California deems carpooling via all ride-share services illegal

http://www.cnet.com/news/california-deems-all-ride-share-carpooling-services-illegal/

by taytus • 12 years ago

233 150 12 years ago

tswartz2• 12 years ago

Frustrating to see another letter from CPUC trying to slow Uber and Lyft down. How can CPUC deem this a bad thing? Carpooling means less ubers/lyfts on the road so less traffic and pollution. I've used Lyft Line numerous times and really enjoy it.

kevinkimball2• 12 years ago

why does CPUC care about traffic or pollution?

hack_edu• 12 years ago

Most likely because they are the office of government in charge of administering the roads...

sliverstorm4• 12 years ago

the CPUC says that under California law it's illegal for these ride-sharing services to charge passengers an individual fare when carrying multiple people in one vehicle.

It seems pretty clear to me. CPUC isn't against multiple passengers in the same car. They are against billing those passengers individually, for whatever reason that rule was originally enacted. Perhaps to prevent cabbies from charging pairs of passengers $4 each when a single passenger would be charged $5.

spindritf• 12 years ago

Maybe I'm missing something but this doesn't really make the issue any clearer. Why? What's the rationale?

And why is tswartz being downvoted?

tswartz2• 12 years ago

So if it is illegal to charge people individually to carpool, how do the airport shuttle vans operate? [serious question]. They charge everyone separately and everyone rides together.

conductr• 12 years ago

Seems like they could just structure the "billing" of one person for full fare, then assist/force the other passengers to reimburse the paying party. Loophole?

glenra3• 12 years ago

for whatever reason that rule was originally enacted

Most likely the law is simple protectionism for unionized bus drivers, to stop private jitneys from putting them out of business. The use case is: you commute every day from point A to B, so you go along El Camino following the bus route, picking up people FROM BUS STOPS to share your ride and charging them what the bus would have charged. This is great news for the bus riders - they don't have to wait for the next bus so they get to their destination quicker - but if it catches on the bus lines ride empty, lose more money, and eventually political support for the bus route goes away.

Perhaps to prevent cabbies from charging pairs of passengers $4 each when a single passenger would be charged $5.

Nah, that's not it. Normal cabbies (that use a taxi meter) have no flexibility over rates - the whole point of the meter is to make sure they're paying the right amount of taxes and kickbacks; accepting any extra regular fare (other than tips) would be illegal.

anigbrowl• 12 years ago

It's not so much that they're deeming it a bad thing, as that nobody bothered to consult them before going live with the service, as they are legally required to do.

If people have a problem with a service and don't get satisfaction, they (or their attorneys) typically call up the CPUC and say 'why are you letting company X get away with this?' which is why companies are supposed to apprise the CPUC of what services they're offering in advance.

I'm not a big fan of CPUC (for example I think they have far too cosy of a relationship with PG&E), but they're not making it up as they go along.

dragonwriter6• 12 years ago

How can CPUC deem this a bad thing?

CPUC isn't deeming it a bad thing, its deeming it an illegal thing. While part of what the CPUC does is adopt regulation, this isn't that kind of action -- this is the CPUC looking at the law adopted by the legislature that it is charged with enforcing, looking at the action going on, and saying "this action does not comply with the law; under the law as it stands, you must apply for a different permit to do this action. Or you can ask the legislature to change the law."

This is not a judgement of good/bad. (You will find such judgement in regulatory actions where, given the law, the CPUC must choose what regulations to adopt to implement the law given the discretion it has within the law.)

andrewguenther• 12 years ago

They didn't get the permits they needed to run the service. I'm getting so sick of people whining every time "the man" steps in to enforce the rules which these "disruptive technologies" didn't even bother to read. Not every law is absurd and intended to block innovation. C'mon people, it's just a fucking permit.

glenra3• 12 years ago

Maybe not every law is absurd and intended to block innovation but these laws most certainly are. It's a permit that the authorities don't have to grant and won't grant in exactly the cases where the new service is most needed. These laws are intended to preserve for existing bus drivers and cab drivers some monopoly power that they haven't earned via providing reliable superior service.

