Uber and Lyft seem to be conquering California politics. In just the last month, the ride-hailing giants have secured a string of victories at the Capitol, killing or delaying legislation and regulations they didn't like and shepherding in new rules favorable to the industry. The companies are also resolving high-profile court cases that challenged how they hire drivers -- without hurting their shared core position that drivers aren't their employees. These successes come as Uber and Lyft are dominating the market in California, transporting millions of passengers each month while taxi trips are dropping precipitously. Here are four reasons why the ride-sharing companies are winning in Sacramento and what their victories might mean for their drivers and customers.
Uber and Lyft have had many big successes at the Capitol, but they haven't won all their battles. Three weeks ago, a bill to make it easier to do fingerprint-based background checks of ride-hailing drivers squeaked through an Assembly committee. The bill's author, Adrin Nazarian (D-Sherman Oaks), has proposed new regulations on the companies many times over the years. Nazarian's bill sailed unanimously through its first Assembly committee without a peep from the companies and was on its way to the Appropriations Committee. But before it arrived, the bill got routed to the Assembly Utilities and Commerce Committee led by Assemblyman Mike Gatto (D-Glendale), a big supporter of the ride-hailing industry .
In a broad reorganization of California's primary energy regulator, Gov. Jerry Brown and state lawmakers announced a deal Monday to strengthen external oversight, boost transparency in communications with the electric and gas industries and jettison some authority over Uber, Lyft and other ride-hailing companies. The package of reforms comes in response to scandals up and down the state in recent years, including the 2010 gas pipeline explosion in the San Francisco suburb of San Bruno, the decommissioning of the San Onofre nuclear power plant near San Clemente and last year's Aliso Canyon gas leak in Porter Ranch. In each case, the regulator, the California Public Utilities Commission, has faced significant criticism over alleged lax oversight or having a too close relationship with the energy companies involved. "This represents a new day for the people who in the last five years or so have suffered based on some sort of breakdown in California's regulatory environment," said Assemblyman Mike Gatto (D-Glendale), who presented the proposal at a Monday news conference. The plan will boost the authority of internal ethics and safety chiefs to protect whistle-blowers and streamline the process for shutting down facilities regulators deem unsafe.
Taxi companies and the ride-hailing industry agree: Stricter regulations on taxis are strangling cabs' ability to compete. But rather than adding to the rules governing Uber and Lyft, an effort that has seen limited success in Sacramento in recent years, Assemblyman Evan Low (D-Campbell) wants to deregulate the taxi industry. Low has introduced a bill, AB 650, that would allow taxi companies to set their own prices, streamline licensing, background check and insurance requirements and shift regulatory authority from local governments to the state in an effort to better mirror the rules governing Uber and Lyft. The ride-hailing companies' emergence in recent years, spurred by cheaper rides and looser restrictions on their operations, have threatened the taxi industry as a whole. In Los Angeles, for instance, taxi trips arranged in advance are down by nearly half over the last three years.
High-profile lawsuits and legislation have failed to answer a question that has loomed over ride-hailing giants Uber and Lyft even as more Californians have decided to drive for the companies: Just whom do the drivers work for? Whether the drivers are company employees, independent contractors simply paid to share their cars or a new third type of worker has continued to vex lawyers and legislators, with the answer having profound implications for the workers and companies' bottom lines. Assemblywoman Lorena Gonzalez Fletcher (D-San Diego), who amid strong opposition last year dropped a bid to allow ride-hailing drivers and other workers in the so-called on-demand economy to organize, wants to keep focus on the issue. She hopes to author a bill that would reach the governor's desk by the end of 2018. "We have a responsibility to intervene," Gonzalez Fletcher said.