A conflict in San Francisco between the troubled taxi industry and opportunistic ride services will reach a milestone Thursday when the California Public Utilities Commission votes on proposed regulations for the mobile app-based startups and possibly sets a precedent for the rest of the nation.
Since ride services such as Uber, Lyft and Sidecar launched in The City in the past few years, heavily regulated taxi drivers have been accusing them of using personal cars for commercial reasons and without comprehensive insurance. They also have said government agencies have unfairly allowed them to continue operating.
In August 2012, the CPUC sent cease-and-desist letters to the ride services. After they failed to comply, the commission allowed them to stay in business as it drafted regulations, which require background checks on drivers, specific insurance requirements, zero tolerance on alcohol and drugs, and driver training. The proposed regulations also put a name to the services: Transportation Network Company vehicles.
The companies don't see the developments as a bad thing.
“We started having criminal background checks, having insurance from the beginning because we've always wanted to do them, not because of our regulatory structure,” said Lyft co-founder John Zimmer. “I think as long as the focus remains on safety and allows for innovation to provide the solution that consumers want, then it's a positive thing.”
But Hansu Kim, president of DeSoto Cab Co., which has a 170-taxi fleet, said the concern should be about drivers using personal vehicles for commercial purposes, which Lyft and Sidecar introduced and Uber followed.
Kim admitted he is “all for consumer choice” and that his own industry has been failing to meet demand, but regulations for these companies need to be on par with the stringent requirements for taxis.
Even if the new regulations level the playing field, Kim had another concern: “You really think CPUC is going to regulate and enforce rideshares locally? No way. They don't have any kind of edifice to even enforce them on a state level.”
Regulations would be a good thing simply because “right now is, there is no regulation everywhere,” said Earl Epstein, a founding partner and chief technology officer of NexTaxi, which has been working on taxi dispatch systems for two decades and integrated an app for cab fleets three years ago.
“Any kind of new technology has a good time at first because they enter the space and don't need to play by rules,” Epstein said. “And until someone comes up with rules, they get away with it.”