establish a set of regulations on the bevy of new companies that summon rides-for-hire via smartphone apps. Most prominent among such services are Lyft (a pure “rideshare” in which the fee you pay is officially a donation) and Uber (which offers various services in 31 cities in the Americas, including ones that summon taxi cabs, some that send licensed limo drivers, and some that just send, like Lyft, private individuals in their cars).Last month, California became the first state to
The regulations from California’s Public Utilities Commission (CPUC) came in the face of lots of heated opposition to these services on the part of existing licensed and regulated taxi drivers, who hate the competition. Sometimes that opposition is expressed through political activism, such as hundreds of drivers protesting the very existence of the services in Los Angeles—a city that briefly tried to ban them entirely.
Los Angeles City Councilman Paul Koretz, even after the CPUC promulgated its regulations, has been making noises about legally challenging the state’s ability to regulate those services against the city’s wishes. Koretz still sounds like he’d rather the services didn’t exist, no matter how many consumers want them or how many people make their living from them.
Sometimes, as I learned from interviewing an Uber driver and a Lyft driver from the San Francisco Bay area, that opposition from traditional taxi drivers who see their turf threatened can get quite personal. I’ll call them “Tim” and “Jess” as both wanted to remain anonymous because their business is very public.
Each driver has a profile and rating through the app that allows every customer to know exactly what person and vehicle they are dealing with, and how other customers have rated them. Uber driver Tim finds the Uber lifestyle—he works when and how long he wants—suits his desire to not deal with “authority figures” and be “micromanaged.” He says he sees visible hostility from cabbies regularly.
Lyft driver Jess got involved because she needed a flexible moneymaking gig while she launches her own business—and because her 11-year-old daughter became obsessed with the big pink moustaches on cars that are Lyft’s cutesy identifying mark. Jess tells me of a fellow Lyft driver who lost his personal insurance because an angry cabbie sent photographic proof of the incriminating pink moustache—showing that he used what he told the company was a personal vehicle as a vehicle for hire, something the companies don’t cover in personal policies—to every insurance company he could think of.
Part of the new CPUC regulations require companies to maintain a million dollar per incident insurance on each vehicle in this new “TNC’ classification (for "Transportation Network Company"). The CPUC says that Lyft and Uber have already been doing so under an agreement that has kept them operating pending these new regulations, though neither driver I talked to felt confident about that and knew their personal insurance would not cover any incident occurring while they were driving professionally.
Jess personally says she gets “flipped off by cab drivers. I just smile at them. I kind of empathize with their position but the stories I hear of bad experiences with SF cabbies—they are not nice, demand cash, don’t show up—honestly I feel they created this situation themselves, they created a need for a new system.”
The cruel market forces of the apps make drivers obsessed with perfection. Both services have public passenger ratings of drivers and anything even slightly less than a perfect five can harm their ability to get riders. Tim and Jess both say that the fact that they don’t have visible running meters—which would make them taxis—means there can sometimes be real sticker shock for Uber riders, or a recommended price that strikes the rider as too large, for Lyft. In the information-rich world of Lyft, a driver can ensure if they wish that passengers with records of paying below any given percentage of donations won't have their ride requests received by the driver (though drivers can never know the specific payment records of specific passengers).** Jess says “that little tidbit needs to be out there. Passengers should know that if they pay much less than recommended, they do hurt themselves.”
[Related: Uber Wars: How D.C. Tried to Kill a Great New Ride Service. Story continues below video.]
CPUC’s regulations are not designed to make these services impossible. They will, to quote the regulations, “require a criminal background checks for each driver, establish a driver training program, implement a zero-tolerance policy on drugs and alcohol, and require insurance coverage” and make drivers “register in the Department of Motor Vehicle (DMV) Pull Notice program, conduct a 19-point car inspection, and require a one-year driving history from the driver.” Many words in the regulations are concerned with making sure the app-driven driving services are sufficiently accessible to the disabled. The TNCs must pick up only prearranged fares via apps, never street hails.
The new regulations requirement for registering as a TNC will not go into effect for 60 days after their September 19th issuance, so both drivers say they haven’t yet been affected by them. The regulations and the medallion system for regular cab drivers discouraged Tim from entering that system. But even getting his state charter party carrier license to be an official limo driver for the UberBlack service, “you couldn’t get any more anti-big government after trying to go through all that bureaucratic red tape” —cost many months and many thousands of dollars, he says.
“I’ve had this conversation with a few passengers,” Tim says. “I used to be a lifelong Democrat, but I’m probably voting Libertarian now, to be honest. I’m starting to feel the pains of Joe the Plumber—it’s like I’m Tim the Driver.” But even after they are fully regulated, forget about one of the most lucrative services for hired drivers in urban areas, airport drop offs and pickups. Those are still illegal unless you go through another time-consuming wait to get approved by the airport authorities, and give them their substantial cut.