Brown Administration Takes Sharp U-Turn On Ride-Booking Regulation

It’s not often a state agency retracts a newly-issued regulation late on a Friday night. But that’s what the California Department of Motor Vehicles did over the weekend.

In an abrupt U-turn, California Governor Jerry Brown’s administration has rescinded a regulation that required drivers for ride-hailing companies like Lyft and Uber to get commercial licenses for their vehicles.

The DMV announced the rule earlier this month. It stated that drivers who earn a profit using their private cars to transport people must register those cars as commercial vehicles.

But the Brown administration revoked that regulation at 10:18pm Friday after media reports earlier in the day prompted a backlash.

“We jumped the gun, and we shouldn’t have,” said DMV Director Jean Shiomoto in a statement. “The matter requires further review and analysis which the department is undertaking immediately.”

The Taxicab Paratransit Association of California, says without the regulation, taxi drivers would face a competitive disadvantage.

“People who basically do the same thing for a living should be under the same rules.” says Jennifer Tannehill, who represents the association.

But the ride-hailing industry praised the news – as did Republican Assemblywoman Ling-Ling Chang, who on Friday had urged the DMV to rescind the rule that she felt would put too big a burden on Lyft and Uber drivers.

“If it’s a student who just wanted to do a couple of rides a day, rather than have this as their livelihood, it would impact them in terms of fees and a lot more red tape,” Chang says.

Last year, after months of negotiations with ride-hailing companies and the taxicab industry, lawmakers passed and Gov. Brown signed legislation that requires ride-hailing service drivers to obtain stronger auto insurance coverage starting this July.

That law's author, Democratic Assemblywoman Susan Bonilla, says she’s happy the DMV is taking another look at the regulation.

“We want to work with our new companies to help them to succeed – in a way that also assures all of the consumers that they are protected,” Bonilla says.

The DMV plans to take a fresh look at whether to require ride-hailing drivers to obtain commercial licenses in the next few weeks.

Here's the DMV's original regulation issued earlier this month and rescinded late Friday:

DMV memo on commercial plates by CarolynSaid