The CPUC's Proposed Decision: the Good, the Bad, the Ugly

When the hearings on ride sharing ended last spring, I discussed various possible scenarios with an ally and we thought the most probable outcome for our comments was that they would be filed away and only read if archaeologists stumbled across them a couple hundred years in the future.

This admittedly cynical view was born from the CPUC's act of ceasing the cease and desist orders against Lyft and Uber before the hearing even began. It was fostered by a perceived prejudice on the part of the CPUC  that their staff often did their best to live up to.

However, this notion turned out to be too skeptical, too world weary, too paranoid. While the CPUC clearly had made up its collective mind to legalize the fake ride sharing services before the hearings began, our comments were read and even had some positive effects on the subjects of regulation and insurance.

The CPUC's proposal was therefore much less one sided than some of us had anticipated.

Regulation

The CPUC ruled/proposed that Lyft, Sidecar, Uber and other Transportation Network Companies (TNC) are for hire transportation companies. In the process they gave a thumbs down to various TNC arguments including Uber's contention that they were merely a software company and the claims by Sidecar and Willie Brown that the companies were non-profits. The CPUC wrote in its decison,

"We reject Uber’s assertion that TNCs are nothing more than an application on smart phones, rather than part of the transportation industry. Uber is the means by which the transportation service is arranged, and performs essentially the same function as a limousine or shuttle company dispatch office. Accordingly, Uber is not exempt from the Commission's Jurisdiction over charter-party carriers."

The CPUC went on to say,

"We find this argument to be factually and legally flawed and, therefore, do not accept that the method by which information is communicated, or the transportation service arranged, changes the underlying nature of the transportation service being offered...."  and "... the Commission is not attempting to enact rules that would impose regulations on the smart phone applicationapplications used to connect passengers with drivers. Instead, the Commission is attempting to promulgate  promulgating rules that wouldwill govern the transportation service itself.


The CPUC also dealt aces and eights to Lyft & Sidecar's absurd rationalization that because they called their fees "voluntary donations," they were operating as non-profits.

"We reject the arguments made by Lyft and SideCar that any payment for rides arranged through their apps is voluntary and find that current TNCs are engaged in the transportation of persons for compensation. ... Clearly each TNC is receiving either an economic benefit or a business benefit. At a minimum, they are receiving increased patronage with the growth of their businesses."

I don't know if the CPUC exactly deserves kudos for not letting the TNC lawyers pull the wool over their eyes but the fact is that they didn't. And, the CPUC arguments for not letting this happen are well thought out and well reasoned. This opens up the possibility that reason, in the end, could carry the day.

Their decision on insurance is a little more problematic. I'll deal with it in the next post.

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I've had few inquiries from people wondering where to send photos of Lyft and Sidecars. You can send them to my e-mail at: amazincrocker@gmail.com Please include the license plate # if you can and there is no point in sending a pic of a Sidecar unless it is identifiable.

In this post, I'm also including a lengthy e-mail from a Lyft driver that takes up the first three comments in my comments section.

CPUC Chooses Venture Capital Over Public Safety

To hardly anyone's surprise, the CPUC chose to validate the operations of Lyft, Sidecar and Uberx. That this would be their decision has been obvious from the moment the CPUC lifted their cease and desist orders against Lyft and Uber – before the hearing on legalizing ridesharing even started.

The members of the commission gave a lot of lip service to public safety and a little bit to helping the cab business but the decisions they've made will inevitably lead to shafting both taxicab drivers and the public.

More later – I need to take a woman I met in my taxi to lunch. Then, I need to drive my hybrid taxi tonight so I can make some money while it's still possible.

Analysis later. But first a preview.

I told one of President Peevey's assistants that personal insurance companies won't write policies for people who drive for Lyft et al.

She said, "We know that – the insurance companies will have to adapt."

And, indeed they will.  Insurance companies don't loose money. They'll pass the bill on to the public and raise the personal insurance auto rates for everybody in California.

Enjoy your lunch.

I think this links to latest version of the proposed decision.

NOTES:

I wrote this piece in about 10 minutes and naturally left much out.

1. In the original version, I said that the CPUC had "legalized" the operations of Lyft, Sidecar and Uberx. This was incorrect. Only the California State Legislature can change these laws. It would have been more correct to say that the CPUC proposed legalizing ...

They will have a fight on their hands.

I'd like to thank Barry Korengold of the SFCDA for pointing this out. I'd also like the thank him for pointing out my  many typos and grammatical error over the last years. I'm a horrible proofreader.

2. I was unable to find the name of Peevey's assistant on the CPUC website but, while I didn't misquote her, I did leave her next sentence out.

She said, "We know that – the insurance companies will have to adapt."

I said, "Yes – the insurance companies will raise their rates."

She said, "No – we're already talking about a commercial lite policy with Geico."

There is much to said about that but here I simply have a question,

Why is the CPUC spending tax payers money bending over backwards to help these companies out? They keep claiming that they don't want to interfere in the TNC's business. Having been handed over $400 million in venture capital, they can probably afford to look into this for themselves.


The Phantom