Almost two years ago, the California Public Utilities Commission broke new ground when it established rules for upstart ride-hailing services Uber and Lyft. When the two San Francisco companies have battled with regulators nationwide, they’ve often pointed to the California rules as a model, and many other jurisdictions have followed similar frameworks. Both companies have flourished in California and elsewhere under rules more liberal than those for taxicabs, allowing them to set their own rates, for instance.
Now the state is considering having the California State Transportation Agency take over implementation and enforcement of those rules, as well as crafting new ones. A draft proposal to reform the PUC unveiled Monday calls for the Department of Motor Vehicles to oversee licensing, registration and evidence of insurance for ride-hailed drivers, while the California Highway Patrol would handle enforcement and “select investigations.” Both organizations are part of the state’s transportation agency.
One aspect of the reform seems unclear: The governor’s office said the PUC would still write rules for Uber and Lyft, but lawmakers involved in overhauling the agency said it would not.
However, Assemblyman Mike Gatto, D-Los Angeles, who is taking a lead on the ride-hailing revisions, said the DMV and Highway Patrol would be empowered to draw up new regulations for Uber and Lyft — and that it’s not a stretch for them.“Rule-making would remain at CPUC,” said Evan Westrup, a spokesman for Gov. Jerry Brown, in an email.
“The DMV absolutely promulgates regulations,” he said, pointing to its rule-making on various driving issues. “Every state agency within the executive branch does.”
Having the CHP involved is a plus, he said. “For anyone who says we need stricter background checks (for Uber and Lyft drivers), we’d be giving (that decision) to a law enforcement agency to handle,” Gatto said.
Sen. Jerry Hill, D-San Mateo, had a similar take. “I think all of the regulatory aspects can go and should go to the other agencies,” he said. “They can do a better job of it, because they’re focused on transportation.”
Existing regulations would remain in place, a crucial point for companies that need to know the rules of the road. Uber and Lyft have made clear that they prefer statewide rules to the patchwork of local regulations that govern taxicabs. Any changes are probably more than a year away.
Experts said that proposed division makes sense. “The move takes advantage of each agency’s existing infrastructure and goals,” said Susan Shaheen, co-director of the Transportation Sustainability Research Center at UC Berkeley, while noting that it’s too soon to know the full implications of the proposed changes.
PUC President Michael Picker, who in March told lawmakers the agency is overburdened and he finds himself “underwater on a daily basis,” said that overseeing ride services is burdensome and suggested the DMV and CHP as alternatives.
Uber and Lyft each issued noncommittal statements saying they look forward to learning more about the proposed reforms. Both companies have shown increasing finesse in navigating the halls of the Capitol in Sacramento and fine-tuning legislation that affects their businesses.
Last year, the DMV made headlines with a short-lived finding that Uber and Lyft drivers should obtain commercial license plates. That ignited a firestorm of controversy, with Republican lawmakers saying they’d enacted legislation to negate the “nonsensical” interpretation of a 1935 state law. The DMV then backtracked and said it would subject the matter to further analysis.
“The DMV has certainly made some bad decisions I haven’t approved of,” Gatto said. “But whenever you have a change, you’re hopeful it will work.”
Carolyn Said is a San Francisco Chronicle staff writer. Email: Twitter: @csaid