Lyft works out operations issues with state regulators 

Taxi companies say ride-sharing companies like Lyft, which uses a smartphone app to match riders and drivers, skirt regulations and cut into business. - COURTESY PHOTO
  • Courtesy Photo
  • Taxi companies say ride-sharing companies like Lyft, which uses a smartphone app to match riders and drivers, skirt regulations and cut into business.

Vehicles sporting pink mustaches could proliferate on the streets of San Francisco in coming months after a cease-and-desist order against a popular ride-sharing company was lifted.

Lyft, a startup that combines new media functions with taxi-like services, had been threatened with fines of $20,000 and ordered to halt its operations while the California Public Utilities Commission investigated the company’s practices. Lyft is known for outfitting members’ vehicles with bright-pink mustaches on the front.

On Wednesday, the CPUC announced an agreement with Lyft that would allow the company to legally operate while the state regulator crafted new rules for the burgeoning ride-sharing industry. The CPUC issued its cease-and-desist order against Lyft in October, though the business continued to operate.

As part of the agreement, Lyft will have to track its fare collection rates on a quarterly basis, take out $1 million in excess liability insurance, institute a zero-tolerance policy for alcohol and drug use, and comply with other state regulations.

Lyft founder John Zimmer said his business already complies with regulations in the agreement. He said the operating requirements are likely to be the template for the CPUC’s official rulemaking regulations — expected to be released later this year — on ride-sharing companies.

“The CPUC and Lyft have a lot in common,” Zimmer said. “We’re both supportive of innovation, as long as it’s responsible and safe.”

Launched last summer, there are now thousands of Lyft vehicles operating in San Francisco, according to Zimmer, who said the company is launching service in Los Angeles today.

San Francisco taxi drivers and companies have opposed the growing number of ride-sharing companies, which specialize in smartphone location applications and feature fares that are based on “suggested donations.” Taxi industry officials said those caveats allow companies like Lyft to skirt state regulations and take away business.

“This isn’t about holding on to some imagined monopoly,” said Athan Rebelos, general manager at DeSoto Cab.

“The history of the transportation industry is very complicated and there is an important science behind its regulation. We feel these companies are completely ignoring that aspect.”

Rebelos said once the CPUC enforces its official rules for ride-sharing, businesses will have to ditch their suggested-fare policies and implement standard rates.

While the CPUC gave the green light to Lyft, its cease-and-desist order remains for Sidecar and Uber. Margaret Ryan, a spokeswoman for Sidecar, said the company is still working with the CPUC on ride-sharing rules.

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Will Reisman

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