Rideshare companies like Lyft, which attaches pink mustaches to its drivers' cars, are subject to new proposed regulations by the state PUC. (Photo courtesy of Lyft).
Ride-share companies like Lyft, which attaches pink mustaches to its drivers’ cars, are subject to new proposed regulations by the CPUC. (Photo courtesy of Lyft)

When the California Public Utilities Commission (CPUC) proposed new rules on Tuesday to govern the emerging ride-sharing startups, many of which are headquartered in San Francisco, the news was greeted as a victory by Lyft, Sidecar and Uber.

And it is a victory, since as recently as last fall, the companies were facing cease-and-desist orders and stiff fines from the CPUC and other regulatory agencies around the country.

The proposed new rules, if adopted in September, will bring the booming ride-share sector under strict regulatory control, making it legal but also subjecting it to some new conditions and challenges.

The companies will be classified as Transportation Network Companies (TNCs), which are defined as those that provide “transportation services using an online-enabled platform to connect passengers with drivers using their personal, non-commercial, vehicles.”

Among the new requirements facing the TNCs will be ensuring that disabled riders are adequately served and that people in poor neighborhoods do not end up being “red-lined” from access to the rides that they need.

CPUC’s Marzia Zafar told KQED’s Katrina Schwartz, “We want to make sure that these new companies provide accessible transportation for the disabled community. So we’ve put in some rules and regulations to ensure that the disabled community is not left behind if this new mode of transportation begins to grow rapidly.”

The rules would require ride-share companies to provide incentives to attract specially-outfitted vehicles to their fleets and report annually on the demand for them.

Sunil Paul, CEO of Sidecar, told KQED News that his company will be able to comply with the new regulations: “We’ve recently made a number of usability fixes for visually impaired passengers, based on feedback from blind and low-vision app testers. We hear from our riders all the time that one of the reasons they love ride-share is that they can get a ride from Sidecar in parts of the city where cabs are not available. And we’ll continue our efforts to expand ride-share to underserved and disabled users.”

Lyft co-founder John Zimmer said, “We have always had accessibility issues in mind in the way engineers build our technology. It is in line with the core values of our company.”

As for serving poor neighborhoods, Zimmer added, “We are doing everything we can to make sure we are serving as much of the population as possible.”

Another key aspect of the proposed new rules is that CPUC has decided that the “voluntary reimbursements” for costs that Lyft and Sidecar riders pay to drivers (according to suggested amounts inside the app) are actually revenue earned by the drivers (and the companies, which take a percentage).

We asked Paul whether this will alter the company’s business model.

“It doesn’t. We built our business on the principles of ride-share. Our drivers love that they can drive when they want and that they have the ability to make some cash on the side. This helps them cover the cost of owning a car or pay off student loans or even realize a dream like starting a new business.”

Zimmer said Lyft already issues 1099K forms to drivers who earn above the IRS threshold as drivers, so this part of the CPUC rules will not affect his company’s operations at all.

Probably the most recognizable TNCs on the streets of San Francisco and other cities are Zimmer’s Lyft cars, which sport bright pink mustaches, known as Lyftaches. These were widely considered a clever marketing gimmick, but now the CPUC is proposing to make such identifiable symbols mandatory for TNCs:

“TNC vehicles shall display consistent trade dress (i.e., distinctive signage or display on the vehicle) when providing TNC services. The trade dress shall be sufficient to allow a passenger, government official, or member of the public to associate a vehicle with a particular TNC (or licensed transportation provider). Acceptable forms of trade dress include, but are not limited to, symbols or signs on vehicle doors, roofs, or grills. Magnetic or removable trade dress is acceptable. TNC shall file a photograph of their trade dress with the Safety and Enforcement Division.”

One thing neither Sidecar’s Paul nor Lyft’s Zimmer could confirm were news reports that some ride-share drivers have been arrested by airport police at SFO. Both execs said they know of no such arrests that have occurred to date.

 

 

  • laughtiger

    You forgot to include that they can’t be called “ridesharing” anymore, seeing as the CPUC has rejected that misrepresentation.

  • Barry Korengold

    Yes, why do you continue to call these for profit enterprises “rideshares”? It’s been pointed out ad infinitum by the legal taxi and limousine industry, and now the CPUC itself, that contrary to true “ridesharing” as defined in Calif. Public Utilies Code 5353(h), these services are FOR PROFIT and provide rides that are not “home to work and back” or “incidental to another purpose of the driver”.

    Unlike true “ridesharing”, these new apps actually ADD vehicles, congestion and pollution, rather than reduce them because everybody and their brother is buying a car now that they can use them as taxicabs, without paying the high cost of insurance or complying with other regulations imposed on legal taxis. If not buying a new vehicle, they are using their old cars which would otherwise be parked most of the day, to cruise the streets for up to 10 hours or more at a time, looking for fares, double parking and blocking up traffic.

    These enterprises, using PR backed with millions in venture capital, use the term “rideshare” to deceive the public and lawmakers of their true “for profit” nature, and to feign a false legitimacy for illegal transportation services. It is a disservice to the public and irresponsible journalism to repeat these false claims. The law should be followed unless or until it is changed, not the other way around.

Author

David Weir

David Weir is Senior Editor, Online News for KQED.  He previously worked at Rolling Stone, Salon, Wired Digital, Excite@Home, Mother Jones, among others, and as a co-founder and Executive Director of The Center for Investigative Reporting.

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