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Calif. DMV Back-Pedals On Commercial-Plate Mandate For Ride-Share Drivers
The San Francisco Chronicle reports that
In an abrupt U-turn, the California Department of Motor Vehicles late Friday retracted its finding that drivers for ride-hailing services like Uber, Lyft and Sidecar must obtain commercial license plates.
That determination — based on a 1935 state law — ignited a firestorm of criticism from the San Francisco startups and their supporters as stifling innovation. Commercial licenses are cumbersome to obtain, meaning they could impede the companies’ growth, which relies on getting new drivers, many of whom work just part time, into service quickly. And commercial registration probably would have necessitated that drivers get commercial insurance, which is significantly more expensive than personal auto insurance.
Republican Assembly members threatened legislation over the “nonsensical” interpretation if the DMV didn’t reconsider its stance before Feb. 17.
Now the department says it will do just that.
That doesn't mean drivers for companies like Uber and Lyft can expect to be left alone by the DMV, though, which according to the article "will meet with regulators and the industry to work through the issue."
Why, exactly, should Uber drivers get to drive passengers using regular non-commercial drivers' insurance? Commercial insurance costs more because people who drive people around for a living are much more likely to cost the insurance companies more money. If you're letting them drive on non-commercial licenses than that means that regular drivers are subsidizing Uber-drivers.
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Your insurance papers will probably make it clear that you are NOT covered for commercial use of your vehicle. Even if you don't read the policy, you know in your heart that commercial drivers pay more than ordinary drivers. Lots of people think they can deceive their insurance carrier and save money. The company gets the last laugh when it's time to pay for a claim. Any deception on the part of the insured is likely to negate the contract and no claim will be awarded. Yes, possibly years of payments to that company and all for nothing because you lied.
Like the people who watch your credit worthiness and the people who observe you for terrorist tendencies, the insurance industry has vast resources focused on you. If you try to cheat any insurance company, the word is spread and none of them want to deal with you. If you can get insurance it will be very expensive. Honesty is the best policy.
...omphaloskepsis often...
If drivers need to get commercial plates, they'll need to update their insurance carrier at which point they will likely be informed they need commercial insurance. The cost of commercial insurance will eat into the thin margins for Uber drivers, causing some to drop off of the platform. Given Uber's already high turn over for drivers, this will reduce the number of new drivers willing to flow into their system.
Really, Uber is a house of cards. Eventually, divers' cars are going to age and the replacement cost is going to be a massive hit. Drivers are going to start forgoing maintenance (not great for safety), driving while tired, etc... to try and beef up their margins. There's probably a 3 year timeline before this hammer comes down, faster if new drivers stop flowing into the system due to new insurance requirements. My guess is the goal is to IPO and cash out before the whole thing comes down.
There is no way around the maintenance or replacement costs drivers are going to incur. Taxis don't drive older, easy to fix cars because they're hording massive profits. It's because they need to do it to try and maintain a decent profit margin. Give it a few years and you'll be riding in an Uber with a low cost Macco paint job, bald tires and a check engine light covered with a piece of electrical tape. Without regulation, no one will be checking and drivers will be looking for every way to squeeze more profit out of each ride. And before someone replies with "People will just rate down the driver".... ask yourself how you'll know the tires are bald and the check engine light is glowing under a piece of tape. Maybe the CV joint boots are ripped and dirt is happy grinding itself into the bearings, waiting to fail spectacularly. If you feel comfortable taking the chance with your life or your family's life, that's your decision, but I don't want one of these cars slamming into me on the highway.
You are not being paid to drive to work. You are being paid for the work you do there.
I am a contractor. I drive to clients, all of my driving to clients is directly related to the job.
I also write iOS applications, sometimes I drive around testing the GPS aspects of the apps. In those cases I am billing while driving.
Why do I need a commercial license tags for that again? How is that in any was reasonable except you simply want more money from me and that seems like a fine angle to use to extract it? It wouldn't make me any safer to have a license where I answer questions about driving tractor trailers. Insurance wise I had damn well better be covered for anyone else getting injured in my car anyway, and insurance is already calculated based in part on miles you drive per year (not to mention Lyft/Uber provide extra insurance on top of what you have).
Why would I need commercial license/tags to drive a few people around few days a week? I already do that with family and friends. Why is is so different when it's someone I don't know at the start?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I thought the general principle was that if you are making a profit off publicly-funded infrastructure (in this case, roads) you should be taxed more than the general public, hence the special license for commercial vehicles. I can't see why uber and the like should be exempted.
Why is the DMV kowtowing to a commercial business? If this was in my state i would be raising hell. Sorry, i am not in uber corner here. Name some or any business that doesn't require a License when dealing with the public. I cant think of any, be it a plumber to an insurance salesperson. Uber is no different, we don't need MORE corporations getting out of paying there fair-share in taxes,fees. umber doesn't need loopholes in car repairs and proof of commercial passenger service insurance. Im betting the Auto insurance industry would have some hefty insurance premiums to those they find out are using there personal non commercial cars for commercial passenger service vehicles.
Jack of all trades,master of none