Uber, Lyft Back Business License Changes in California Bill

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By Joyce E. Cutler

California lawmakers gave Lyft Inc. and Uber Technologies Inc. drivers the right to avoid city business license requirements by approving a bill that the transportation network companies championed.

Senators late Sept. 11 gave the final blessing to S.B. 182, which allows transportation network company (TNC) drivers to register for a business license where they live, not where they drive. The city of San Francisco, the California State Association of Counties, and the League of California Cities opposed the measure. Senators voted 32-4 to concur with Assembly amendments and sent the bill to Gov. Jerry Bown (D).

“Uber supports SB 182 because it protects drivers from unreasonable fees and invasions of their privacy. This bill fixes a growing issue that is felt by thousands because of an outdated licensing system that doesn’t fit this growing industry,” Christopher Ballard, Uber general manager for the southwest, told Bloomberg BNA in a Sept. 12 email.

A Lyft representative didn’t immediately respond to a request for comment.

“TNC drivers cross many city lines every day picking up and dropping off riders, and simply put, it would be untenable if drivers were required to obtain a license in every city they cross through,” Robert Callahan, executive director of the Internet Association that sponsored the bill, said in a Sept. 12 statement to Bloomberg BNA.

Separately, A.B. 1069 pending on the Senate floor would prohibit a city except for San Francisco and transit agencies from requiring a taxicab service provider to obtain a business license unless that taxi only operates in city boundaries. It’s meant to level the playing field with taxis losing business to TNCs.

The legislative action comes as the TNCs and San Francisco are in court over driver information, and the California Public Utilities Commission (CPUC) is considering how to publicly provide data about the ride-hailing operations.

Lawmakers have until Sept. 15 to pass bills and send to Brown. Brown’s office declined to comment on pending legislation.

‘Rewrites Rules’

Sen. Hannah-Beth Jackson (D) opposed S.B. 182, arguing during a Sept. 11 floor debate that the measure “undermines existing license schemes and rewrites the rules for this particular industry.”

San Francisco, where TNCs drive 570,000 miles within the city on a typical weekday, heavily lobbied against the bill. Just 29 percent of TNC drivers hailed on San Francisco streets are from the city, a June San Francisco County Transportation Authority report said.

More than 130,000 San Francisco businesses pay a business license that the city argues is indeed a tax that applies to drivers as other business.

“SB 182 is—by design—unenforceable. Until this special interest carve-out, businesses operating in San Francisco all had to play by the same rules,” Amanda Kahn Fried, policy and legislative manager in the office of the San Francisco Treasurer & Tax Collector, told Bloomberg BNA in a Sept. 12 email.

San Francisco Fight

The San Francisco-based TNCs also are fighting their hometown in court over the city’s push to obtain driver information.

Uber is appealing a trial judge’s June order rejecting the company’s motion to quash the Treasurer-Tax Collector’s subpoena seeking driver information.

Lyft and San Francisco return Oct. 5 to California Superior Court as Lyft resists San Francisco’s subpoena seeking information the TNC annually files with the CPUC. The data includes accessible vehicles, driver violations and suspensions, hours and miles that drivers log, and service by zip code.

CPUC Actions

The CPUC is now considering posting TNC data online. The Internet Association, whose members include Airbnb Inc., Google, Lyft, and Uber, argues against sharing that information.

Sharing “personal and proprietary data from ridesharing companies would diminish trust between TNCs and their customers who expect their data will be kept secure, as well as cause the unnecessary divulgence of internal trade secrets that would impair competition among firms in the market,” the trade group said in a CPUC filing.

The San Francisco Municipal Transportation Agency (SFMTA) and San Francisco International Airport (SFO) counter that the hands-off approach isn’t working.

“Unfortunately, the streets of San Francisco and other cities are now choked with more cars than ever, but because the Commission has elected not to make TNC data publicly available, it is difficult to fully understand the cause of the problem,” SFMTA and SFO said in a joint CPUC filing released Sept. 12.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at JCutler@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of S.B. 182 is at http://src.bna.com/ssU.

Text of A.B. 1069 is at http://src.bna.com/ssV.

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