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State approves sweeping new regulations for Uber, Lyft but delays rules on leased vehicles

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Uber and Lyft vehicles in California must now play by a whole new set of rules that for the most part were favored by the ride hail companies.

The California Public Utilities Commission, which regulates what it calls Transportation Network Companies like Uber and Lyft, passed myriad new regulations Thursday, from rules as small as where the pink mustaches on cars should go to as sweeping as stricter vehicle inspections.

The commission also approved regulations formalizing services like UberPOOL and LyftLine, which allow riders to share rides and split the bill.

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Previously such services operated in nebulous regulatory limbo, and are hotly opposed by the taxi industry.

Commissioner Mike Florio was the sole dissenter of the new regulations, chiefly because they formalized these fare-splitting services, he said during the vote.

In an email, an Uber spokesperson told the San Francisco Examiner, “We are very happy that the Commission endorsed forward-thinking products like uberPOOL and listened to Californians advocating for programs to allow more drivers to earn money on their own time.”

In another favorable move for ride-hail companies, CPUC backpedaled on barring drivers from operating short-term leased vehicles on Lyft and Uber.

Those regulations will be decided sometime in the future, according to the commission.

The new rules are what the CPUC calls its “Phase II” regulations. Its Phase III regulations will be debated in the coming years. They will ultimately impact some 37,000 of such drivers in San Francisco.

In another favorable move for ride-hail companies, CPUC backpedaled on barring drivers from operating short-term leased vehicles on Lyft and Uber, which posed a threat to a new partnership between General Motors and ride-hail company Lyft.

“What was more interesting to me was the hundreds of more personal emails I got on this topic,” said Commissioner Carla Peterman. “They were mixed, I’d say evenly split from people asking us to preserve flexibility on the definition of a personal vehicle.”

Commissioner Liane Randolph said those leased vehicle rules relied heavily on state vehicle code.

“In my view, the interpretation of the question of a personal vehicle is, is this your vehicle and you use it for all purposes?” Randolph told the commission, saying it was important that, “You didn’t just go to the rental car place and pick it up for a couple of days” to drive for a ride-hail.

New high-stakes financial deals, like General Motors, Inc.’s $500 million investment in Lyft, and a subsequent program for Lyft drivers to lease vehicles from General Motors, Inc., added fuel to missives between the legal teams of the multi-billion-dollar ride-hail dollar companies, their critics and the CPUC.

In a statement to the Examiner, Lyft wrote, “We appreciate the Commission delaying a decision on the type of short-term leasing partnerships that Lyft has with General Motors and Evercar. These programs help people quickly and easily become a rideshare driver as a flexible way to make ends meet.”

uberGraph

Above, Uber Lyft and the SFMTA offer differing views, from legal filings to the CPUC, of new regulations passed by the CPUC today.

These new rules were slated to be voted on in January, but encountered repeated delays as the commission sought more time to decide how to regulate “leased” rideshare vehicles.

Many speaking publicly at the CPUC’s meeting Thursday spoke against limiting leased vehicles.

“Recent amendments (to ride-hail regulations) would limit the options for innovation,” Juanita Marie Martinez, regional manager of General Motors’ western region, told the commission.

Lyft and Uber operators alike argued that leased vehicles let them leave their personal vehicles off the road, saving drivers money in maintenance costs. Enterprise, for instance, pays maintenance fees for Uber drivers.

Speaking to the San Francisco Examiner, Martinez said that though “we have not landed yet” in California with leased vehicles, its leasing pilot program, Maven, boasts more than 6,000 users between Ann Arbor, Mi, New York City, and Chicago.

Though not confirming whether Maven would one day begin in California, she said, “Historically what we normally do is pilot” such a program. General Motors is also in talks with the San Francisco Municipal Transportation Agency for new programs — perhaps even autonomous vehicles — to be included in its newest federal innovation “Smart Cities” grant request.

San Francisco is currently a finalist for that Federal Department of Transportation grant for $40 million toward “future” transit.

If the CPUC ruled to exclude leased vehicles “would drastically alter what we’re able to offer The City as part of the proposal,” Martinez said.

Two local California entities, the SFMTA and San Francisco International Airport, both took issue with the term “personal vehicle” to include leased vehicles.

Critics of that practice contend drivers are no longer “sharing” if instead of using their own vehicles, they use leased vehicles specifically for driving for Lyft or Uber.

Kate Toran, head of the SFMTA’s taxi division, previously told the Examiner that leasing vehicles twists the meaning of “ridesharing.”

The SFMTA opposes leased cars being defined as personal vehicles.

