LA to consider appealing state rules on rideshare app services

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A Lyft driver with the Lyft pink mustache on her car. (Photo credit: Lyft)

A Lyft driver with the Lyft pink mustache on her car. (Photo credit: Lyft)

LOS ANGELES (CNS) – Los Angeles City Councilman Paul Koretz will ask his colleagues next week to join the taxi industry in challenging new regulations allowing phone-app-enabled rideshare companies such as UberX, SideCar and Lyft to operate in California.

The City Council was expected today to discuss a motion by Koretz that would instruct the City Attorney to submit the “necessary filings to preserve the city’s right to appeal” the California Public Utility Commission’s decision, but the council pushed back the discussion until Tuesday.

Opponents of the regulations have until Wednesday to submit their request to have the PUC reconsider the new rules, which were approved in September. This step is necessary to launch future legal appeals in court, city officials said.

Representatives of Lyft and UberX did not respond to questions about the city’s possible appeal of the PUC regulations.

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,” 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 own rules.

“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 said.

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 present.”

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 Thursday.

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 Thursday 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.

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