By Tracey Lien, January 23, 2015
Ride-hailing companies such as Lyft -- whose cars are seen above in Pennsylvania last year -- object to the DMV's assertion.
Uber, Lyft, Sidecar and other ride-hailing service drivers make money
with their cars. So should they be required to carry commercial license
plates? The California Department of Motor Vehicles says yes.
memo issued this month, the DMV cited the California Vehicle Code and
said “any passenger vehicle used or maintained for the transportation of
persons for hire, compensation, or profit is a commercial vehicle. Even
occasional use of a vehicle in this manner requires the vehicle to be
business implications could be huge, said George Wilk, an insurance
agent for America Business Insurance, which specializes in commercial
insurance. If a vehicle is registered as commercial, it must also carry
commercial insurance, which is “a different animal” from personal
Wilk said a personal policy might cost $800 to $1,200 a
year, while a commercial policy can cost two or three times as much
because it anticipates that a driver will be using his or her car more
often and be at greater risk of having an accident.
The DMV’s reminder -- which was first reported by BuzzFeed
-- follows rules set in September 2013 by the California Public
Utilities Commission, which regulates TNCs in California. The PUC’s
rules and state statutes require TNC drivers to drive their own private
vehicles, but do not specify a particular type of registration.
is the TNCs' responsibility to ensure their business model complies
with all state laws,” PUC spokeswoman Terrie Prosper said.
memo, posted to the DMV’s website, did not specify when drivers have to
comply with the rules. However, Mike Harris, a spokesman for the
California Highway Patrol, said anyone violating the law will be cited.
The CHP will “enforce it just like any other registration violation.”
to whether any ride-hailing drivers have been cited previous to the
memo, Harris said those statistics are lumped in with all registration
violations, and determining that would require combing through hundreds
of thousands of records.
Spokeswomen for the ride-hailing companies said the DMV’s rules undermine the broader set of rules laid out by the PUC.
Lyft drivers, including those who drive just a few hours a week, to get
commercial plates would essentially treat peer-to-peer transportation
the same as a taxi, undermining the thoughtful work done by the CPUC to
craft new rules for ride-sharing in California,” Lyft spokeswoman
Chelsea Wilson said.
"Over 80% of Sidecar drivers are part-time or
occasional drivers, giving rides on their way to work or to supplement
their income,” Sidecar spokeswoman Margate Ryan said. “Everyday
Californians using their car in this capacity shouldn't be required to
hold a commercial license.”
And Mike Montgomery, executive
director of tech industry group CALinnovates, issued a statement saying
the DMV cites a “nearly 80-year-old law” and is “throwing more tacks on
the road to deflate this emerging industry.”
Wilson told The Times
that Lyft is meeting with the DMV for further discussion. Uber is
“currently exploring its options,” spokeswoman Eva Behrend said.