Uber (Mistakenly?) Suspends Drivers for Registering Commercial Vehicles

25 Jan 2015 | Author: | No comments yet »

California DMV changes course, reverses registration policy change for rideshare drivers.

Earlier this month, some UberX drivers in Calfornia found themselves between a rock and a hard place: The state started requiring ridesharing service drivers to register their cars as commercial vehicles, but Uber in turn suspended some drivers who did just that.California has retracted a notice that said private drivers for ride-sharing companies such as Uber Technologies Inc. and Lyft Inc. must have a commercial license plate or risk getting a citation.SAN FRANCISCO (CBS SF) — Uber has allegedly been under fire for suspending some of its drivers after complying with advice from California officials.

However, according to the San Francisco Chronicle, California’s Department of Motor Vehicles has since reneged on its earlier policy decision, and has dropped the commercial registration requirement. We suspect these Uber contractors’ driving privileges will be restored fairly quickly, however; though Uber isn’t saying a lot about the issue, the company sent a statement over to Gizmodo suggesting that this deactivation shouldn’t have happened. “How a driver registers his/her vehicle is up to that driver. Jean Shiomoto, director of the DMV in Sacramento, said in a Jan. 23 statement that the agency is rescinding the alert because of uncertainty about how the law relates to more recent regulations affecting ride-share operators. 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.

But according to BuzzFeed, UberX drivers who complied with the DMV’s policy found themselves running afoul of Uber’s own policies, which state that UberX drivers need to have a non-commercial auto registration. 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,” said statement reads. “We are showing your vehicle registration is actually a commercial vehicle registration. 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. Lawsuits against Uber, Lyft and other car-booking companies have mounted this year as they seek to crack open the U.S. taxi and limousine market, estimated by IbisWorld Research to be an $11 billion industry.

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. But Uber said their drivers are allowed to use personal plates adding that the DMV has yet to recognize new legislation passed by Governor Brown which would authorize this. The story behind the story: Local and state governments and regulatory agencies are still trying to figure out how to treat ridesharing services like Uber and Lyft, which fall into something of a gray area—they’re not quite taxis, but they still compete with taxis.

Uber, founded in 2009, is the most highly valued U.S. technology startup. “We jumped the gun, and we shouldn’t have,” Shiomoto said in the statement. “The matter requires further review and analysis which the department is undertaking immediately.” 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. So why, then, are Uber drivers even switching from personal to commercial vehicle registration—especially since it costs more, and typically requires much pricier commercial insurance for the vehicle itself? 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.

However, there remains uncertainty about the interaction and effect of this law governing vehicle registration requirements with the more recent regulatory and statutory changes affecting ride share operators.

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