Friday, March 1, 2013

CPUC Hearings Begin

The California Public Utilities Commission began hearings recently on Rulemaking on Regulations Relating to Passenger Carriers, Ridesharing and New Online Enabled Transportation Services. Administrative Law Judge Robert Mason presided and will see the hearings through to the end.

People who attended included Director Chris Hayashi from Taxi Services, Mark Gruberg from the United Taxicab Workers, Barry Korengold of the San Francisco Cab Drivers Association, Carl Macmurdo of the Medallion Holders Association, myself, Willie Brown speaking for Tickengo (aka "Lyft Light") and representatives from the International Association of Transportation Regulators,the San Francisco Paratransit Association, the SFMTA, the SFO, Uber, Sidecar, Lyft and others.

A transcript of the hearing has yet to be circulated and I was unable to take notes so all I can do is give you my impressions.

This was a feeling out session where a few positions were laid out and some preliminary points scored.

Judge Mason said that there would be four different issues involved: Jurisdiction, Public Safety, Ridesharing and Insurance. 

But before going into detail, I’d like to remind everyone that the CPUC lifted a “cease and desist” order against Lyft and Uber before the hearings began and rescinded a $20,000 fine against both companies. Both Lyft and Uber have issued statements saying that the question of the legality  of “ridesharing services" (the supposed purpose of the hearings) has already been settled in their favor. In their blog, Uber wrote:

“ ... the agreement (with the CPUC) states that ride-sharing — or rides provided by drivers not specifically licensed to drive a limousine or taxi — is legal, too. This paves the way for Uber to begin offering ride-sharing services in California in the near future.”

(BTW - The lead photo comes from a site of downloadable CPUC images. Is the CPUC now advertising for Uber on top of everything else?)

All of which begs the question: If the issues have already been decided, why are these hearings even taking place?


Lyft, Sidecar and Tickengo claimed that they should not be regulated by the CPUC or anybody else because they were carpooling or ridesharing services and were given an exemption under a law that former San Francisco Mayor Willie Brown knows how to quote.

But so do I and California Public Utilities Code Section 5353(h) describes actions considerably different than the ones Lyft, Sidecar and Tickengo drivers use to conduct their businesses.

Calif. Public Utilities Code Section 5353:

(h) Transportation of persons between home and work locations or
of persons having a common work-related trip purpose in a vehicle
having a seating capacity of 15 passengers or less, including the
driver, which are used for the purpose of ridesharing, as defined in
Section 522 of the Vehicle Code, when the ridesharing is incidental
to another purpose of the driver....

Of course, what Lyft, Sidecar and Tickengo do is pick customers up at a location of their choosing and transport them to various other locations for a fee - just like a taxicab. Ridesharing, Inc. a real ridesharing service, describes Lyft etc as "peer to peer taxicab services." 

I think this is a useful designation because, while the drivers are being paid, they are untrained amateurs which puts them on the same abysmal level as the average San Francisco driver. Most of all, I like “peer to peer taxicab service” because Sidecar’s attorney hated it. It blows apart Sidecar’s pretense of being a carpooling service.

In fact, Lyft, Sidecar and Tickengo all tacitly admit that they are not really ridesharing services under the current law.  The reason that they all want the CPUC to change this law is so that their businesses can become legal ridesharing services in the future and avoid the regulations that they should be following now but aren't.

Uber, on the other hand,  argues that it shouldn't be regulated because its product is merely an app and all the business responsibilities are handled by either by drivers who have their own limos or various agencies that train the drivers and license the vehicles. They also argue (in the spirit of double-think) that they offer new technology that can't be regulated for reasons that this humble cab driver may be too slow to grasp.

In fact, the technology is neither new nor unique. Apps like Flywheel, Hailo and Taxi Magic offer riders similar services to Uber - only they do so through legal companies and by following city and state laws. 

What is unique about Uber is their determination to market their product as if no laws existed, regardless of its impact on existing industries or the public.

Uber may be an app, but that app has consequences in the real world. Uber is putting hundreds of limo drivers on the street with vehicles that pollute the atmosphere. Ditto for Lyft and Sidecar which have very few hybrid vehicles in their fleets.

