"It’s obviously clear for the last 12 months that TNCs and ride-sharing are here to stay," Pinckard said. "I think it’s safe for people to begin adopting those differences in their business models without fear of being regulated out of business."

The owners of C&H Taxi in Charleston, West Virginia, thought about letting drivers use their own cars back in the 1980s, when MTV and Pac-Man were cultural crazes and long before smartphones and apps were on the radar. There was only one problem -- it was illegal.

"We were never allowed to," said C&H owner Jeb Corey. "So when Uber started lobbying the legislature to offer their version of service here in West Virginia, it basically gave us the potential to do those things now."

Ride-sharing companies began their push in California in 2013, where the state’s Public Utilities Commission released the country’s first state-level regulations for the industry, using the term "transportation network companies" or "TNCs" to define the services as distinct from taxi and limousine companies.

In the years since, 43 states and Washington, D.C., have passed broad-based laws governing everything from permits and fees to background checks. The vast majority have used the TNC designation to define and regulate the companies’ activities, according to the Texas A&M Transportation Institute. 

Another five states -- Alabama, Hawaii, Louisiana, Minnesota and Washington -- have laws that only address insurance requirements. Only two states -- Oregon and Vermont -- stand between Uber and Lyft and the completion of an extraordinarily rapid shift in regulation across the country.

Lobbying States

The two companies spent a combined $14 million on state lobbying from 2012 to 2016, a figure that represents more than 75 percent of the money spent by the entire taxi industry over that period, according to the National Institute on Money in State Politics. In so doing, they have completely upended the traditional cab sector and driven many companies out of business. But they have also opened the door for more competitors.

Despite a year of scandals and lawsuits, Uber is still the world’s most valuable startup on paper at $70 billion. And with a planned  $1 billion investment this year led by Alphabet Inc., Lyft would be valued at $11 billion. Both companies still enjoy an important advantage over their competitors: scale. Uber and Lyft work the same in New York, Chicago and San Francisco as they do in small towns and cities around the nation. And now they are just about everywhere.

But by bringing sweeping changes to the regulatory environment, they made it even easier for competitors to enter the market. Now, cab companies from Phoenix to Pittsburgh are using the new TNC designation to create hybrid companies that can function like traditional cab companies and TNCs. The owners of these businesses contend that they enjoy some important advantages as well.