CPUC Legalizes Ridesharing Companies With New Rules, Regulations

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The California Public Utilities Commission today unanimously approved implementing regulations for online-enabled rideshare services -- making California the first state to legalize transportation options such as Lyft and Sidecar.

The five commissioners gave the go-ahead at a meeting this morning in San Francisco after hearing public comment that included taxi drivers who oppose the ridesharing companies and other people who support the nascent industry.

The commission decided to regulate companies like Lyft, UberX and Sidecar, defined as Transportation Network Companies, which use online platforms to connect passengers to drivers who are using their own vehicles.

As approved, the CPUC will require the companies to be licensed by the commission, perform background checks on drivers, implement or strengthen a driver-training program, conduct car inspections and carry a $1 million-per-incident insurance policy for drivers using their own vehicles to transport passengers.

A zero-tolerance drug and alcohol policy will also be enforced among the total of 28 rules and regulations approved by the commission.

CPUC President Michael Peevey said at today's meeting that he supported the regulations to "ensure safety isn't compromised."

Peevey said the companies are part of a "rapidly growing sharing economy" and that the commission needs to keep drivers and passengers safe.

The CPUC, which regulates passenger carriers, will expand their purview to this "new path-breaking approach to transportation," Commissioner Mark Ferron said.

Ferron said the rules will promote safety yet foster the developing industry.

"We're the first commission to grant this authority on a statewide basis," he said.

Ferron said in recent months since the proposed regulations were introduced, he has met with taxi companies and drivers, who mostly oppose regulating the alternative transportation service.

"Taxicabs provide an extremely valuable service to communities," Ferron said.

"They are a unique and time-tested form of transportation."

He concluded, "We have room for both types of transportation providers."

Ferron called for a workshop to be held in one year to examine the effects of the transportation network companies, and for continual assessments of the service.

Commissioner Mike Florio said he thinks taxis and online-enabled ridesharing services can co-exist.

"We have folks who only use these services, other people who only use cabs and people have different preferences and different needs," Florio said.

"This will allow both to take place on a fair basis."

Commissioner Carla Peterman emphasized that the regulations are about safety.

"Overall I feel these new rules will improve safety," she said.

She advised consumers to get informed about transportation options and rideshare drivers "to be educated on what will happen in the event of an accident."

 

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