(FOX/CNS) The Los Angeles City Council has decided NOT to appeal the state Public Utilities Commission's regulations allowing smartphone-enabled rideshare services like Lyft and Uber to operate in California. With Mayor Eric Garcetti threatening to veto a council action calling for an appeal, the council opted instead to propose modifications over the coming month as the PUC works to fine-tune its rules.
Mayor Eric Garcetti has indicated he would veto a city appeal of the
regulations, according to Michael Nagle, a city attorney who advises the
Transportation Department. The attorney said if the council votes tomorrow to
pursue the appeal, it would not have time to override a mayoral veto in time to
meet the state deadline.
Representatives of Lyft did not respond to questions about the city's possible appeal of the PUC regulations. A representative of UberX declined to respond prior to any decision by the City Council. Even though the PUC does not categorize ridesharing services as taxi companies, Koretz believes the services are taxis in disguise.
"Essentially what they are doing is legalizing bandit cabs," Councilman Paul Koretz said of the PUC's new rules.
State law reserves a city's right to regulate the taxicab industry, according to Koretz's motion.
By approving the new rules, the PUC "created a new class of for-hire transportation service" that cannot be regulated by the city and would be "unfairly competing with existing locally regulated taxi services," the motion states.
Koretz said the PUC does not have enough investigators to enforce its
"They're not going to do anything to actually make (the requirements)
happen, as a practical matter," he said, adding that "it makes a lot more
sense to have local control."
He also questioned whether background checks will be thorough enough to
protect the public's safety.
"When you have the first serial murder or rapist ... they're going to
look back and say the PUC screwed this up and the city screwed this up," he
It remains to be seen if Mayor Eric Garcetti, a supporter of the app-enabled ridesharing services, and the state's regulations, would endorse an appeal of the new rules.
"The mayor so far likes the idea" of the rideshare services, Koretz
said. "I think he likes the high-tech elements to it that are the positive. I
don't think he's given a look at the liability of the dangers that are
Mayoral spokeswoman Vicki Curry said the mayor's office will be
monitoring the City Council's discussion of the potential appeal. The mayor is
also working to address the taxi industry's concerns, she said.
Rick Taylor, a spokesman for Yellow Cab, said this week that the company
plans to appeal the new rules.
"Your entire (taxi) franchise system is under attack," Dominick
Rubalcava, an attorney and lobbyist for Yellow Cab, told the city's Taxicab
Commission last week.
The commission, formed in 1998, oversees a franchise system that allows
nine taxi companies to do business in Los Angeles. Regulation was previously
handled by transportation commissioners.
The state Public Utilities Commission last month signed off on
regulations that classifies phone-app enabled rideshare services as
"transportation network companies." Such companies allow people in need of
rides to use a downloadable smartphone app to make arrangements with those
willing to drive them to their destinations, often for a fee.
Under the new PUC rules, the rideshare companies must get a license from
the PUC, require criminal background checks of drivers, create a driver
training program, adopt a "zero-tolerance" policy on drug and alcohol use,
buy commercial liability insurance policy with a minimum $1 million coverage
and do a 19-point car inspection.
Tom Drischler, administrator for the city's taxicab franchise system,
told the taxicab commission last week that the state's laws are unclear on
whether drivers for rideshare companies will be required to get commercial
insurance, which cost between $5,000 and $7,000. Drivers for those companies
might actually be free to purchase personal insurance instead, he said.
There are also no requirements on the age of vehicles, and the only enforcement measure in place for the "zero-tolerance" policy on drug and alcohol use is an online complaint board, he said.
The rideshare app companies are required to do criminal background
checks but do not need to take fingerprints of drivers, a step that is required
under city rules, Drischler said.