Uber And Lyft Regulation News: Carpooling Wins in California

The Uber logo is seen on a vehicle near Union Square in San Francisco, California May 7, 2015. |

Ridesharing services being provided by two companies, Uber and Lyft, recently got a boost from government regulators in California. According to a Fortune report, the California Public Utilities Commission formally approved "faresplitting" which is their technical term for carpooling services provided by Uber and Lyft.

The commission also passed new regulations for such services, which include a conspicuous display of the company logo on the cars, stricter background checks especially for services that transport minors, and more reporting requirements for the companies behind the services. According to the report, however, the whole idea of carpooling was already in place in 2014, as customers who shared a ride along the same route can end up paying less.

The vote of approval is said to be huge victory for both Uber and Lyft, as they have been struggling with regulation issues, not only in California, but also in other states such as Florida and even Toronto, Canada. In California, both companies earlier provided services similar to taxis and were seen by taxi drivers as their main competition. Later on, carpooling became popular accounting for almost half of the total Uber and Lyft rides in their respective areas.

The case of California, according to a report in Tech Crunch, is one that has the presence of three factors that contributed to the success of services such as Uber and Lyft. Regulatory change was made possible because there was political support for local industry, there was a clamor for better taxi transport services, and there were "regulatory gray areas" especially in jurisdictions.

In the case of Florida, according to a report in WUSF News, both companies are still subject to local government regulation because the state legislature could not agree on how statewide regulations will go. This is after the House and the Senate were at odds on how to approach the issue. The House already proposed that both companies be put under state regulations rather than local government ones. The Senate however voiced its concern with the liability insurance of Uber drivers. If the House had its way, it would be up to the Department of Highway Safety and Motor Vehicles to impose regulations.

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