California Regulators Propose New Round of Rules for Uber, Lyft

Nearly two weeks after California regulators struck Uber with a $7.6 million fine, the California Public Utilities Commission has proposed an updated set of guidelines for ride services that stop short of requiring more rigorous background and fingerprint checks for drivers.

But other proposed rules would tighten restrictions on vehicle inspections and require proof of commercial liability insurance. The regulations also propose giving the commission's blessings to ride-service carpools, but transportation network companies, as they're called, would have to show how they calculate split fares.

The regulations would require that ride-service vehicles be inspected annually, or every 50,000 miles, at a facility licensed by the California Department of Automotive Repair. Companies would need to maintain inspection records on each vehicle for up to three years.

Commissioner Liane Randolph wrote that since Uber claims its UberPool service reduces drunken driving deaths and injuries, companies would be required to submit reports that prove "their fare-splitting operations have had an impact on reducing traffic-related injuries," along with evidence of how the service impacts the environment.

Since the companies have mostly refused to publicly release trip data, little proof has been available in cities like San Francisco to show how ride services are contributing to congestion and affecting the environment.

But that could change soon, as researchers at UC Berkeley and the Natural Resources Defense Council embark on the first widespread study of ride services in big cities, including New York, San Francisco and Los Angeles.

Randolph wrote that services such as Shuddle, which transports unaccompanied children, should require fingerprint-based background checks using Trustline. But she did not propose fingerprint checks for all ride-service drivers, something taxi drivers are required to do.

Shuddle, in its response to regulators, questioned the accuracy and timeliness of federal and state databases used by Trustline. Randolph said regulators would decide whether to require mandatory fingerprint checks for services that transport minors in the next round of regulations, but said Shuddle is free to use another service.

Hansu Kim, the president of San Francisco's Flywheel Taxi, said he's concerned the new regulations don't put a cap on the number of ride-service vehicles, and called a proposal to allow rented vehicles to enter the market "frightening" for the taxi industry.

"This opens the door for other people to get into the taxi-leasing business," said Kim. "It is really staggering right now that we have less than 2,000 taxicabs and more than 20,000 Ubers working in San Francisco."

Uber has not officially released numbers on how many drivers work in San Francisco, but has said it has 20,000 drivers in the Bay Area.

General Motors recently announced it was investing $500 million in Lyft and launching a new rental car service for Lyft drivers.

The rules would also require that ride-service vehicles have clear identifying displays on both the front and rear of the vehicles, so other road users know the vehicles might stop unexpectedly.

"Drivers, motorcyclists and bicyclists alike will be able to set more accurate expectations of driver behavior and act accordingly if they know they are behind an active TNC vehicle," Randolph wrote.

Company officials at both Uber and Lyft said they are reviewing the new regulations, but did not immediately offer any detailed responses to the proposals.

"The CPUC's proposed decision allows for continued innovation in transportation like Lyft Line, which expands carpooling by allowing consumers to share rides and cut costs," said Chelsea Wilson, a Lyft spokeswoman. "We'll continue working with the commission to encourage the development of smart and effective rules for ride-sharing."

The California Public Utilities Commission is scheduled to take up the proposed regulations as early as February 25. You can read the full set of guidelines here.

Correction: This story has been updated to reflect that the proposed regulations were issued by Commissioner Liane Randolph, not Judge Karen Clopton.