Blossoming ride-share outfits like Lyft, UberX and SideCar got good news yesterday in California, with the state’s Public Utilities Commission unanimously voting to give the companies legal go-ahead to operate as “transportation network companies” - a new category designed specifically to regulate the app-based operations that have been shaking up the traditional taxi industry.
In creating the new category, California will require ride-shares to have company licensing, perform criminal background checks on drivers and carry a $1 million per incident insurance policy. With cities like Seattle currently mulling how to handle their own ride-share explosions, the regulatory model laid out by California could be one soon adopted in other parts of the country.
“This provides more clarity in the market for the community that there are safety standards that we’re following and that we’re being held accountable for — and that this is a positive form of transportation for the state of California,” Lyft co-founder John Zimmer tells Liz Gannes of AllThingsD.
Seattle’s City Council is currently deep into discussions on how ride-shares will be regulated here. According to Taylor Soper of GeekWire, Council President Sally Clark - who heads the city’s committee on taxi, for-hire and limousine regulation - is impressed by California’s new regulations, while admitting that questions remain.
“I can say that based on the draft I read, they’ve adopted a compelling model,” Clark tells Geekwire. “For me, it addresses the insurance concerns, as well as concerns about driver background checks and vehicle safety. However, the draft didn’t address the question of whether rideshare drivers should be licensed in some way. That’s an open question here.”
The Geekwire story also notes that there’s a possibility that ride-shares could be shut down in Seattle while the city establishes its own regulatory framework, or temporary rules could be adopted.
You can read Seattle Weekly’s cover story on the ride-share boom here.