CALIFORNIA—The California Public Utilities Commission (CPUC) unanimously approved a plan on Thursday, September 19, that will regulate ride-sharing companies, becoming the first state to do so.
“The CPUC is at the forefront of leadership in crafting new safety based regulations for a rapidly emerging industry,” said CPUC President Michael Peevey. “The rules we created allow Transportation Network Companies to compete with more traditional forms of transportation and for both drivers and consumers to have greater choices within the transportation industry,” he added.
Ride-share companies, which will fall into the category of Transportation Network Companies as mentioned above by Peevey, allow users in need of a ride to connect with drivers via smartphone apps to get to their destination.
“Today we have a new transportation category—the first in 16 years!—and a new set of rules that will allow ride-share to flourish in California,” said Sunil Paul, CEO of Sidecar. “This new roadmap will pave the way for transportation innovation nationwide,” he added.
According to the plan, online-based companies like Lyft, Uber and Sidecar will need to meet certain requirements before seeking a permit to operate.
The regulations require companies to participate in driver training and criminal background checks as well as carry insurance equivalent to what is required of cab drivers and implement a zero-tolerance policy on drugs and alcohol. There are 28 rules in total.
Taxi and limo companies are opposed to the ride-sharing companies, claiming they undercut their businesses.
Rick Taylor, a spokesman for Los Angeles Yellow Cab, said in a statement that the state commission “decided to turn their backs on safe legal drivers.”
Regulators hope the rules will “strike the proper balance between safety and innovation.”
Vicki Curry, a spokeswoman for Mayor Eric Garcetti, said the decision on ride-sharing is good news.
“Mayor Garcetti wants to see ride-sharing become a fully-integrated part of L.A.’s transportation system,” Curry said in a statement.
Curry added that next steps are being assessed in regards to the taxi industry’s concerns about public safety.
Some City Council members are introducing motions to regulate the ride-share companies at the local level as well as resolutions to oppose state regulations of the services according to reports.
By Melissa Simon
