Updated: August 6, 2014 at 1:01 pm
RICHMOND, Va. (AP) — Virginia is allowing ride-sharing companies Uber and Lyft to operate under a temporary agreement between the companies and the state, officials said Wednesday.
The move follows letters from state officials in June telling the companies to cease its operations in Virginia because they didn't have the proper licenses.
Ride-sharing companies use smartphone apps to dispatch drivers who use their personal vehicles to give people rides. The drivers then share the fares they collect with the companies.
Gov. Terry McAuliffe and Attorney General Mark Herring said the agreement will help keep passengers safe, promote a level playing field for transportation providers and bring the companies into compliance with Virginia law.
"These 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," Herring said in a statement. "Because of this cooperation, Virginians are going to have more transportation options that are safer, more transparent, and appropriately regulated."
Representatives for both companies applauded the agreement that they say maintains the highest level of public safety and expands transportation options.
The state Department of Motor Vehicles has granted the companies immediate operating authority but they must meet various terms, including conducting background checks for drivers, documenting their rates and meeting rigorous insurance requirements. Officials can revoke the temporary operating authority if either company fails to comply with any of the terms.
The DMV also is leading a study at the request of state lawmakers to develop a long-term legislative solution to addresses services provided by companies like Uber and Lyft. The study is scheduled to be completed in time for the 2015 legislative session. Officials say the temporary authority agreement can serve as a foundation for potential legislation and also will provide data on company operations as legislation is crafted.