California DMV retracts alert on ride-for-hire commercial registration

Backtracking from an announcement that had riled rideshare companies like Uber and Lyft, as well as state lawmakers, the California Department of Motor Vehicles on Saturday retracted an alert saying anyone who transports people for money must commercially register their vehicles.

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

The early January notice posed an existential threat to businesses like Uber, Lyft and Sidecar. Those companies allow nonprofessionals to drive customers for money, and they rest on the premise that anyone can make extra money off their personal vehicle.

Republican and Democratic lawmakers accused the DMV of applying an antiquated rule to a business model that could hardly have been anticipated when the relevant statute was written in 1935.

Last year, legislators sent Gov. Jerry Brown a bill that required more robust insurance requirements on drivers working for “transportation network companies.” That law acknowledged the legality of such transactions, industry representatives said.

The DMV pledged to convene regulators and members of the industry to sort through the confusion, including the effect of “recent regulatory and statutory changes affecting ride share operators” on the older law.

This story was originally published January 24, 2015 at 5:23 PM with the headline "California DMV retracts alert on ride-for-hire commercial registration."