Gov. Sam Brownback vetoed a bill Monday that would have increased regulations on ride-hailing companies like Uber, a decision that could face an override vote when the Legislature returns from its annual recess April 29.
In a statement, the governor said the bill, which would have required state background checks and broader insurance coverage for drivers for ride-hailing companies, was "premature" and might stifle innovation in the state.
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"This will allow companies like Uber to continue and expand operations in Kansas, where they otherwise would not be able to do so," Brownback said.
Uber connects drivers to riders through a mobile app and now has about 700 subcontracted drivers operating in Kansas after entering the state in 2014, but had said it would cease operations in the state if the governor signed the bill into law.
The company applauded Brownback's veto, saying in a statement the governor "demonstrated a deep understanding for how innovative businesses, such as Uber, can be a strong economic engine for communities while providing more choices to consumers throughout the state."
Republican Rep. Scott Schwab from Olathe, one of the chief negotiators for the final version of the bill, accused the governor of caving to pressure from the company, which has expanded rapidly since 2009 from a Silicon Valley startup to a multinational company valued at more than $40 billion.
"He's just helping them out or is succumbing to threats by them — either way it doesn't make him look like a strong leader right now," Schwab said.
The bill passed the Legislature with large majorities — the Senate approved it 35-2, while the House's vote was 107-16 — and Schwab said he will seek to override the veto. That would require 27 votes in the Senate and 84 in the House, although many legislators may be reluctant to cross the governor over the issue.
Senate President Susan Wagle, a Republican from Wichita, said in a statement that Uber's entry to Kansas has had a positive impact on the market, but the insurance requirements in the bill were necessary and Uber's negotiating tactics over the bill alienated lawmakers.
"Uber chose not to work with those their product will ultimately impact, and resisted compromise throughout the legislative process," Wagle said.
Schwab said the company got "90 percent of what it wanted" in the bill but continued to fiercely oppose it both through direct lobbying and other methods. Several legislators expressed frustration after Uber urged its customers to email lawmakers on the issue and so many did so that the Legislature's email server was temporarily inoperable.
When lawmakers return later this month they will begin difficult talks over a mix of tax increases and budget cuts needed to close shortfalls of about $400 million for the fiscal year beginning July 1.
"The governor needs friends right now," Schwab said, but through actions like the veto he "is making it harder and harder for people to work with him."