California regulators have approved rules that regulate ride-sharing services, becoming the first in the nation and creating a precedent for other states to follow. The vote by the California Public Utilities Commission (CPUC) was unanimous.
These rules will affect popular services like Lyft, InstantCab, and Sidecar, along with UberX. Based on today’s decision, drivers will need to obtain a permit from the CPUC, undergo a criminal background check, successfully pass a driver training program that each company is required to set up, and adhere to a zero-tolerance policy on drugs and alcohol. Each company must also offer insurance coverage.
But that’s not all, as the CPUC will be charging these companies one-third of one percent of total revenues in fees.
With respect to insurance, the state is requiring companies maintain commercial liability insurance policies of no less than $1 million per-incident coverage. Of note, in its decision, regulators refuted claims that Lyft, Sidecar, and Uber/UberX don’t have insurance, which some have cited as a reason for the companies being illegal and a danger to society.
The whole ride-sharing issue came to a head following a decision by the CPUC to hear arguments over how regulations could be put in place to not only protect the taxi industry, but also ensure that e-hail services could also be legal and exist peacefully. For most of 2012, we kept hearing about how these companies were served with cease and desist letters and also subject to retaliation from the taxi lobby.
By Ken Yeung
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