Uber strikes key deal with California regulators

The company says it won't have to pay fines levied against it by the California Public Utilities Commission.

Don Reisinger
Former CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
2 min read

Uber, the on-demand driving service, has temporarily resolved an issue it's been facing with California, the company announced yesterday.

The California Public Utilities Commission (CPUC), which regulates some driving services in the state, last year issued citations and fines against Internet-based Uber for allegedly operating a "charter-party carrier" service that failed to include insurance coverage and enrollment of its hired drivers in a substance abuse program. CPUC also argued that Uber failed to provide evidence of workers' compensation insurance.

Two other driving services, Lyft and SideCar, were also included in the citation, which fined all three companies $20,000 each.

"This is a matter of public safety," Jack Hagan, director of the CPUC's Consumer Protection and Safety Division, said in a statement at that time. "If something happens to a passenger while in transport with Lyft, SideCar, or Uber, it is the responsibility of the CPUC to have done everything in its power to ensure that the company was operating safely according to state law."

For its part, Uber has argued that it's not actually employing those providing the service and is simply partnering with car/driver providers to allow people to travel in an area.

Following negotiations with Uber, CPUC decided yesterday to eliminate the fine and allow Uber to continue its operation in California.

"More than that, the agreement states that ride-sharing -- or rides provided by drivers not specifically licensed to drive a limousine or taxi -- is legal too," Uber wrote yesterday in a blog post. "This paves the way for Uber to begin offering ride-sharing services in California in the near future."

However, a statement from CPUC doesn't appear to be as ironclad as Uber asserts. CPUC said in its own statement on the matter that the ride-sharing will be allowed only while the organization's "rulemaking is underway."

"With this agreement, the CPUC's Safety and Enforcement Division will suspend its cease and desist notice to Uber, as well as the $20,000 citation issued on Nov. 13, 2012, pending the outcome of the CPUC's rulemaking," the organization wrote in its statement yesterday.

Uber has been expanding its business quickly. This month alone, the company launched in Berlin and delivered taxi service to Washington, D.C.