Business

Uber, Lyft, & Sidecar react as California threatens taxi-style regulation

Above: California's State Capitol.

Image Credit: Wikipedia Commons

Left unchanged, a bill sitting in the California State Senate threatens the business models of ridesharing startups like Uber, Lyft, and Sidecar.

This week, the California State Senate’s insurance committee passed bill AB 2293, a measure to require “transportation network companies” such as Uber to insure drivers as soon as they turn on their ridesharing app of choice. Currently, Uber and similar startups offer drivers commercial insurance when their app is on and someone has accepted a ride — the coverage then generally lasts until the rider exits the car their destination.

If AB 2293 passes through the state’s Appropriations Committee and becomes law, taxi industry leaders will flood newswires with victory cheers. To them, startups like Uber should be required to provide full-time, primary commercial auto liability insurance coverage, just like traditional taxis.

But Uber considers these additional state requirements “unnecessary,” a company spokesperson told VentureBeat by phone. Uber says the bill undermines what it means to be actively “engaged in ridesharing.”

And Uber has a point.

Because firms like Uber play host to part-time drivers, and because these drivers often leave their smartphones on regardless of their intentions to drive for professional or personal reasons, it’s hard to determine when commercial use begins and ends.

This debate is far from new; it’s the subject of numerous lawsuits and state insurance agency warnings, and it is a key talking point among Uber’s opposition.

Siding with Uber, a Sidecar spokesperson called the requirements “excessively high.” Sidecar tells VentureBeat that it shares “the Senate Committee’s goal of consumer safety,” but it finds “the amended [Assemblymember Susan] Bonilla [D-Concord] bill requirement of $750,000 for the time period when the app is turned on but no rider is in the driver’s car excessively high because it is more than 20 times higher than what is required of taxi and livery services. Sidecar’s drivers drive their own personal vehicles, and it’s clear there is less risk when there is not yet a passenger in the car.”

Chief Uber competitor Lyft echoed a similar sentiment in a statement to VentureBeat. “The committee’s action yesterday was a disappointing setback for the ridesharing movement in California,” a Lyft spokesperson said. “Lyft has set the highest standard in safety and we have worked to increase transportation safety by establishing unprecedented background check and driving record standards, creating accountability and trust through in-app feedback and pioneering first-of-its-kind insurance protection to cover both drivers and passengers.” More, from Lyft:

Instead of advancing common-sense regulations, the bill that passed the committee today forces innovative new models into a one-sized-fits-all regulatory structure with no basis in fact, all without increasing public safety. We will continue to work with all stakeholders to bring about a positive resolution that improves transportation access, safety and affordability for California residents.

As AB 2293 progresses, we expect all three startups to lobby for changes.

More information:

Uber Technologies Inc is known as Everyone's Private Driver. Uber operates an on-demand car service used all over the world. With the touch of a button from your phone, you can experience your own private driver. Sign-up quickly, g... read more »

Lyft is a friendly, safe, and affordable transportation option. Just tap a button and in minutes you’ll be riding in the front seat with a new friend. Our Lyft community drivers have been background checked and personality screened t... read more »

Sidecar’s smartphone app matches everyday people in their own car with people nearby for shared rides. It’s a fast, safe and fun way to get around the city, meet new people and keep extra cars off the road. Sidecar is a totally dif... read more »

Powered by VBProfiles


VentureBeat is studying mobile marketing automation. Chime in, and we’ll share the data.
23 comments
mike miller
mike miller

I drive for both Uberx and Lyft in Los Angeles for a few months now part time on nights and weekends. As most of you know, who have actually used the ride sharing services to get from one place to another, it involves mostly newer prius and a few other types of vehicles.  If there are more than 4 people in a group(or seats with seat belts) they order another car.  I have been told by riders, especially people that live in downtown LA and Hollywood and Santa Monica, that they were able to get rid of having a car and the expenses, pollution and hassle etc...  associated with a car, because of uber and lyft. Yes it may need some adjustment going forward as a business but it is a perfect match for LA Counties 12 million people spread out in a vast area with an inadequate mass transit system (although the state is trying)

Ari Stiegler
Ari Stiegler

Lyft is awesome! I use it nearly every weekend. I think that the drivers should be 100% insured. And if you haven't taken your first ride yet, download the Lyft app and enter promo code "FREE20" for free rides for 2 weeks!

Lucas Laramie
Lucas Laramie

DANNY WEB - I have seen you whine and whine  when anyone complains about Uber . I've seen your same comments copied and pasted over and over on different sites. Shouldn't you be driving your Uber car instead of trolling the web for Uber sites and follow the same laws, rules and regulations as everyone else ? You'd make more sense if you be on the same level playing field as all other commercial drivers are so stop your whining and start complying with the State Law, rules and regulations instead of sticking your nose up at these rules .

Nosha Monteiro da Cunha
Nosha Monteiro da Cunha

As disruptive and cool all the services these startups offer, I'm only surprised nothing really bad happened so far. Aside from that, in order to understand you have to put yourself "in the shoes" of the taxis and other services that get training,licencing, pay fees and taxes. It's not fair and definetly not right.

Brett Rothenberg
Brett Rothenberg

That is the whole point.. it is NOT ridesharing.. the drivers do not have destination in advance.. they are not in green vehicles like originally intended, people are making this a full time job, not a rideshare to work with someone else. If you were forced to input destination and drivers could select green/effiecient routes it would be a different story. Also load balancing drivers on the road is non-existent to uberx.

