California Regulator Passes First Ridesharing Rules, A Big Win For Lyft, SideCar, And Uber

The California Public Utilities Commission has unanimously approved new regulations around ridesharing services such as Lyft, SideCar, and UberX (as initially noted in a number of reports on Twitter). The CPUC proposed the rules back in July, offering a legal framework forridesharing services to operate throughout the state. As we reported then, most of the regulations revolved around public safety, as well as ensuring that drivers have had background checks and are covered by insurance in the case of an accident. According to a press release from the CPUC, the new regulations establish a new category of business called a Transportation Network Company, and it requires those companies to obtain a license from CPUC, conduct criminal background checks, establish a driver training program, and hold commercial insurance policy with a minimum of $1 million per-incident coverage. Lyft co-founder and President John Zimmer told me that California is the first state to establish such rules. While the company already operates in San Francisco (where it’s headquartered), Los Angeles, and San Diego, Zimmer said the decision “provides clarity to our communities here in markets that already exist” while also setting the stage for launching in more cities. He also said that when he talks to regulators in other cities and states, they’re usually looking to see how things shake out in California, and now the state has shown there’s “a way to do this that doesn’t compromise on safety, innovation, or choice for consumers.” As for how the regulations that were passed today compared to what was initially proposed, Zimmer said some of the language has changed, but the substance is similar. A CPUC spokesperson said the main revision since July is strengthening some of the provisions around insurance. “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.”