The SFMTA has commissioned an expensive study on how to improve the taxi industry which is going to be useless because it's impossible to calculate, without accurate information, the effect that the 1,500 or so vehicles put out by Lyft, Sidecar and Uber are having, or will have, on service, safety and the environment. Uber, in fact, has put out Uber X in direct competition to taxicabs and claims that it is legal because the vehicles have TCP numbers and thus are not taxis - although they act like taxis and do not follow charter-passenger carrier regulations.

Uber clearly has to be regulated, if for no other reason than to keep them from exploiting the people of San Francisco by doubling their prices in the event of an earthquake like they did when the storms wrecked New York last fall.

Public Safety

The main question here is how do you know that their drivers are vetted or the vehicles safe. Uber claims that such things are not their responsibility while Lyft and Sidecar make grandiose claims from giving tough driver interviews, intense driver training and thorough rigorous vehicle inspections for which they offer no verifiable proof of what-so-ever. 

Clearly, public safety demands regulation and oversight.  Especially for organizations like these whose leaders can't tell the difference between truth and marketing.


As I mentioned above, Lyft, Sidecar and Tickengo need to change the rules in order to become the ridesharing services they want to be, instead of the taxicab services that they actually are. 


I've had my say on this subject but I'd like to add that I think every vehicle transporting customers should be required to carry the same 1 million dollar insurance policies as taxicabs.

In General

Judge Mason seemed to be remarkably uninformed about what Lyft, Sidecar and Uber do. This isn't necessarily a bad thing. He certainly will have the chance to get up to speed and a fresh mind could spell a lack of prejudice. On the other hand, it could make it more difficult for the judge to understand the issues. 

For instance, I was taken to task by Judge Mason for "editorializing" when I characterized Lyft, Sidecar etc as "bogus" ridesharing services but he didn't appear to understand that almost everything that Lyft and Sidecar representatives said could be accurately characterized as science fiction.

I pointed out to Judge Mason that I had interviewed with Sidecar and they inspected my car from a photograph. Of course the Sidecar attorney disputed that this had happened and it was clear that the Judge accepted Sidecar's spin. I can't say that I blame him.

I myself was stunned when the Sidecar rep finished my group orientation and told us that there would be no individual interviews, meaning that the cars would not be inspected. We were urged to download the Sidecar app and get working ASAP.  It wasn't just me. Seventeen other drivers were approved at that session and told to get a move on without having their cars so much as glanced at.

Of course, unless Sidecar is run by imbeciles, they would have started inspecting the cars once my post came out. Or, maybe not. These people get more mileage out of lying than anybody I've ever seen. And why should it be otherwise? All they have to do is open their mouths and the local press eagerly prints whatever dribbles out as gospel.

The question of insurance still hasn't been dealt with and I'm beginning to wonder if it ever will be.

It's interesting to note that Sidecar no longer claims to have a million dollar policy and that their attorney remained silent when Judge Mason asked if they had insurance. He let Lyft's attorney answer for both or them by saying that Lyft had a million dollar insurance policy. The judge accepted her statement as fact.

When I pointed out the urgency of dealing with the 800 uninsured vehicles already on the street, the judge said he didn't want to hear about insurance.

Silly me.  I thought the overriding issue was supposed to be public safety.

Key Issue

The key immediate issue is whether or not Judge Mason will go forth with evidentiary hearings. If so, Lyft, Sidecar, Tickengo and Uber will actually have to answer questions about how they do business as opposed to sending us to links that don't exist like they do now. At an evidentiary hearing Lyft would actually have to produce the million dollar "excess liability" insurance policy that they claim they have and whether it includes total coverage when their personal policies are voided. Uber would have to tell us exactly how many vehicles they have on the street and what percentages of the fares that they are taking from their drivers. And, sidecar would have to prove its safety claims.

But, in light of the agreements with Lyft and Uber, the question remains: are these hearing anything other than a show?

Looking at Lyft's Blog as I finish this article, it's clear that Lyft CEO John Zimmer thinks he has been given the okay for a rapid expansion of his fraudulent taxicab business.