Lucas Laramie
Lucas Laramie

PS - How many black people are hired by Uber ? None to one, that's how many . They discriminate against certain minorities .

Lucas Laramie
Lucas Laramie

Opps, I meant to clean this up a bit . They use words like terminate, disconnected, deactivated but those words are made to deceive you because you are not a " prtner " You are an employee & if you refuse to do somethingthat is illegal by customer request due to te rating system you will be FIRED . The rating system will encourage drivers to violate the law to maintain a high rating . If not they will be FIRED .

Lucas Laramie
Lucas Laramie

I drove for Uber for slightly under two months and here’s what I found………….Uber is dangerous for public safety and must be shut down . Having to tap a small icon on the Uber device ( phone ) to accept, cancel, arriving, etc., and more takes your eyes completely off of the road . You are oblivious to traffic for those few seconds your looking at your Uber device which can easily cause head – on collisions resulting in immediate death & injury . Even if you, yourself cancels you must proceed with why you are canceling to the little icons on your Uber device and doing so makes you oblivious to traffic and the road ahead of you while driving . There are 6 icons on your Uber device stated on you why your cancelling & you must select one by tapping on one of the little icons . This is frequently done while driving diverting your eyes off the road ahead of you . You are not paying attention to traffic while your concentrating on these little icons on your Uber phone. When driving to get to the the client ( this happened frequently for me ) the client cancels for one reason or another . Because your on the way to pick up your client you receive the cancellation notice while your driving and while your driving your eyes are taken off the road so you can respond to the beeping sound coming from your Uber device . This beeping sound indicates that the client has cancelled the fare . While driving, searching then tapping the icons is more dangerous then texting . Furthermore, there is no time limit to driving . Unlike Taxi drivers who are limited to a ten hour driving period in, San Francisco an Uber driver can drive for 20 hours straight or more . Too much driving creates fatigue often leading to confusion, , falling asleep, hallucinations, dozing off and considerably more inattentiveness which can cause accidents resulting in injury and even death . Being an Uber driver means you must do illegal or unlawful things such as take 8 passengers in your car when there are just 4 seat belts . In my case I was required to take 9 passengers, including myself which would have been 10 people all in a mini van . The weight itself is enough to cause my tires to rub against the wheel wells of my van creating sparks from stones trapped in the threading of my tires which could ignite the fuel tank causing an explosion even killing all those passengers that are trapped inside my mini Van . Another example : That much weight often causes unintentional swerving resulting in an accident .
After I complained to my Uber representatives via email numerous times about having to take too many passengers creating unsafe driving conditions i received absolutely no response and getting zero response from other Uber drivers complaints may encourage these drivers to do unlawful and dangerous things . If you refuse to take all 9 people when there are only 6 seat belts the clients ( in my case were upset ) gave me a “ one “ rating and if your rating is too low you will be blocked from driving which is what happened in my case . You must also drop drivers off at the designated location the client(s) request creating the impeding of traffic & the sudden slamming of your brakes so you won’t miss the client(s) destination . Again if you don’t you will be graded on your performance from 1 to 5 and in most all cases you will be given the lowest rating such as a “ one “ and you will be blocked from driving . So, refusing to take all nine passengers ( 10 including myself ) because it is unlawful , dangerous and of a safety concern to your passengers and yourself is a reason your account will be terminated bu Uber as is what happened to me .
There are no vehicle inspections required by Uber drivers meaning if your car’s brakes are failing or wipers not working it’s still OK to drive in the rain . Does Uber care your brakes are failing or wipers aren’t working ? Probally not . They just want their 20% share of your fare and will probally claim no responsibility if your involved in an accident, your brakes fail and wipers don’t work while driving in the rain . In the eyes of Uber you are an independent driver . It is illegal to use your vehicle commercially unless you get commercial registration and insurance . Uber drivers do not have commercial insurance and probally most don’t get commercial registration for their vehicles or the proper insurances so driving commercially for Uber is technically illegal .

Rakesh Agrawal
Rakesh Agrawal

AB 2293 is absolutely right and Uber, Sidecar and Lyft are dead wrong.

John Smith
John Smith

And why do they get any special treatment?

Nadav Ben-Haim
Nadav Ben-Haim

hey California, this is what you get when you vote for statists to run your government.

danny webb
danny webb

@Lucas Laramie sorry but i've seen a black lyft driver at masonic ave. SF working at 2:30 am. 

Harrison Weber
Harrison Weber moderator VB Staff

@Lucas Laramie Hey. Would love to hear more if you've actually driven for Uber and can offer proof. My email is harrison at venturebeat

Brett Rothenberg
Brett Rothenberg

It's pretty evident now.. the 30% off the price of a cab comes from the lack of insurance.. can't have both..

danny webb
danny webb

@Harrison Weber @Lucas Laramie I've seen this same comment copied and pasted over and over on different sites. 

Shouldn't you be driving your cab instead of trolling articles about Uber or lyft? 

Satiricon Bogdanovich
Satiricon Bogdanovich

@danny webb lets see specific links of where this was posted, with dates BEFORE today, reply to my comment with links


because his post sounds genuine and spot on and i can tell the guy who runs UBER is a fuckin prick