Taxi association threatens suit over app-based ride services 

click to enlarge rideshare businesses
  • Jeff Chiu/AP file photo
  • The California Public Utilities Commission recently approved stricter rules for rideshare businesses, but drivers and owners say they’re still working at a disadvantage.
Taxi drivers and owners angered by new state regulation of app-driven ride services could soon take legal action against their popular competitors.

At a private board meeting in Sacramento this morning, the Taxicab Paratransit Association of California will discuss filing a lawsuit against companies including Lyft, Sidecar and Uber, according to board member Hansu Kim. Its legal fund is already $500,000 strong.

“The legal option has to be looked at since we are now faced with unfair competition,” said Kim, president of San Francisco-based DeSoto Cab, which has a 170-taxi fleet. “I’m pretty sure there’s going to be a lawsuit, but it’s a question of when and how we’re going to go forth.”

The threat comes two weeks after the California Public Utilities Commission unanimously adopted rules requiring transportation networks to hold commercial liability insurance, perform criminal background checks and training programs for drivers, obtain licenses from the commission, institute a zero-tolerance policy on alcohol and drugs, and perform 19-point vehicle inspections.

Although requirements such as insurance were brought up to taxi industry standards, cabs remain disadvantaged, said association attorney Paul Marron.

“Political influence and infatuation with cellphone applications, a superficial analysis of the core public-safety and service issues, and a naive, excessive trust in the cellphone applications will decimate the livelihood of thousands of professional taxi drivers who play by the rules,” Marron said.

Lyft, Sidecar and Uber could not be reached for comment Wednesday.

The state commission’s influential ruling came as a victory for such companies but irritated taxi drivers who complain that the companies are not held to fare, fleet size or green requirements. “Once the CPUC determined that these new businesses were not really ride-sharing services and in fact are venture capital-backed, commercial vehicles for hire for profit, they should have applied the same rules,” Kim said.

The commission’s ruling essentially deregulates the industry, Marron said, which could lead to 10,000 such vehicles and drivers traveling longer for less and less money.

“Many cities had what the CPUC did and they all came back to a regulated system because of the public safety and consumer rip-off issues that occurred when you had deregulation,” he said.

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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