  1. This whole industry development shows a blatant disregard for reality - Dan Hara, who is creating the Hara Report, thinks there are "many realities." He seems to think in the interviews he conducted of drivers that we had agreed to that because he put that idea forward. I imagine he will never have to tell that to someone who sees two, three, or more "reality" bubbles burst. Or does he mean that bursting bubbles is "evidence" that there are many realities? Unless the glut of cabs is going out each night into all those other realities and not competing with us in the one reality, this is one many-world scenario that will hurt a lot of people.

    You're going too easy on Judge Mason. It is certainly not good if he is not up to speed about the industry. He sounds like another "judge" of the sort that shows up to work without knowing what is on the table. It is amazing that such "judges" exist who do not even know what they are deciding about. Such "judges" cannot make informed decisions, they are not informed.


    Without the many-layered registration, driver and vehicle qualification, company scrutiny and insurance, there are some real abominations being created. Monkeys and fruit juices are now plainly and regularly visible behind the wheels of everyday vehicles. These phenomena are simply not supposed to happen.

    For Judge Mason to cavalierly dismiss insurance as an issue is a sign that there is no real concern for a proper verisimilitude between what is allowed and what the public thinks should be allowed - the public certainly believes that insurance should be up to the task, and if these frauds are allowed to get away without proper insurance there will, for awhile, be no end to the types of "business arrangements" being made.

    When the Feds tried to get Luxor to pay employee tax, the judge knew so little about the industry that he had never even heard of a ramp cab! He had to stop me in my testimony and ask what they were. I despair at the direction Government is going.

    No wonder the Feds lost the case - the judge was completely incompetent to the issues at hand. Judge Mason sounds just the same. We are being beaten up in public by the very people whom we are conditioned by our upbringing are the ones who protect us.

    You are quite correct when you remark on Uber's "Determination to market their product as if no laws existed, regardless of its impact on existing industries or the public,” but that is not only Uber, that is really the basis for all we are seeing with these fakes.

    Very probably, the judges too are fakes. If Judge Mason does not want to hear from someone who interviewed with the companies in question, who is he going to listen to?

    You make an especially good point when you say “The SFMTA has commissioned an expensive study [the Hara report] on how to improve the taxi industry which is going to be useless because it's impossible to calculate, without accurate information, the effect that the 1,500 or so vehicles put out by Lyft, Sidecar and Uber are having, or will have, on service, safety and the environment.”

    The City is spending public money to get more cabs when the same money could be spent to develop a "Google Maps of Taxi Dispatch." The public thinks that's a no-brainer. The public does not realize that in San Francisco, cab companies are NOT in the business of providing taxi service to the public. Cab companies are in the business of leasing cabs to drivers. They can only make more money by spreading the orders thinly over a larger number of cabs.

    And more cabs only makes it easier to get a cab where it is already easy to get a cab.

  2. Great read. What I've known all along and is now being reinforced by how the judges react to these issues is that money will always win in a court of law. If you can hire a great lawyer or lobbyist to fight for your App, then you do not have to adhere to any regulation. I have a fleet of town cars that we operate under the law and regulations and we're paying a lot of money for our insurance policies, not to mention paying the drivers. Here's my new plan: Drop our insurance asap and get regular car insurance. Let the drivers of these vehicles know that they will no longer be employees of the company. The money saved from these two things, I will invest in an app for ridesharing. Offer the cars to drivers that have a drivers license and let them start making money from the app and cars. This is the way of the future and there's no need to pay for things that aren't going to be regulated. Uber, Lyft, Sidecar...thanks for the genius idea. No regulations = more competition for yourselves. Anyone can get an app made for a small investment of a couple grand that could potentially pay for itself in just a matter of months.

  3. sfo limo service Taxi drivers can perpetually try and take the shortest and most effective route to your destination unless you tell them to create a diversion.

  4. California constitution classifies them all as public utilities subject to the control, due to the simple fact that they are involved in the process of transporting people. This part of a constitution is almost 100 years old and might be overlooked, but they will not stand up in court: ttp:// Maybe it is time to unite and file for a declaratory relief?