CodeWriter232• 12 years ago

The law exists so cabs don't charge per person. Pretty simple if you ask me.

o0-0o• 12 years ago

Then how are the Google and Faceblock buses legal?

sliverstorm4• 12 years ago

Because they are busses, not carpools?

TallGuyShort2• 12 years ago

They're not charging individuals fees. I don't understand all the intricacies of how they're breaking the law (I posted a separate question about how Super Shuttle has been around so long) - but Google and Facebook buses aren't doing it as a business.

dragonwriter6• 12 years ago

Most likely, they aren't Charter Party Carriers -- their purpose and operation in general don't seem like that kind of carrier -- and therefore aren't covered by the laws that restrict what Charter Party Carriers can do, but by entirely different sets of rules.

saosebastiao• 12 years ago

Someone, at some point in time, wrote this law. I would like to know what use case they had in mind when they decided this was a bad thing.

ddebernardy• 12 years ago

Possibly something written a century ago to thwart jitneys from getting in the way of public transportation systems:

http://paleofuture.gizmodo.com/uber-is-currently-fighting-th...

CodeWriter232• 12 years ago

To prevent your cab or limo driver from reading the fare, then multiplying it by the number of bodies in the car.

patcon• 12 years ago

Somebody please create a p2p ridesharing network and let's be done with the regulatory theater and jockeying of overvalued companies

superuser2• 12 years ago

These have existed since the early days of the internet, and before that in bulletin board form. In fact, many were (are?) even run by state transportation departments.

baddox• 12 years ago

Like jitneys? They had their own share of legal troubles as well.

WorldWideWayne• 12 years ago

I think he probably means something that is a little more comprehensive and with higher visibility than the forum style ones like Craigslist or whatever.

jmckib• 12 years ago

Wouldn't any such network need to collect a percentage of each transaction? Otherwise, what's the incentive to run the network competently?

sliverstorm4• 12 years ago

Advertisements. See: Craigslist

steveplace• 12 years ago

* ridester.com

* zimride.com

* erideshare.com

ngokevin• 12 years ago

and ridejoy.com (YC-backed and failed).

And my friend made https://github.com/thedjpetersen/ridezap_os

And I've seen countless school projects trying to address ride-sharing.

I don't think it will ever catch on.

gasull• 12 years ago

Take a look at OpenBazaar:

https://github.com/OpenBazaar/OpenBazaar

narrator2• 12 years ago

Napkin design for a p2p ridesharing network: Create a cryptocurrency. Send a message with a bid for a ride to a new address that you control with the start and end point locations with how much you want to pay. Insert it in the blockchain. Driver sees bid in block chain and answers with a similar self message and arrives. When the driver arrives, transfer half to him and the other half when you get out.

panarky• 12 years ago

Anonymity is tough with physical stuff like cars and passengers. All the CPUC needs to do is have one of their people pretend to be a passenger and you're busted.

balloot2• 12 years ago

Napkin ways to completely blow this up:

1) Write a script to answer requests without ever intending to pick up.

2) Get out of the car, don't transfer the other half.

3) Sign up as a driver, and wait until you find an attractive/rich fare. Lock doors and do what you will.

Deregulation is not the answer for everything. Uber/Lyft works precisely because they are very well regulated to stop the cases I outline above, and more.

adamjs4• 12 years ago

As much as I love the idea of true peer-to-peer decentralized marketplace, it's a pipe-dream and I'll explain why.

- Every node is potentially untrustworthy therefore additional verification must be performed on the results of any query. To verify a piece of information, a "paper trail" must be transmitted as well (who created what when).

- This overhead causes information to move much more slowly in a system (if at all, if the threshold is set too high it's possible for all queries to fail).

- To counter this cost, each node can build its own map of trusted nodes based on the validity of previous information. This "network of trust" can be used to throttle the amount of verification performed.

- To illustrate, let's take what happens if you're totally new to a fully decentralized ridesharing platform. You start off not knowing any of the other users (nodes) and so you select a few at random (trusting all mutually), perform a query on all nodes and select the driver with the best rating (according to popular rating from those few users). You take a ride from that driver, have an awful experience, and therefore don't trust the ratings shared by those users anymore. You're back to square one. Building trust takes a lot of time and first-hand validation.

