California DMV: Uber, Lyft Cars Ought to

25 Jan 2015 | Author: | No comments yet »

California DMV retracts memo requiring commercial plates for Uber, Lyft.

CALIFORNIA — Private drivers for ride-sharing companies such as Uber Technologies and Lyft must possess a commercial license plate to operate in California under an 80-year-old law or face getting a citation, the state said. SAN FRANCISCO (CBS SF) — Uber has allegedly been under fire for suspending some of its drivers after complying with advice from California officials.California’s burgeoning efforts to regulate ride-for-hire companies like Uber and Lyft have reached a fork in the road after the Department of Motor Vehicles issued an advisory requiring commercial registration, a move that threatens to upend the companies’ business model.Orlando’s new regulations on ride-sharing companies like Lyft and Uber are drawing fire from the Washington D.C.-based Internet Association, a national lobbying group that has major tech companies as members.

The advisory provoked an outcry both from companies who see their basic structure imperiled and from California lawmakers who, having just moved to regulate the rising industry, protested that the DMV was applying outdated rules to a new kind of business. The ordinance sets a “dangerous precedent” that treats entrenched corporate interests favorably, according to a Jan. 21 letter to Mayor Buddy Dyer from Michael Beckerman, president of the association. “This ordinance looks to treat ridesharing platforms the same as taxis but ridesharing is different,” Beckerman said. “Ridesharing partner drivers often work part time, which is in stark contrast to the extended utilization of a taxi. Some analysts had predicted the business implications, including requirements like commercial insurance, could be a game-changer for the embattled rideshare industry. However, Ken Bensinger, an investigative reporter BuzzFeed News, said Uber has been taking the opposite stance and has been telling their drivers that they should register their vehicles as personal. Conceived as an alternative to taxicabs, firms like Uber, Lyft and Sidecar allow people to use their personal vehicles to transport customers who have hailed a ride using a smartphone app.

Uber, in a statement yesterday (Jan 23), said California’s Public Utilities Commission has ruled that only a personal registration is needed and that a law signed by Governor Jerry Brown last year affirmed that decision. In a memo issued this month, the DMV cited the California Vehicle Code and said “any passenger vehicle used or maintained for the transportation of persons for hire, compensation, or profit is a commercial vehicle. On December 15, the City Council adopted new rules that will take effect Feb. 1 – a minimum fare of $2.40, similar to taxis, and permitting fee of $250. If Uber drivers are required to obtain commercial auto insurance, it could increase costs, because that coverage is more expensive than the personal insurance many ride-share drivers now carry.

Even occasional use of a vehicle in this manner requires the vehicle to be registered commercially.” A DMV spokesman said the memo is a “reminder” of an existing law on the books since 1935. This program encourages drivers to register their cars as personal vehicles, but some participating dealerships ignored that and recommended that people register according to the law: as commercial cars.

Under existing California law, a vehicle required to have a commercial plate doesn’t necessarily have to carry commercial insurance, said Ms Nancy Kinkaid, spokeswoman for the California Department of Insurance. Representatives of the rideshare groups told The Times on Friday that they didn’t believe commercial plates should be required for part-time and occasional ridesharing drivers. Heather Fagan, deputy chief of staff for the mayor, said in an emailed statement that Orlando is proud to be one of about 15 cities in the country that has a special ordinance to address ride-sharing companies, calling it a progressive change. “We continue to work to make the process easier for everyone. Passengers and drivers link up using mobile apps from the ride-hailing companies, which also contract with the drivers and handle the financial transactions.

We are unable to accept commercial registration on an uberX account.” One Southern California auto dealer who has sold numerous cars through Uber’s finance program but insisted on registering the cars as commercial vehicles said that roughly a dozen UberX drivers called the dealership in a panic because they’d been suspended for the same reason. Under the law, ride-share companies operating in the state must provide at least US$200,000 (S$268,920) of insurance when a driver is on duty and US$1 million of coverage when the driver has picked up a customer. Fearful they’d have to give up their cars because finance payments are deducted automatically from their Uber earnings, several of those drivers decided to switch to personal registration, the dealer, who requested anonymity, said. A related fight over companies like Airbnb, which permit users to rent out their apartments for short-term stays, looks likely to descend on the state Capitol this year.

Wilk said a personal policy might cost $800 to $1,200 a year, while a commercial policy can cost two or three times as much because it anticipates that a driver will be using his or her car more often and be at greater risk of having an accident. Last year, lawmakers passed a bill treating transportation network companies a little more like taxicabs by requiring them to carry more extensive insurance.

I’ve asked Uber whether it plans to pay the legal bills for drivers who are ticketed for violating California vehicle registration laws, and will update if I hear back—even if Uber does plan to shell out if a crackdown goes down, the $41 billion dollar company should not be hanging drivers out to dry like this. Members of the Assembly Republican caucus sent a letter to the DMV lambasting the memo, arguing that, “Eighty years ago this interpretation was likely sound. While it’s heartening that this is NOT company policy, it’s strange and difficult to swallow that there could be so much confusion that drivers were suspended in the first place. Uber does not require a driver to register his/her vehicle as personal, and it is not our policy to deactivate a driver for registering his/her vehicle as commercial.”

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