California Passes New Rideshare Regulations (Update)

Just as Uber flexes its political muscle on Capitol Hill, hiring a well-connected team of consultants and lobbyists to shepherd it through regulatory roadblocks, California regulators are trying to clamp down on the San Francisco company and its various imitators.

As of today, California will be the first state to implement official rules for rideshare enterprises -- rechristened Transportation Network Companies, since most of them don't actually involve sharing. The California Public Utilities Commission introduced these rules back in July, but it allowed for two months of public comment before approving them.

And despite spirited challenges from cab companies, disability rights activists, and members of the San Francisco Municipal Transit Agency, it appears most of the July proposals will carry over to law unchanged. If anything, the new rules will make Lyft and SideCar look more like their competitor Uber, by requiring all drivers to obtain a license to operate in the state of California.

Other stipulations include criminal background checks, a zero-tolerance policy for drugs and alcohol, compulsory driver training program, and 19-point car inspections that seem to be more rigorous than the ones currently give by start-up employees.

In press materials the CPUC also tried to elucidate its requirements for commercial rideshare carriers, which became a hot-button issue during the debate. Under the current rules, rideshare startups get to keep their million-dollar per-incident excess liability policies, which are set to kick in whether or not a driver's personal insurance allows for commercial use of vehicle.

Although SFMTA director Ed Reiskin argues in CPUC filings that such policies don't exist, representatives of the Insurance Information Network say that insurance companies aren't averse to creating new forms of coverage to meet consumer demand. Given that thousands of San Franciscans already use transportation networks every day, such demand isn't hypothetical.

Update, 5:17 p.m.: A spokesman from the CPUC wrote in to say that these new rules strengthened the insurance provisions for rideshare start-ups, and that they addressed disability access issues "more directly" than the preliminary version.

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Taxis like other forms of transit should be in the hands of local authorities (like the MTA, not the PUC) who know what they are doing and have some sensitivity to the transportation needs of the region. Taxis should be part of the transit infrastructure, alongside buses, BART, etc.

The real danger of this ruling is that it allows for an unlimited number of pseudo-taxis loosely regulated under a state-level authority (which has already shown its incompetence at regulating limousines). This will add to traffic and congestion, and compete with public transit, instead of playing a supporting role.

Bad decision, PUC -- more evidence that the PUC does not really understand or perhaps care much about local transportation issues and infrastructure.

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