Ride-sharing companies like Uber may lose 'bandit cab' stigma in California

By Alex Dobuzinskis

LOS ANGELES (Reuters) - Commercial ride-sharing services offered by moonlighting motorists but frowned on by licensed taxi drivers and some cities as "bandit" cab operations would gain new legitimacy in California under a plan proposed on Tuesday by state regulators.

The draft rules to govern companies that already operate under such names as Lyft, SideCar and Uber, allowing passengers to electronically hail rides through smartphone applications, were unveiled by the state Public Utilities Commission (PUC) as taxi drivers continued to lobby against them.

The PUC, based in San Francisco, is set to vote on the guidelines as early as its September 5 meeting.

Taxi drivers registered their disapproval by staging a noisy demonstration against the ride-sharing services on Tuesday, circling San Francisco City Hall in their cabs.

Meanwhile, the head of the cabbies' national trade group, the Taxicab, Limousine and Paratransit Association, slammed the proposal as a blow to local control over traditional taxi-for-hire carriers.

San Francisco-based Lyft, SideCar and Uber, the three most well known of the ride-sharing services, hailed the draft guidelines, saying they already comply with several of the key rules laid out in the document.

Among the proposed regulations are requirements for ride-share operators to obtain a license with the PUC to do business in California, to submit their drivers to criminal background checks and to carry liability insurance of at least $1 million per incident.

The PUC's move to regulate commercial ride-sharing in the nation's most populous state comes as a number of major U.S. cities have imposed restrictions on such services.

Lyft, SideCar and Uber, operating in large urban areas across the country and catering to young, tech-savvy passengers, are built around smartphone apps that allow users to call for a ride from drivers who are behind the wheel of their own personal cars and participating in the service.

The apps, which are based on global positioning satellite technology, measure distance traveled and suggest a dollar figure for the rider to pay the driver.

In the case of Lyft, drivers are identified by a fluffy pink mustache they affix to the grill of their cars. Uber differs from Lyft and SideCar because it connects passengers with licensed limousine drivers. But in April, it unveiled another service called UberX that relies on average citizen drivers.

"Ultimately, we hope that other states will see this as an example, and we'll have consistent rules across the country," said Sunil Paul, CEO of SideCar.

Los Angeles launched an aggressive action against Uber, Lyft and SideCar in June when municipal officials issued cease-and-desist letters to the companies, accusing them of operating in the nation's second-largest city without a license.

The companies have continued to do business in Los Angeles in defiance of city officials, insisting they should be governed by the state, which regulates limousines and other ride-for-hire services that operate as private charter carriers in which transportation is arranged in advance.

Los Angeles City Councilman Paul Koretz has been working on city rules to rein in ride-sharing companies and their drivers, which he called "bandit cabs."

"When the first serial rapist appears to be a Lyft driver, I think the city, by doing nothing, is just as liable as anybody else," Koretz said last week.

(Reporting and writing by Alex Dobuzinskis; Additional reporting by Brandon Lowrey in Los Angeles; Editing by Steve Gorman and Philip Barbara)