Monday, September 30, 2013

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.


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.

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: 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.


  1. Hi Ed,

    I started driving for Lyft recently. After a few shifts under my belt, I went online to really delve into everything that I could find about "ridesharing" with Lyft, Uber, Sidecar, and other companies like RelayRides, etc.

    I will admit that while I don't agree with 100% of what is being said, especially by some of the more colorful commentators on your site, I want to share some things with you, anonymously.

    I'm going to quit working for Lyft because of the much of the information that I've found through your site and various other articles. Tomorrow I am going to call my insurance company and indeed get the "nail in the coffin" as it were about my policy with them, i.e., that they won't cover me if I work for Lyft or the others.

    Even though I've made a pretty decent amount of money through Lyft already and my family is struggling in a big way, my conscience is twitching.

    It's unfathomable to me how Lyft doesn't reveal their insurance policy and dodges basic questions asked from different, credible sources about how they operate.

    After reading about Uber and the fire hydrant fiasco, I thought, what if that had been me? One never truly knows out there, and even a veteran such as yourself can't predict if you're going to be run into and what you'll encounter on the streets.

    My experiences navigating S.F. have been mostly positive, thankfully, and I met some nice people that I might even befriend someday. There was one experience last week that unnerved me, though. A guy had requested Lyft to basically have me act as his mechanic and help get him back on the road. I mentioned that I didn't have the equipment necessary to help him and that's not what Lyft was for. Then three other guys showed up out of nowhere, carrying beer, and drinking said beer openly.

    We weren't far from a police station, either, and it was extremely sketchy. This was daytime as well. I drove away and they yelled at my car as I drove past.

    Some of the passengers that I had also picked up that day reeked from previous night's festivities and I had to BEG this group of girls to put on their seat belts!! Common sense is not that common apparently, ugh.

    What I am about to share is taken word for word from one of the groups in the secret Lyft group on Facebook called the Lyft SF Driver Lounge. Every driver accepted into Lyft is invited by the admins of this secret group. There are even more specific groups within this secret group. Groups based on locale, get togethers, etc.

    I wonder what your reaction will be.

    As I reread this post below, I think again if that had been me as the driver or the passenger or even a bystander? What if this individual had used their weapon(s)? Between this, the insurance and liability nightmares, and the fact that Lyft and other companies are encroaching on legitimate taxi services and the licenses and requirements that cost a lot to acquire/maintain, I'm done.

  2. Continued from above:

    Here's the actual post (names and locations have been asterisked out to preserve anonymity). I copied it verbatim as the OG poster kept it in one paragraph. It's well worth getting through the entire thing.

    We had a horrible experience last night. Picked up my passenger ****** and headed down **********. We turned right onto ***** and shortly thereafter an SUV almost slams into the back of my car as we came to a stop at a red light. I asked ****** to take a look at how close they came to hitting us, the grill was in my back window. I am surprised there wasn't an accident. Next thing we know the driver and passenger are screaming at us saying we almost hit their car, the driver starts to get out of the SUV and the passenger is halfway out the window yelling at the top of her lungs as she throws things at us (something hit the top of my car). The light turned green and I gun it. They come after us.

    ****** and I are trying to figure out what we did. We figure they are high on something as normal people do not behave that way. I attempt to get the heck out of there but the light ahead was red and we were boxed in, cars ahead & behind us and a divider to our left. The SUV pulled up next to us on the right and completely boxes us in. The guy is going crazy. I did all I could to stay calm and apologize although we did nothing wrong. He then pulled out a gun and pointed a red laser in my eye. The light turned green & traffic started moving, they moved with the traffic and I stayed back. I got us as far away from them as possible and got the heck out of there. ****** and I talked about it and exchanged contact info. Not sure if they mistook us for someone else or if they were upset over almost slamming into the back of us. I checked a picture I took of the SUV but it came out blurry and the license plate number is not visible. Knowing there was nothing the police could do I decided to call support. I dropped off ****** and called support, ***** was awesome. She encouraged me to call the police and take the rest of the night off. Knowing that if I took the rest of the night off I would probably never again drive for Lyft, I continued on for a couple more hours. *****, thank you for your calm kind support. I parked at ***** & *****, called the police and they showed up within 5 minutes. As I figured, the police said that without a license plate number there is nothing they can do but they took the report. A couple hours later the reality of the situation started to sink in and I headed home. Reflecting back, I probably should have called 911 as the situation was happening but the only thing I could think of was to get us the heck out of the situation NOW! Be careful out there and if you find yourself in a situation like this, do not engage with crazy drivers, just get you and your passenger to safety.

  3. I'll also throw this in from the "insurance questions" group for good measure.

    A Lyft-er asks: How does having insurance work around the $1,000,000 insurance we were told covers drivers and passengers when lyfting... I have my personal car insurance which is full coverage but how will it be affected by lyft?

    Another Lyft-er responds with: The Million Dollar policy kicks in after your coverage, but does not include comprehensive damage at all.

    An employee of the company then responds with: Hi *****you can check out more details on the Driver FAQ :

    Every driver still has to have personal insurance, and the $1M Excess Liability Insurance only kicks in after your personal insurance has either said they will cover none of some of the liability.

    It applies to an incident that occurs while you are on the way to pick up a passenger or have a passenger in the car. It is also designed to cover liability only, not collision or comprehensive, as******mentioned.

    I'm absolutely disheartened that these companies are operating this way and I know that many posts from that group will soon be deleted so as to keep up the good Lyft PR.

    I implore everyone to think about what happens when someone is killed? What happens when someone is maimed or disappears as a result of these services? What will happen with the venture capitalists and their business models then?

    As the old adage goes, "If it's too good to be true, then it probably is."

    I am college educated, am very savvy with tech/social media and have a high IQ (for all the good it does me). I also happen to be underemployed with small children and was hoping that "ridesharing" would help me to fill some monetary gaps and allow a flexible schedule.

    I never in my wildest imagination anticipated the consequences of what I was getting into. Now that I am armed with more information, I heartily admit that I was wrong. Shame on you, Lyft. Shame on most of my fellow Lyft-ers, too, for being so trusting and not reading the fine print whatsoever.

    Ignorance can be very, very dangerous. Something else that I thought of that was bugging me from the beginning is: nowhere in any of the materials or info for Lyft does it ask or mention anything about medications, medical conditions, or even disorders that one might have that would render someone unsafe to drive.

    I wonder if Lyft would hire my friend who suffers from the occasional seizure and takes powerful mood stabilizers? He managed to keep it secret from the DMV so it's not on any of his stuff there and I'm sure that he'd breeze through the Lyft interview process and car check. Scary.

    Thanks for fighting the good fight, Ed. I appreciate what you're doing and will go back to lurking.

    Best regards, Best regards,

    1. This is how business is done in the united states. The food delivery places have been doing this
      for years. Those guys do not have insurance because it is void as they are operating
      commercially. The restaurants wash their hands and say it is not our problem you are an independent contractor.

  4. Very illuminating anonymous and thank you.
    Why don't you come to Metro Cab and "do it with insurance"? We have drivers making lots of money and we don't allow they tipping or any of the other criminal BS that other companies do.
    I started driving temporarily 35 years ago cuz I hated the job hunting process and it has worked out pretty well.

    1. How much are drivers making these days on the day shift? I could use a job.

    2. Call Metro - they're in the phone book.

  5. What is a phone book?