The ride-sharing proposal for such services as Lyft and Sidecar, in which drivers use their own cars, will go to the PUC.
http://www.latimes.com/business/la-fi-rideshare-puc-ruling-20130731,0,2414608.story
By Marc Lifsher and Salvador Rodrigues, July 30, 2013
An LAPD officer guides traffic around City Hall in downtown Los Angeles
as taxi drivers protest against the ride-share operators they say are
hurting the taxi industry's business.
SACRAMENTO — Ride-sharing companies that connect passengers to
drivers via smartphones should be allowed to continue operating in
California if they comply with basic safety rules, state regulators
proposed Tuesday.
The recommendation now goes to the five-member Public
Utilities Commission as early as its Sept. 5 meeting. Commissioners can
accept or deny the recommendations or offer alternatives for regulating
such increasingly popular ride-sharing companies as Lyft Inc., Sidecar
and
Uber Technologies Inc.
The three companies provide transportation for a fee or donation
, connecting paying passengers with drivers who use their own vehicles.
The proposed decision gives a
"greenlight " for ride-sharing in California and should set an example
for cities and states across the country to provide consumers with a new
way to get around, said Sunil Paul, Sidecar's chief executive and
co-founder.
"Today, we have a new roadmap for smartphone-enabled services like
Sidecar that we hope will set the stage for transportation innovation
nationwide," Paul said in a blog post Tuesday afternoon.
The proposal would be a victory for consumers if it becomes
regulatory law, said James E. Moore, director of the transportation
engineering program at USC's Viterbi School of Engineering. "It reduces
the barriers for entry into the market for transportation services and
that's going to provide consumers with more options," he said.
Under the proposal, the PUC would have jurisdiction over ride-sharing
under a new category of businesses called transportation network
companies. The agency would also issue licenses to the services.
A decision, once endorsed by the commissioners, is expected to
preempt efforts by California cities to oversee or even ban ride-sharing
under their authority to license taxi cab firms.
Regulators would require drivers to undergo criminal background
checks, receive driver training, follow a zero-tolerance policy on drugs
and alcohol and carry insurance policies with a minimum of $1 million
in liability coverage.
In its ride-sharing case, the generally ponderous PUC bureaucracy has
moved with unusual speed to deal with a new industry. Controversy over
ride-sharing comes as local governments seek to encourage new business
models. Meanwhile, the highly regulated taxi industry is howling at the
prospect of losing fares to new and typically cheaper competitors.
If the decision goes through as it is, it will hurt the taxi and
limousine transportation industry, said William Rouse, general manager
of Los Angeles Yellow Cab.
"We have a city-mandated price that we have to set," said Rouse, who
also is president of the Taxicab, Limousine & Paratransit Assn.
"They're undercutting our price by providing essentially the same
service that we provide, so of course it's going to affect us."
He said regulations should be changed to level the playing field for
cabbies. He also said that if the decision goes through as it is now, it
will undermine local and cities policies and regulations.
The commission, by law, has jurisdiction over all intrastate
charter-party and passenger motor vehicle carriers, though not cabs,
which are licensed by cities and counties.
The PUC began enforcement action against these transportation
companies in October 2010 when it issued a cease-and-desist letter to
Uber Technologies. Similar orders went out to Lyft and Sidecar in August
2012. All three companies are located in San Francisco. Uber has
operated since 2010, while Lyft and Sidecar launched last year.
In December, the PUC said it would begin evaluating "the safety of
ride-sharing businesses that utilize the Internet, social media and
location services to arrange transportation of passengers over public
highways for compensation."
In late January, the commission reached a temporary operating
agreement with the three companies, allowing them to operate while the
rule-making process was underway. It also suspended previous $20,000
citations issued to each of the companies.
Lyft, Sidecar and UberX, a service by Uber Technologies, began operating
in
Los Angeles early this year. Things went smoothly until June 24, when
they received cease-and-desist letters from the Los Angeles
Transportation Department.
The city accused them of violating codes and threatened drivers with arrests.
The next day, about 300 cabbies circled Los Angeles City Hall, honking in protest of what they called "high-tech bandit cabs."
None of the three services stopped operating, and argued that their
agreements with the CPUC allowed them to operate across California.
Since then, the Transportation Department has backed off its threat
to arrest drivers, saying it is working with Mayor Eric Garcetti to
"address ride-sharing companies in the city."
"Companies with a state operating permit and utilizing state
permitted charter vehicles and drivers can operate legally so long as
they only offer pre-arranged trips and comply with state regulations,"
the Transportation Department said in a recent statement.
