Lyft and Sidecar can continue operating as legitimate businesses in California, but they'll have to abide by the CPUC's new regulations which were approved in a decision Thursday.
Under the newly approved rules, "rideshare" apps which allow users to summon a participating driver to get them from point A to point B are now classified as Transportation Network Companies (TNCs), a newly created regulatory category that has a whole new set of rules.
What does this decision mean for California riders and drivers using these TNC services?
TNCs Are Not "Rideshare" Services
Despite being billed as such, the California Public Utilities Commission has made it final that companies like Lyft and Sidecar do not qualify under the state's rideshare exemption (see California's PU Code § 5353(h)).
The main issue is that this kind of app-based transportation is primarily for profit, despite flimsy attempts to sidestep this by calling payments "donations." It isn't the same as a vanpool or even an agreement to share costs with co-workers in a carpool.
CPUC said as much when they issued cease-and-desist orders to these companies in December 2012, and the Commission's position hasn't changed.
New Rules for Sidecar and Lyft
What has changed is the CPUC's allowance of a new category of commercial transportation, TNCs. A TNC differs from taxis and limo services because a TNC driver cannot:
If you're wondering why we haven't mentioned Uber, it's because the new TNC regulations won't include them (they have their own fleet of non-personal vehicles).
Starting immediately, eligible Transportation Network Companies (TNCs) like Lyft and Sidecar must require drivers to:
Since legal squabbles over these services across the nation have focused largely on safety the CPUC also requires each TNC to implement the following:
The newly approved regulations will also require reporting and monitoring of driver safety from each approved TNC, in addition to 1/3% of revenues going toward the state.
So Californians may legally continue to use Sidecar and Lyft, but without the legal ambiguity, the thrill may be gone.