California today became the first U.S. state to regulate ride-sharing services when the state’s Public Utilties Commission voted Thursday to establish a new category of businesses called “Transportation Network Companies.” The vote passed 5 – 0.

The proposed regulations define ride-sharing startups, now considered Transportation Network Companies, as an “organization, whether a corporation, partnership, sole proprietor, other form, operating in California that provides prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles.”

The new category will includes existing services from Sidecar, Lyft, and Uber. Sidecar and Lyft announced the news on their Twitter accounts:

As part of the 28 regulations passed by CPUC, TNCs will be required to:

  • Obtain a license from the CPUC to operate in California;
  • Require each driver to undergo a criminal background check;
  • Establish a driver training program;
  • Implement a zero-tolerance policy on drugs and alcohol;
  • Hold a commercial liability insurance policy that is more stringent than the CPUC’s current requirement for limousines, requiring a minimum of $1 million per-incident coverage for incidents involving TNC vehicles and drivers in transit to or during a TNC trip, regardless of whether personal insurance allows for coverage; and,
  • Conduct a 19-point car inspection.

The full proposal that the CPUC voted on is embedded below:

Download (PDF, 697KB)

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