By John Healey, October 23, 2013
William Rouse, general manager of Los Angeles Yellow Cab, takes
questions from the media in June as hundreds of L.A.-area taxi drivers
circle City Hall in their cabs to protest app-based car services.
The state Public Utilities Commission issued rules last month to govern how Uber,
Lyft and other Web-based transportation services operate in California.
But the PUC's action didn't satisfy the taxi industry and its allies,
including Los Angeles City Councilman Paul Koretz, who don't want the
state to take the regulatory wheel.
So Koretz is trotting out
an argument familiar to anyone who's sought to block a competitor from
entering the market: He contends that the PUC violated the California
Environmental Quality Act.
That's not Koretz's sole argument against the PUC's new regulations,
mind you. In an interview Tuesday, he said that the rules were
inadequate in many ways to protect the public against fraudulent and
unsafe ride-sharing services. And even if the rules were adequate, he
argues that the PUC doesn't have the resources to enforce them. He's
also worried that the new services won't serve the disabled or
low-income areas in the city, which taxi companies are required to do.
"It just seems like almost all negative for the consumer," he said.
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In the motion
that's pending before the City Council, Koretz also argues that the new
services compete unfairly with cab companies because they "operate
outside the rules and regulations established for passenger carriers
such as taxis." And he contends that the PUC's decision violates the
state law that gives cities the right to "regulate the supply of
vehicles in the taxicab market."
The problem with these arguments, though, is that Uber, Lyft and
other Web-based services aren't taxicab companies. They're technically
"charter party carriers" because they offer rides only by
pre-arrangement -- in their case, by using a smartphone app to summon a
driver. And state law grants the PUC exclusive jurisdiction over charter
The CEQA argument, on the other hand, challenges the legitimacy of
the PUC's rule-making. Koretz's motion contends that the commission
didn't "consider the wider environmental, economic and road safety
impacts through the addition of thousands of for-hire vehicles that
could increase congestion and pollution." It adds: "These environmental
impacts were not analyzed and no opportunity for public input was
provided, which violates the California Environmental Quality Act."
According to Tom Adams, a board member at the California League of
Conservation Voters and an expert on CEQA, the act comes into play
whenever an agency takes an action based on its discretion, as long as a
"fair argument" can be made that the action "may have a significant
effect on the environment." In that event, the agency has to prepare an
environmental impact report or issue a finding that the environment
won't be hurt by the action.
The PUC did neither. Instead, it determined that there was no need
for an environmental review at this point, according to Andrew Kotch, an
information officer at the commission. That's because "the number of
miles driven around will likely not increase because [the new services'
cars] only go to a customer upon request, unlike some cabs that roam the
streets," Kotch wrote in an email.
In other words, even if Uber, Lyft and company somehow draw
"thousands of for-hire vehicles" into the city, the PUC sees them as
substitutes for cabs, not additional cars. That makes sense intuitively;
it's unlikely that Angelenos will abandon trains, buses and sidewalks
in droves for a much more expensive alternative, even if that
alternative is more efficient than a cab. And by driving fewer miles
than the taxis they displace, the new services may actually reduce
In its order, the PUC teed up a CEQA review when it revisits the new
services and regulations through a series of workshops next year.
“Workshop topics will include, but not necessarily be limited to, a
consideration of safety, competition, innovation, accessibility,
congestion, the California Environmental Quality Act, and other
pollution related issues," the order states.
A party trying to force an agency to follow CEQA doesn't have to
prove that the environment will be significantly affected, but it can't
simply speculate that the agency's action would have such an effect.
"There must be some 'substantial' evidence," Adams wrote in an email.
"Typically that takes the form of an opinion from an expert, but it
could come from a study that has been published somewhere."