A law set to take effect this summer will ease marketplace restrictions for new taxi companies in hopes of creating more ride options for a Denver metro area that is booming in population.

But some feel the measure doesn’t go far enough, while others worry it will lead to greater congestion on city streets.Gov. John Hickenlooper take the former position. He neither signed nor vetoed House Bill 1316, calling the legislation “a piecemeal approach” to a larger regulatory problem within the taxi industry.

Although the governor didn’t sign the legislation, he sent the bill to the secretary of state’s office, where it will become law without his signature. The law takes effect Aug. 5.

The law does away with a requirement that a new taxi business must first establish that there is a public need for their service in order to obtain application approval from the Public Utilities Commission, the agency that regulates cab companies.

Beginning in August, the PUC can only consider whether a cab company is operationally and financially fit to provide service.

Rep. Steve Lebsock, D-Thornton, a bill sponsor, said the legislation will help upstart cab companies compete in a growing Denver-area transportation market.

“The bill is important for citizens and customers because competition is a good thing,” he said. “And we are going to have more jobs created because of this bill and the taxi service is going to be better because of increased competition.”

Hickenlooper supports removing these market barriers, as he explained in a June 5 letter to the House of Representatives.

“If entrepreneurial taxi companies have proven financial and operational fitness, then it is not the role of government to stand in their way to compete in this large and competitive market, particularly if these companies choose to abide by the tighter regulatory structures placed on taxicab companies,” the governor wrote.

But Hickenlooper said the bill “falls short of the comprehensive review needed of both existing taxicab regulations and the process of entering the marketplace.”

The governor pointed to concerns from taxi companies that were aired during debate of 2014’s Senate Bill 125, which created first-of-its kind regulations for transportation network companies such as Uber and Lyft. Those businesses allow customers to catch rides using a smartphone application.

Last year’s bill put in place insurance and safety requirements and rules for obtaining permits for drivers who wish to operate a ride-sharing vehicle.

While lawmakers were learning about transportation network companies, they also heard complaints from traditional taxi companies who feel they are over-regulated.

Cab drivers argued it’s unfair that the new regulations put in place for ride-sharing services are not as strict as those by which taxi companies must abide. Those regulations — such as insurance requirements and vehicle-safety inspection rules that aren’t as strict as the ones in place for transportation network companies — make it more difficult for cab companies to compete in the new transportation marketplace.

When he signed last year’s bill, Hickenlooper stressed the need for a comprehensive review of taxi service marketplace regulations.

“Unfortunately, this bill is not a comprehensive (review),” the governor’s letter reads. “Rather, it is a piecemeal approach that, while lowering one barrier to entry, does not address the issue of regulatory imbalances and government-enforced market inefficiencies.”

Representatives from large taxi companies like Yellow Cab argued during the legislative process that the bill does not address any of the real regulatory issues that taxi drivers face. However, Yellow Cab had other motives in opposing the bill because of its potential for increased competition.

Lebsock said his bill is “a step in the right direction.”

“I am not opposed to a more comprehensive approach next year and taking a look at existing regulations in the PUC, while also making sure that safety regulations and important things the PUC does to make the public safe remains important,” Lebsock said. “But we need to look a the red tape and see if we can make it easier for the taxi cab service to work as well.

Lebsock’s bill sailed through the Legislature with bipartisan sponsorship and support.

But Sen. Pat Steadman, D-Denver, who was one of a handful of lawmakers to vote against the legislation, argues that the law will have unintended consequences.

“It’s not good for Downtown Denver,” Steadman said. “There’s already a fair amount of competition in the taxi market.”

Steadman worries that by allowing more taxis in the marketplace, along with drivers from Uber and Lyft, things could get hairy on already-congested downtown streets.

“There will be more competitive pressures on cab drivers trying to make a living,” Steadman said. “And the congestion of cab drivers will cause over-saturation, making things worse.”

— Twitter: @VicVela1