- There's potential for trusted nodes to turn "bad" (untrustworthy) therefore each node must continuously "police" neighboring nodes and relay any changes in behavior to mutually-trusted nodes.

- What's more, there is a certain "cost of competition" that comes with truly decentralized systems. You cannot roll out "system-wide" changes as easily as a centralized one since a majority of the system must first agree (and many times that majority is too small to even consider it a consensus, which ends in grid-lock).

- These five costs (paper-trail, verification, building network of trust, policing network of trust, cost of competition) makes the overall performance of a distributed platform very inferior to that of a centralized platform like Uber.

- Of course there are downsides to centralized platforms like Uber. The quality of ratings is less trustworthy since all users use separate criteria (and could be untrustworthy Lyft proponents). Also, Uber (as a system) does not make decisions in the best interest of its users and is only kept in check by its competition (which is diminishing each day).

- You can look to human civilization as a way to illustrate some of the challenges and solutions of purely decentralized systems. It would be pretty hard to survive if everyone didn't trust anyone outside of himself. We built our own networks of trust via our family and friends (our tribe). As human populations grew, so too did competition between tribes. Centralized governments and services were then built to offset some of our individual responsibilities and promote unimpeded, fair flow of certain resources while still preserving those aspects that benefit the most from decentralization.

- These hybrid systems (platforms with both decentralized AND centralized aspects) work the best in the real world as long as those centralized parts keep working for the majority of nodes and a healthy balance of decentralized/centralized is maintained. (You'll notice we struggle with both of those caveats today in modern civilization).

Whoo! Sorry for the long-winded post, I have a lot more to say on the subject but I'll save the rest for a blog post :). (I'm working on decentralized authority and identification in my spare time so this is a hot area of research for me!).

lxmorj2• 12 years ago

Let's say you require each user to use a valid credit card that matches their name and billing address to verify their unique identity. Then you implement the same star rating system as Uber for both drivers and riders. Then you let driver's set their mile and time rates. When I request a ride, the system gives me a list of time-to-arrival, mileage, and wait time charges. I pick the one I want.

It does seem like that would not require an overseers anymore than Bitcoin does.

What am I missing?

imaginenore• 12 years ago

https://openbazaar.org

So there goes your lengthy argument.

guelo2• 12 years ago

Seriously, why do we need the parasite middlemen like Uber?

prawn• 12 years ago

Because no one else had set up an as well-known and well-regarded service before they did it. It takes someone to offer deals and build the app and train drivers to get things rolling.

bane• 12 years ago

There's already a few competing free versions of this depending on the strength of the supply or demand signal.

- bumming a ride

- hitchhiking

- car jacking

- kidnapping

juretriglav• 12 years ago

Don't know if this is exactly what you mean, but in Slovenia, there is this website called http://prevoz.org (which translates to "ride.org"), where users/drivers can post when and where they're going, and others can contact and ride with them.

It's worked remarkably well for the past 5+ years and right now, there are almost 500 rides available for today.

kyro5• 12 years ago

Reading things like this make me OK with startups bending an even breaking the occasional law if they're truly providing something of value. The legal system is rife with regulations and actors that are often not intended to benefit the public. There is nothing inherently right or efficient about it, and it's the oldest and most inflexible of the man-made institutions, behind Comcast.

josho• 12 years ago

Agreed, but I also hope that the regulators catch up and make sane decisions to correct the current environment. For example, at the forefront of my mind is the need for consumers and the state to have assurances that the drivers of these services have commercial insurance. Or that it truly is a ride-sharing lookup, not a taxi service.

I'm sure there are other issues that need sorting, but as an outsider much of the taxi industry's regulations seem like they can be modernized for a post uber/lyft world.

kyro5• 12 years ago

Absolutely. I'm not advocating that we do away with the regulatory system, but that those drafting the rules look at startups like Uber/Lyft as signals and catalysts for change as opposed to reflexively treating them as threats on the system that Has Been And Always Shall Be. The world is changing rapidly, new needs and demands emerge, others die, and the red tape should be in constant reapplication, in tow.

pmorici3• 12 years ago

"assurances that the drivers of these services have commercial insurance."

