California mulling whether uberPOOL and Lyft Line are illegal

Swipe a cellphone touch screen, tap virtual buttons, and a car arrives. Fist bump the driver, and say hello to other passengers — strangers who also summoned the same ride on their apps, and with whom fellow riders split the fare.

This is the promise of services like Lyft Line and uberPOOL, run by Lyft and Uber, respectively. The nascent “carpooling” services were launched in the last year. Now though, these services may meet their demise from state regulators.

The California Public Utilities Commission, which regulates Uber and Lyft, is considering new laws for these ride-hail apps. In legal filings to the commission, the San Francisco Municipal Transportation Agency argued Lyft Line and uberPOOL use pricing structures that violate state law.

If the utilities commission agrees with the SFMTA, the services could be deemed illegal, according to filings.

Public Utilities Code 5401 states charter party carriers cannot charge on an “individual fare basis,” much like a bus would. Instead, pricing in charter party carriers (like limousines) must be based on vehicle mileage or time of use (like a taxi). The law was first written in 1961, and later amended in 1997, according to California code filings.

“The language of Section 5401 is neither unclear nor ambiguous,” SFMTA wrote. “Charter-party carriers may charge only one fare per trip. They may not charge individual fares to passengers when transporting multiple passengers.”

In a reply opinion, Lyft argued code 5401 regards services that charge “flat fees” for rides, but Lyft Line charges people based on time and distance traveled.

Lyft spokeswoman Chelsea Wilson told the SF Examiner that Lyft Line helps curb carbon emissions, a stated goal of local lawmakers. Half of Lyft rides ordered in San Francisco are through Lyft Line, she said.

“We take cars off the road,” she said. Uber did not respond to requests for comment, but in its filings it argued uberPOOL adheres to code 5401.

A letter submitted to the CPUC defended uberPOOL and Lyft Line, on behalf of the think-tank SPUR, the San Francisco Transit Riders group, transit advocates TransForm, the Metropolitan Transportation Commission, and various climate advocacy groups.

Lyft donated $5,500 to SPUR over a five-year period, SPUR confirmed for the Examiner.

The letter urged the utilities commission to pause action on code 5401 before the state legislature has a chance to amend the code. Current Assembly Bill 1360 aims to do just that, and if passed, would clarify utilities code to include companies like Uber and Lyft.

In filings, SFMTA also argued the best place to re-interpret code 5401 was not the utilities commission.

Gabriel Metcalf, president of SPUR, said the state needs to support innovative solutions to climate change. “Of course we need regulations,” he said, “but the regulations should be smart.”

CPUCLyftLyft LineSFMTATransitTransportation Network CompaniesUberuberPOOL

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