Regulations

California PUC To Evaluate Uber, Ridesharing Services

Posted on December 11, 2012

SAN FRANCISCO — The California Public Utilities Commission has released a proposal which, if approved by the CPUC's Comissioners at a voting meeting on Dec. 20, would open a proceeding to protect the public safety from mobile app-based transportation companies and hold them accountable.

The CPUC, which regulates charter-party carriers operating in the state, says on its website that new businesses such as Uber, among others, have presented the CPUC with a situation not encountered before: the use of mobile communications and social networks to connect individuals wishing to offer and receive low-cost and convenient, sometimes shared, transportation. Other companies under the heatlamp include Lyft and SideCar.

In November, Uber, Lyft and SideCar were each issued $20,000 citations by the CPUC for:

  • Operating as passenger carriers without evidence of public liability and property damage insurance coverage in effect and on file with the CPUC.
  • Engaging employee-drivers without evidence of works' compensation insurance in effect and on file with the CPUC.
  • Failing to pre-employment test and enroll drivers in the Controlled Substance and Alcohol Testing Certification Program.

The proposal issued will assess public safety risks and ensure that the safety of the public is not compromised in the operation of these new business models. “The proposal is not to stifle innovation and the provision of new services that consumers want,” reads the CPUC web entry on the proposal.

It continues: “New technology and innovation requires that the CPUC continually review its regulations and policies. This review would ensure that the law and the CPUC’s safety oversight reflect the current state of the industry and that state regulations are just and fair for all passenger carriers."

If the proceeding is approved by the Commissioners, all interested parties are encourage to participate to ensure that regulation continues to be the safety net to protect the public rather than a hindrance for businesses. The issues that would be examined concern the CPUC’s regulations relating to passenger carriers, ridesharing, and online-enabled transportation services.

The CPUC seeks comment on issues including consumer protection and safety implications of the new methods for arranging transportation services; whether and how the new transportation business models differ from longstanding forms of ridesharing; and the new transportation business models’ potential impact on insurance and transportation access.

If the proceeding is approved, a decision on this expected within six months.

— Michael Campos, LCT associate editor

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