As the state Senate was plowing through budget “trailer bills” Thursday, Sen. Ben Hueso arose to oppose one that, among other things, would hike annual motor vehicle registration fees by $10.
However, as the San Diego Democrat acknowledged, he wasn’t objecting to the bill’s provisions. Rather, he was, without naming them, complaining that the Uber and Lyft ride-sharing services are exempt from paying extra license fees imposed on taxis and other commercial vehicles.
“It’s causing an injustice,” Hueso said, adding the exemption is costing the state $4 million a year. “It’s unfair.”
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It was another episode in one of the Capitol’s most intense clashes, pitting the burgeoning ride-sharing services, in which passengers can summon private vehicles for rides, against traditional taxicab services.
There are at least 50,000 Uber drivers in California – up from zero just a few years ago – and they represent a serious competitive threat to the traditional taxi industry, which both state agencies and local governments regulate.
Hueso’s family owns one of San Diego’s largest cab companies, although he claims to have no personal economic stake. But as chairman of the Senate’s Energy, Utilities and Communications Committee – appointed by his childhood friend, Senate President Pro Tem Kevin de León – he has bottled up bills that would help Uber and Lyft expand even more.
A year ago, the Assembly passed, virtually unanimously, two bills, but Hueso has refused to schedule them for hearings in his committee. A third bill cleared the Assembly, with no dissent, in May.
With the deadline for committee action fast approaching, Hueso has, with obvious reluctance, scheduled hearings this week. Meanwhile, his own bill, aimed at banning the flexible pricing Uber and Lyft drivers use, was rejected by a Senate committee in April.
One of the pending Uber/Lyft bills relates directly to the situation that Hueso decried in his floor speech.
Seventeen months ago, the Department of Motor Vehicles issued an “advisory” that cars used in the ride-sharing services would have to be commercially licensed. The “transportation network companies,” as they’re officially called, objected, and a week later, the DMV revoked its declaration, saying it was premature.
Were the cars driven by Uber/Lyft drivers to be classified as commercial, their advocates say, it could raise their insurance costs and interfere with the loans that owners took out on what were considered to be private vehicles.
Hueso, in his floor speech, blamed the DMV’s retraction on Gov. Jerry Brown. Meanwhile, Assembly Bill 828, one of the bills awaiting hearing, would continue the commercial license exemption through 2017 while the Public Utilities Commission studies if and how Uber and Lyft should be regulated.
Hueso’s obvious antipathy to the ride-sharing services notwithstanding, the bills dealing with Uber and Lyft represent one of many instances in which the Legislature and the state’s regulatory agencies are facing difficulty in dealing with fast-growing new technologies and industries that defy traditional definitions.