California’s ridesharing services claimed a significant victory today: The California Public Utilities Commission (CPUC) has unanimously voted to legalize services like Lyft, Sidecar, and Uber‘s UberX, which will be classified under a new category of public transportation called “transportation network companies.”
Ridesharing services have only begun to gain popularity in the past two years. During that time, CPUC and similar agencies in other states had largely chosen not to enforce against these services, much to the dismay of many taxicab and limousine companies, who complained ridesharing operations should not be allowed to operate because they weren’t properly licensed. But because nothing like these companies had existed before, it was difficult to justify they should automatically be classified as taxicab companies.
However, CPUC’s indecision about how to identify services like UberX, Lyft, and Sidecar didn’t stop the Los Angeles Department Of Transportation from issuing cease-and-desist letters to all three companies earlier this summer. The services kept running, however, as each had secured separate CPUC permits allowing them to operate in the city.
Not many details are available at this time about what the regulatory framework for the newly created “transportation network companies” category will look like, but we do know rideshare companies will be required to have $1 million in liability coverage for its drivers, who will also need personal insurance.