California has become the first state in the nation to give an official thumbs up to ride-sharing companies, via a decision to let those businesses continue to put passengers in drivers’ cars if the companies comply with a set of regulations. This is not welcome news in the traditional taxi industry, which has been fighting the upward momentum of companies like Uber Technologies and Lyft.
The Public Utilities Commission voted unanimously to allow the services to keep going if they stick to safety and insurance requirements, reports the Los Angeles Times. Drivers will have to undergo criminal background checks, receive driver training, follow a zero-tolerance policy on drugs and alcohol and carry insurance policies with a minimum of $1 million in liability coverage.
Uber, Lyft and Sidecar all operate in California and work on a similar premise: Customers find available cars through apps on their smartphones, and pay a fee or donation to be connected to that driver. The car arrives, passengers get in (in some cases having already paid for the service via the app) and away they go.
The PUC will have jurisdiction over the ride-sharing industry as part of a new category of business, transportation network companies.
The taxi industry is no stranger to regulations already, and now it’s none too pleased that it’ll have direct competition that could cost them fares and customers. Especially since the ride-sharing options are often cheaper.
“This is an existential threat,” said a rep for the United Taxi Cab Workers of San Francisco. “It’s hard to see how the taxi industry with its rules and regulations and responsibilities can compete with a service that has none of those requirements.”
California becomes first state in nation to regulate ride-sharing [Los Angeles Times]