CPUC sets regulations and rules for ride services 

click to enlarge Lyft
  • Jeff Chiu/AP file photo
  • Lyft, which marks participating cars with pink mustaches, hailed the CPUC’s ruling as “a large step forward.”
A local debate charged with emotions and name-calling and centered on app-based ride services crossed a pivotal mark Thursday when the California Public Utilities Commission adopted regulations for the “transportation network companies” newly subject to its jurisdiction.

The unanimous vote came two weeks after commissioners held off on a decision, citing insurance policy concerns.

Five revisions later, the new rules require transportation network companies such as Lyft, Sidecar and Uber to hold commercial liability insurance with a $1 million minimum in per-incident coverage; obtain licenses from the commission; perform criminal background checks and training programs for drivers; institute a zero-tolerance policy on alcohol and drugs; and perform 19-point vehicle inspections.

“The rules we created today allow transportation network companies to compete with more traditional forms of transportation, and for both drivers and consumers to have greater choice within the transportation industry,” said commission President Michael Peevey, a longtime proponent.

Amid the claps and cheers of a couple of hundred people wearing “I support ridesharing” stickers, Lyft co-founder John Zimmer lauded the commission’s action on the unprecedented regulations and called it “a large step forward.”

“It demonstrates that California takes the lead. It started with companies like Lyft in San Francisco and now you have the first historic framework for safe and legal operation and growth of these services,” said Zimmer, adding that his company already meets the requirements. Lyft also launched in Denver after the CPUC vote.

Sidecar co-founder and CEO Sunil Paul said he’s confident his company will meet the safety inspection and consumer age minimum of 21 within 45 days.

“I’m thrilled and pleased because it followed the standards that we pioneered,” said Paul, noting that Sidecar also began new service Thursday in Oakland, Long Beach and San Diego.

Uber, which started with licensed taxi drivers and later added drivers using private vehicles, has been less vocal on the issue and could not be reached for comment Thursday.

Taxi industry representatives were anything but thrilled, yet were relieved that the new ride services are now subject to the same commercial insurance requirement, which is more stringent than policies for limousines.

“There’s a dilemma they are going to face,” said Hansu Kim, president of DeSoto Cab Co., which has a 170-taxi fleet in The City. “Right now, no insurance company will insure commercially a private car. It’s going to change their financial model, now that they realize they have to meet similar requirements to taxi cabs.”

However, the regulations still leave the ride services off the hook in serving disabled people, having green vehicles and providing workers’ compensation, said Kim, who also is a Taxicab Paratransit Association of California board member.

The commercial insurance requirement should be able to level the playing field, but enough damage has already been done to San Francisco’s troubled cab industry, said Ben Valis, a Veteran’s Cab driver for a decade.

“The fact that they’ve been legitimized on an unlevel playing field makes the whole thing unfair,” the 32-year-old said. “I think today’s decision is going to kill the cab industry. I don’t see a future in the cab industry. I’ll try bartending or something.”

In 45 days, the commission will post a transportation network company application on its website and services must file within 60 days. A workshop for stakeholders to discuss the impacts will take place in a year.

About The Author

Jessica Kwong

Jessica Kwong

Jessica Kwong covers transportation, housing, and ethnic communities, among other topics, for the San Francisco Examiner. She covered City Hall as a fellow for the San Francisco Chronicle, night cops and courts for the San Antonio Express-News, general news for Spanish-language newspapers La Opinión and El Mensajero,... more
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