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Colorado gave ridesharing startups like UberX and Lyft the green light Tuesday as Governor John Hickenlooper signed into law a bill spelling out rules by which they must operate. With the Transportation Network Company Act, Colorado becomes the first state to welcome ridesharing in law.

“Together we have found a way to authorize and regulate transportation network companies, balancing openness to new business modalities with the need for limited safeguards,” Hickenlooper said in a statement about the bill.

Hickenlooper, a Democrat, praised job creation and innovation in his state, while arguing the bill only lightly regulates ridesharing companies. The law includes background checks for drivers using publicly available data while also holding ride-share drivers to the minimal insurance standards for non-commercial operators. He noted the possibility that these standards might not be sufficient, and he asked state agencies to monitor progress and report back.

Hickenlooper also called on the state’s Public Utilities Commission to reevaluate the “regulatory burden” it currently puts on taxi and limousine services.

“Consumer protection is a worthy goal that we endorse, but rules designed to protect consumers should not burden business with unnecessary red tape or stifle competition by creating barriers to entry,” he said in the statement.

California offered similar regulation in 2013, but it was introduced through its Public Utilities Commission, not its legislature.

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