I'm not sure about the situation in California but I looked into how taxis were insured in Maryland and it turns out they basically don't have insurance. They are only required to have a certain amount of cash in an account that acts like insurance if something happens. I believe the amount was around $30,000 which is very very little if something legitimately serious were to happen. Which is why I find it funny when people think taxis are some how better insured than ride share services.

ChiperSoft• 12 years ago

I hope you mean just regulatory laws.

If not, you might have a comfortable position waiting for you in the mafia.

tn135• 12 years ago

The lines between Mafia and tech entrepreneurs are not very clear. Threatening competitors of legal action and keeping salaries of employees lower sounds more like a Mafia and less like a tech entrepreneur to me.

kashkhan2• 12 years ago

or government. In government you can break almost any law.

kyro5• 12 years ago

already cofounder/ceo of kyll, lyft for assassins, and looking for investors

guelo2• 12 years ago

Just occasionally dumping arsenic in your drinking water. Occasionally some rat droppings in your meal. Just a little bit of bait and switch scam. Occasionally sneaking in hidden fees.

But we're providing something of value!

kyro5• 12 years ago

i always assumed civets had the market, but never considered rats

bowlofpetunias• 12 years ago

Organizations deliberately breaking the law for profit is generally called "organized crime".

Drug dealers provide something of value and personally I think we would be way better off if drugs were legalized. So we're going to call our local drugs-gangs "disruptive startups" now?

90% procent of the time these companies are simply breaking privacy, consumer protection and labor laws for one reason and one reason only: greed. So occasionally they may stumble upon a law that actually needs reform. Even a broken clock is right twice per day.

That doesn't make me okay with OK with breaking the law as a business strategy, especially since most of the time it isn't the Comcasts of this world that suffer the consequences, but individual workers and consumers.

This Robin Hood worship is pathetic. These startups are not making the world a better place.

DanielBMarkham• 12 years ago

> Organizations deliberately breaking the law for profit is generally called "organized crime".

You know, I actually agree with you, by the definitions of things we have in place today, that is, in fact, organized crime. And since most people violate three laws a day, and we use various corporate affiliations to do it, it would follow that we are all members of a vast organized crime syndicate.

Going to need some bigger prisons.

industriousthou• 12 years ago

>Drug dealers provide something of value and personally I think we would be way better off if drugs were legalized. So we're going to call our local drugs-gangs "disruptive startups" now?

Don't know about "local drug-gangs," but yeah, I see my friendly, neighborhood reefer dealer as an entrepreneur who provides a valued service.

CamperBob2• 12 years ago

These startups are not making the world a better place.

As opposed to governments gone berserk?

LarryMade2• 12 years ago

Hmm I remember the blue ride-share info signs out on the highway years ago. but doing a web search cant seem to find info on them. Was wondering if there was any info in there about carpools sharing gas money and such... ahhh, here it is:

http://www.rideshare.511.org/

TallGuyShort2• 12 years ago

Can anyone explain how this is different from services like Super Shuttle? I get charged an individual fee, but the actual times are subject to other passengers and that can change at any time.

greenburger• 12 years ago

I suspect because SuperShuttle franchises have different terms for the TCP permit they carry.

http://www.cpuc.ca.gov/PUC/transportation/FAQs/psgfaqs.htm

dragonwriter6• 12 years ago

Actually, SuperShuttle is a PSC rather than a TCP, and the rule here applies to TCPs (including TNCs, which are a new subclass of TCPs to which Uber, Lyft, etc., belong.)

dragonwriter6• 12 years ago

Can anyone explain how this is different from services like Super Shuttle?

Super Shuttle is a Passenger Stage Corporation (of the subtype defined as a "Door-to-Door Shuttle Service"), whereas Uber, Lyft, etc. are Charter Party Carriers, of the recently-defined subtype defined as "Transportation Network Companies".)

The rule at issue here applies to Charter Party Carriers, and therefore does not impact Super Shuttle and similar services, just as there are many rules that would apply to Super Shuttle as a PSC that do not apply to Uber/Lyft.

dragonwriter6• 12 years ago

California deems carpooling via all ride-share services illegal

The whole reason that charter party carrier laws and regulation are applied to Uber, Lyft, etc., in California is that they fall outside of the ridesharing exemption to those laws.

waterlesscloud• 12 years ago

Seriously, can we stop this pretend game of Uber and Lyft being 'ride-sharing'?

