Jeff Chiu/AP file photo

Jeff Chiu/AP file photo

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

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.

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.”


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.Lyftride-hailtaxisTransittransportationUber

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