“[The companies] started by calling themselves [ride-hailing]. You as a driver just happened to have an empty seat. That was the sharing,” Toran said.

If Uber and Lyft drivers can lease vehicles, she said, “To me, that’s a commercial transaction. That’s getting more and more like a taxi service, and less like, ‘sharing.’”

Ultimately, the commission wrote new language into the Phase II regulations to decide the fate of leased vehicles, as well as fingerprint background checks for rideshare drivers, in its Phase III proceedings.

Many other new regulations around Lyft and Uber vehicles were passed.

Among Commissioner Liane M. Randolph and CPUC Administrative Law Judge Robert R. Mason’s 15 proposed new “Phase II” regulations for Uber, Lyft and other TNCs are some tighter regulations, which bring TNCs more in line with the taxi industry. Those include increasing the frequency of vehicle inspections, tighter background checks for TNCs which mainly drive unaccompanied minors, annual reports on “fare-splitting” (like UberPool and Lyft Line services), and increased records transparency.

Uber and Lyft will now need to open their books to the CPUC on proof of required liability insurance, criminal background check information, driver’s licenses and driving records, and vehicle inspection records.

They will also face greater transparency in revealing driver suspensions, deactivations, and subsequent reactivations.

TNCs also may now need to display “trade dress” (Like Lyft’s iconic mustache) in the back and front of the vehicle, so they are more visible.

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  • Promontorium

    These scumbags at CPUC ban leasing and that’s it for me. I go crawling back to part-time minimum wage fast food work. God I hate this state so much. You morons have had it your way for decades. See things getting better? You hate business so much. You hate people making it on your own. You’re disgusting.

  • Earl D.

    I have to admit I’m surprised by the continued vendetta SF and CA government continues against ride sharing. Setting aside whether the industry is a net positive or negative (and whether you think it’s operating legally/ethically) the fact of the matter is that there are many times as many drivers for these companies as there ever were for cabbies who bent city governments to their will for decades with a never ending stream of regulations to set up barriers of entry fer new competitors.

    In addition SF is now totally dependent on these companies for transportation. Even a small reduction in service would likely result in transit chaos and a popular uprising. Apparently it will take some politician being badly burned before city administrators and elected officials understand the scope of what they’re dealing with.

  • Ragazzu

    Funny how you’ve internalized Silicon Valley’s great lie: that the terms of your exploitation are actually freedom.

  • Promontorium

    Let’s see, no boss. Make my own hours. I am responsible for my own success with riders. No bullshit. Neither Lyft nor Uber tell me what to wear, what to say, or where to go.

    At my convenience and desire I hop into my car and I travel Northern California. I’ve been to Sacramento, Rancho Cordova, Folsom, Florin, Lodi, Stockton, Manteca, Livermore, Plesanton, Dublin, Hayward, San Leandro, Alameda, Oakland, Piedmont, Emeryville, Berkeley, Albany, San Francisco, Daly City, Brisbane, Milbrae, Burlingame, San Mateo, Foster City, Palo Alto, Fremont, San Jose, and a little place called Campbell.

    One person will lead me to the next. One city leads me to the next. The riders are so much fun.

    And it has allowed me to quit my day job, and make more money than I have in a decade, giving me more options for where and how I can live.

    Physically, financially, creatively, psychologically. In every way this has freed me.

  • Ragazzu

    That’s all fine till you have your first major accident.

    I hate to say it, but you’re living proof that P.T. Barnum was right.

  • Jim

    You’ve done well, but you’ve also screwed over a lot of traditional cab drivers who have played by the rules and followed myriad city regulations. If you get into an accident, you lie to your insurance company about your commercial activities and get your vehicle fixed and the insurances rates for the public goes up.

  • Promontorium

    You’re implying my car isn’t insured. You’re just some random cynical asshole on the internet. I’m a military veteran and college graduate who has taken the only opportunity I’ve found to better my circumstances in life. You hide behind your anonymity but not logic or reason. You make broad conclusions and have no argument to back it up. I’m tired of you loser.

  • Rachel Galindo

    Well everyday uber and Lyft show their true face, initially they tried to hide behind a false “ridesharing” loophole that according to them shielded them from any responsibilities, but they found out that financially strapped people are the best candidates to shackle themselves in servitude to the new “ridesharing” corporate transnationals. The less the drivers and riders now about the real costs and risks, the better for uber and gang. The more ignorant the driver is about the real meaning of profit, the better for uber. Uber has corrupted the meaning of ridesharing, shared economy, profit, independent with a selfish purpose, after all what can you expect from Ayn Rand followers. The concept is good, but the people behind it are evil.

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