They are no such thing.

They're rides for hire, and pretending otherwise is insulting at best.

jaunkst• 12 years ago

Just got to transcend your humanity lol. If your 51% robot would the law still apply?http://geekologie.com/2014/09/how-hitchhiking-robot-survived...

kibaekr• 12 years ago

Didn't SF try to ban Airbnb a while back too? Whatever happened to that?

lpolovets2• 12 years ago

Does anyone know why laws like this exist? What's the value of regulating carpool ride-sharing and single-user ride-sharing, and what's the additional value of having separate regulations for each.

kashkhan2• 12 years ago

how do you separate jitneys from paying rideshares?

lpolovets2• 12 years ago

I'm basically wondering why the government thinks it needs to get involved in this kind of stuff at all.

UK-AL• 12 years ago

Lots of laws are only there because established companies of lobbied for them. A large chunk of laws are anti consumer and anti worker

djim• 12 years ago

this law however, is to protect consumers. it prevents taxis from charging multiple people for the same ride (as separate fares). this law actually makes sense and should stay in place.

bobcostas55• 12 years ago

If you want to look into it, the field that studies these things is called "public choice theory". It basically boils down to the fact that concentrated interests can impose diffuse costs (which they partially harvest in the form of rents) quite easily.

saalweachter• 12 years ago

This particular law is consumer protection. Taxis are required to charge per trip, not per passenger. If you are standing on a street corner, hail a cab and say 'anyone else going uptown?', that is purely between you and the other passengers, and not between you and the driver.

I suspect that if Uber had a second app, or maybe a second marketplace within the same app, which matched Uber passengers with each other -- instead of multiple passengers with a single driver -- it probably would have been legal.

sergiotapia2• 12 years ago

You didn't answer the question, "why?".

PaulHoule• 12 years ago

This is insane. Looking at the parking and traffic and pollution issues that plauge the big coastal cites, this makes no sense at all.

edgyswingset3• 12 years ago

That's precisely why we should be bigger advocates of public transit than we are.

bramgg• 12 years ago

Lyft has begun promoting this petition on Twitter: http://wh.gov/lh3L8

beedogs• 12 years ago

Just what California needs: more cars on the road.

Idiocy. Plain and simple.

sergiotapia2• 12 years ago

Why is it that almost every time I hear about a stupid law on the web, 90% of the time it comes from California?

Do the legislators there just love making people more problems?

dragonwriter6• 12 years ago

Why is it that almost every time I hear about a stupid law on the web, 90% of the time it comes from California?

Because due to its population and economy, and other factors that increase the attention to what goes on in California, you (and the web) or more likely to hear about anything in California than similar things in other states.

rhino369• 12 years ago

Well, also California is probably the most regulated state.

transfire• 12 years ago

None of this will matter is a decade or two. Autonomous taxis will take over, and then a handful of gents will rake in all the money and everyone else in the industry will be chronically de-employed.

hindsightbias• 12 years ago

And they'll blame technology. Uber/Lyft will probably try to litigate against autonomous vehicles.

groby_b• 12 years ago

Unless Uber/Lyft have management that is blind to reality, they'll be using autonomous vehicles.

They have no long-term obligation to the drivers, and they have no business need for actual human drivers. What makes you think they won't be early adopters for autonomous vehicles?

CalRobert2• 12 years ago

I spent a year in a relationship between SF and LA, which meant a lot of driving up and down the state. I almost always had one or two people sharing the ride with me who I found on Craigslist. Given that at least some of these people could have driven themselves but didn't feel like it and just wanted to split gas money, why in the world is this illegal??

CalRobert2• 12 years ago

Although, reading the tone of the article it would seem that they aren't focusing on places like Craigslist, zimride, etc.

burtonator• 12 years ago

they should continue the practice and publicly shame any politicians who tries to stop them.

Good luck running for an election again when you're destroying the environment with more cars.

This is California!

California deems carpooling via all ride-share services illegal

Related Stories