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California Becomes First State To Regulate Lyft, SideCar And Uber

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Lyft (Photo by Alfredo Mendez via the Creative Commons on Flickr)
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Today marks a big win for car-sharing companies in California, including Lyft, Sidecar and Uber: state regulators voted unanimously to create rules for companies that use smartphones in lieu of a hail sign to connect riders with drivers.

California is the first state to regulate ride-sharing services, according to TechCrunch. State regulators would require companies to put drivers through criminal background checks, offer training and carry hefty $1 million/incident insurance policies, according to Los Angeles Times. Vehicle's would have to undergo inspections, and drivers would be expected to follow a zero-tolerance code for drugs and alcohol, according to the Associated Press. (Earlier this year the state's Public Utilities Commission issued a cease-and-desist order while it studied the issue.)

In California, this move by state regulators is expected to replace attempts to regulate ride-sharing at the local level. Ride-sharing supporters who enjoy the apps' convenience and cut-rate prices a have faced off against taxi cab drivers who complain that they can't compete against the less heavily regulated companies.

Supporters hope that California will set an example for other cities and states around the country. Some of the supporters are the consumers themselves, but companies like Uber haven't been leaving their future to chance. Politico has a story about the company's lobbying efforts going on around the country (though it doesn't mention efforts in California, specifically):

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Backed by some of the biggest names in high tech, Uber has ramped up its hiring of top-notch, well-connected lobbyists, lawyers and public relations firms in a bid to influence municipal leaders and sway public opinion in its favor. The effort represents a sophisticated national network of consultants, ongoing public affairs and PR campaigns that is nearly unheard of for a startup, which typically steers clear of the insider political influence game. Some who have joined Team Uber have ties to President Barack Obama, Chicago Mayor Rahm Emanuel and New York Mayor Michael Bloomberg.


Taxi cab drivers sound like they won't go down without a fight. Mark Gruberg of the United Taxi Cab Workers of San Francisco told the Times: "This is an existential threat. 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."