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Uber and Lyft can operate legally in Virginia—for now.

Gov. Terry McAuliffe announced today that the state has reached a temporary agreement with the ride-sharing companies to allow them to conduct business in the Commonwealth. In June, the Virginia Department of Motor Vehicles had issued cease-and-desist letters to the car services, writing that both firms were operating illegally and should halt all services immediately. It said it would penalize any driver found to be breaking the law.

But McAuliffe says the state has drafted a temporary legal framework that will ensure the safety of residents using the services and level the playing field between these companies and the taxicab industry. The state’s General Assembly requested that the DMV develop a long-term legislative solution to address Uber and Uber-like companies. This study is expected to be completed in time for the 2015 legislative session; the temporary agreement could serve as the framework for the more permanent legislation.

“In order for Virginia to remain economically competitive, 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,” McAuliffe said in a release.

Uber and Lyft can temporarily have authority to operate in Virginia, provided they meet certain conditions, including:

  • Extensive background checks of drivers, automatically disqualifying any candidate who has been convicted of a felony, fraud, sexual offense, or violent crime.
  • A review of driving history, disqualifying any applicant who has been convicted of three or more moving violations in the the last three years, DUI, underage drinking or other driving offenses.
  • Rigorous insurance requirements, including requiring drivers to maintain automobile liability insurance. The companies must also have an additional $1,000,000 of insurance coverage on behalf of all drivers from the time they accept a trip until the passenger leaves the vehicle. Liability insurance for drivers who are logged onto the companies’ software, but not actually providing services to a customer, is also required.
  • A zero-tolerance drug and alcohol policy.
  • Records for each driver on file, including his or her background check, sex offender check, Social Security number, driving record, and valid driver’s license. Documentation of the drivers must be available to DMV on request to investigate any complaints and must be available for periodic audits.
  • Street hails are prohibited.
  • The companies must pay any previously assessed civil penalties for non-compliance and drop any appeals. (Both companies have already done this.)

Sedan picture via Shutterstock