Lyft, SideCar and UberX* –the dominant ridesharing services in California, now have the blessing of the California Public Utilities Commission to be regulated. The services were previously seen as rogue services narrowly skirting the laws that regulate public transportation by creating a payment system based on “tips” rather than fares, and suggesting that drivers and riders were both private citizens simply sharing a ride together.
The CPUC has a established a new category of transportation called a “Transportation Network Company” that will require those companies to obtain a license from CPUC, conduct criminal background checks, establish a driver training program, and hold a commercial insurance policy with a minimum of $1 million per-incident coverage.
SideCar sent an announcement out to its drivers announcing “We Made History, Baby!”
“One year ago, the CPUC was taking steps to shut us down,” reads the announcement, “We knew this idea of bringing people together to solve a problem like transportation would be met with resistance. But hand-in-hand with you, our fantastic drivers, we held firm in our conviction that transportation is too important not to innovate —and together, we have! Today we have a new transportation category and a new set of rules that will allow rideshare to flourish in California, and will pave the way for innovation nationwide.”
And like many issues, it is safe to say that as California goes, so does the rest of the country. The legitimization of ridesharing was bound to happen, given its popularity and the cultural shift to more consumer-control over products and services.
“Our decision emphasizes safety as a primary objective, while fostering the development of this nascent industry,” said Commissioner Mark J. Ferron in the press release. “We have specified our expectations for the attributes of insurance. Now the insurance market will determine the best approach to ensure that there is coverage for passengers, drivers, and third parties at all times while these vehicles are operating on a commercial basis.”
*Note that UbserX is the ridesharing service provided by Uber.
Four People Riding in a Car image courtesy of Shutterstock