an insurance program — called "med pay"— which pays out $5,000 immediately after an accident, regardless of who’s at fault.

“We as a regulatory body have to look at how do we protect workers in this new environment,” said O’Sullivan. “These are people who are driving distracted by definition because they’re driving looking at an app. So that med pay piece was a big part of protecting workers and looking at the gig economy, and how do we look at workers in a new light.”

Back during legislative testimony, a lobbyist that represented Uber said if the med pay provision was included it "could jeopardize Uber’s continued operation in Vermont." However a spokeswoman for Uber said the company would comply and looks forward to increasing its business in Vermont.

And a spokeswoman for Lyft said the company was thrilled with the law and that it makes it easier for its drivers to work for the company across the state.