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Tuesday, May 14, 2013

State Cracks Down on Ridesharing Services Again Over Questionable Policies

Posted By on Tue, May 14, 2013 at 10:45 AM


Over the last few months, San Francisco car-hire start-ups have been giddily plowing into new markets and introducing a raft of new services. Facing stiffer competition from SideCar and Lyft, Uber unveiled its own ride-share service, UberX in April.

"We're seeing a ... policy of non-enforcement in a number of cities," founder Travis Kalanick announced in a telephone press conference. He said that Uber conveniently equated "non-enforcement" with "tacit approval."

But tacit approval may no longer be forthcoming in the start-ups' home town of San Francisco, where an ongoing California Public Utilities Commission proceeding has required various ride-share companies to produce proof that they're actually playing by the rules. Although the CPUC granted Uber and Lyft a temporary reprieve via a settlement in January, an administrative law judge has now asked them to produce sealed copies of both their umbrella and excess liability insurance policies, as well as proof that they are providing worker's compensation for employees, as required by the California Insurance Code.

The order affects all start-ups that the CPUC has identified as New Online-Enabled Transportation Services (NOETS), a clunky name it coined because many of them object to the term "rideshare."

Administrative law judge Robert Mason issued the ruling as part of an ongoing rule-making process that will ultimately decide whether Uber, Lyft, SideCar, Tickengo, TransForm, and InstantCab have to abide by the same rules that govern traditional taxis. The start-ups have long argued that they hew to a different model more based in the tech industry than the transportation sphere. Uber's general manager Ilya Abyzov insists, for instance, that the company's employees are its engineers, and the drivers are merely hired guns. Thus, he said, the company had no obligation to produce evidence of workers comp for anyone operating an UberX vehicle.

Lyft spokeswoman Erin Simpson said, similarly, that while Lyft certainly has workers comp for the employees who handle marketing, engineering, and development, "that doesn't extend to people who use the driving platform." Both Uber and Lyft maintain that the excess liability policies they've already submitted should be enough to comply with the current agreement -- at least until permanent rules are established. SideCar still hasn't found a middle ground with the commission, leaving it on the hook for a $20,000 citation foisted on all rideshare startups in November.

Judge Mason didn't return calls to say whether or not he'd accept the independent contractor defense and absolve Uber and Lyft of the workers comp requirement. Yet other parties have also weighed in, expressing concern over what could happen if rideshare start-ups really are tasked with handling San Francisco's transportation needs.

In a motion submitted on April 25 -- just a couple weeks before Mason's May 10 ruling -- Melissa Kasnitz of the Center for Accessible Technology asked whether the startups are equipped to handle disabled passengers -- a group that includes wheelchair users, people with service animals, and folks who need screen-readers to use an app on their phones. Such customers are traditionally harder to serve, she says, and they wouldn't be well-suited to an industry that relies on rating systems, wherein drivers and passengers freely evaluate each other.

"These services talk a lot about rating [systems] and how that enhances their services," Kasnitz said in an interview. "But we're concerned that people with disabilities might get a poor rating -- and that, for discriminatory reasons, it might be more difficult for that person to get a ride in the future."

Abyzov said that Uber has taken pains to make its service more accessible, but that it's been stymied by the SFMTA, which won't allow the company to accept payments with paratransit debit cards. Lyft punted questions over to its legal counsel, who has yet to respond.

The startups have until May 31 to submit filings to Mason, at which point discussions about accessibility and other regulatory snafus will likely pick up steam. One thing is certain, though: If Uber, Lyft, and SideCar become the default mode of transit in San Francisco, they might wind up making a variety of concessions. High-tech razzle-dazzle may ultimately take a backseat to the unglamorous chore of serving everyone, and treating every worker fairly.

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About The Author

Rachel Swan

Rachel Swan

Rachel Swan was a staff writer at SF Weekly from 2013 to 2015. In previous lives she was a music editor, IP hack, and tutor of Cal athletes.


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