Unhand Uber, Leave Lyft Alone, Save Sidecar

It is impossible--actually impossible for the California Legislature not to screw up a good thing. Trees could begin growing dollar bills and they would create a commission to regulate them and charge onerous taxes to the people that picked them.

This is why I shouldn’t have been surprised when I read Josh Richman’s piece in the San Jose Mercury News about two bills going through the Capitol during the two weeks left before the current legislative session ends. 

AB2293 and AB612 would, respectively, unload stifling insurance rates on services like Uber, Lyft and Sidecar, while simultaneously making the background checks for their drivers more stringent than getting a Top Secret clearance from the Feds.

Once again, we see special interests getting their way in Sacramento. Driven by the insurance and taxi industries, the Legislature is bowing to pressure and money from old-line interests that have little regard for consumers and only for their bottom-line. I’m a capitalist – I like profits – but don’t over-regulate a competitor and tell me you’re doing it on my behalf.

Because the Golden State’s elected leaders aren’t doing enough, the California Public Utilities Commission, one of dozens of unelected and unaccountable boards in the state, created, out of whole cloth, a new category of businesses they can regulate – “transportation network companies”. 

First, shouldn’t the PUC need additional legislative authority to begin to regulate entirely new industries? Second, we shouldn’t be surprised about this. The PUC is also a regulatory body that requires those companies it regulates to pay for the people who bring complaints against said companies. They call them “intervenors”.

AB2263 would require drivers for the Ubers and Lyfts of the world to carry $750,000 worth of liability insurance – 20 times higher than the taxi industry. As these drivers are all independent contractors with their own insurance, this would put them out of business. As Uber can’t afford to cover the thousands of drivers it utilizes, it too, would likely shutter. 

And if that weren’t enough, California’s trial lawyers also made sure to insert a provision that would remove any limits on liability, leaving companies and drivers open to potentially unlimited damages. As this is already a business model in California, AB2263 would simply open another avenue for potentially frivolous lawsuits.

AB612 would require Uber and Lyft drivers to submit to semi-annual drug tests and prevent any of them with criminal records for things such as credit card fraud from working. To highlight the ignorance of the legislators in question, I’m not sure they know that an Uber rider never actually hands their credit card to the driver. Also, this standard is far more stringent than anything the taxi industry has ever had to abide by (I’m looking at you San Francisco and Washington, DC).

I was in Austin, Texas two weeks ago and utilized UberX during my entire visit. One evening I got to talking with the driver (everyone of them by the way, couldn’t have been nicer or more welcoming) about the process. By his account, Uber already runs an incredibly in-depth background check on its drivers – it took two weeks for his approval to come back! 

Sacramento pays lip service to Silicon Valley and California’s tech sector. But truth be told, they’re not really comfortable with the innovative and disruptive products churned out day after day. The old system works for them – and for the special interests from which they receive most of their marching orders.

Today, the Ubers, Facebooks and Googles of the world live in California. They do so because there is no greater concentration of technical and engineering talent anywhere in the world. For more than 30 years the area has been a magnet for creation and brainpower. But they don’t need to stay here. There are plenty of states, dozens perhaps, who would happily break bread and break ground with tech-sector companies.

Leave it to California to have the greatest farmland in the world, but not give its farmers water, to have the most oil in the country but not let anyone pump it, and have the greatest collection of life-improving technology only to put the breaks on it. 

If you’d like to let the sponsors of these bills know how you feel, their contact information is below:


AB2263

Assemblywoman Susan Bonilla (D-14)

(916) 319-2014 (Capitol Office)

(925) 521-1511 (District Office)

AB 612

Assemblyman Adrin Nazarian (D-64)

(916) 319-2046 (Capitol Office)

(818) 376-4246 (District Office)


Reed Galen is a Republican political consultant in Orange County, California. He can be reached at reed@jedburghs.com.


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