CITYWIDE — Santa Monica city officials may not want to take on car services like Uber, but the City of Los Angeles has no such problem.
The city of angels declared war on the tech-driven car services this month, sending cease-and-desist letters to Uber, Sidecar and Lyft that threaten their drivers with a misdemeanor and 30 days without their cars if caught operating in the city.
The tough approach has already landed four drivers in trouble with authorities, said Jonathan Hui, a transportation engineer associated with the Los Angeles Department of Transportation, or LADOT.
Cities have struggled with how best to deal with the companies, which use a variety of business models and technologies to connect private drivers with passengers that have left regulators shaking their heads.
Those programs and applications allow people to arrange rides through their smartphones practically anywhere, creating a point-to-point service that many argue falls under state jurisdiction rather than local control.
LADOT instead considers Sidecar, Lyft, UberX and some regular Uber drivers “bandit cabs,” cars that charge people for rides outside of the taxi franchise system set up to protect the public from unscrupulous companies or unsafe situations.
Local governments have the right to regulate taxi cabs, and many do, creating intricate franchise systems that impose insurance, inspection and background check requirements on drivers and their cars.
That comes at a significant cost to taxi companies that want to be part of the franchise system, a cost which these other companies have avoided in the absence of specific legislation from the state setting parameters for their businesses.
In the meantime, it’s up to the California Public Utilities Commission, or CPUC, to establish rules for town cars and limousines, vehicles which can only offer pre-arranged rides and are prohibited from picking up passengers off the street.
Santa Monica officials believe that the three companies in question operate under agreements with the CPUC that deny City Hall the right to impose rules or requirements on them.
“L.A. may have some special provisions that provides it with the authority to regulate their (activities), but we are firm in our understanding of our authority and it does not extend to regulating these types of vehicles for hire,” said Salvador Valles, business and revenue operations manager with the city’s Finance Department.
Los Angeles city officials actually checked with the CPUC in advance of sending out the cease-and-desist letters, said Michael Nagle, an attorney with the city. The agreements that the companies point to are settlement agreements that allow them to operate in the state while a judge considers the issues involved.
That doesn’t make them town cars, or other CPUC-authorized vehicles, Nagle said.
The one exception to that is the Uber service, which does license some of its limousines through the CPUC. They can continue to operate in Los Angeles without a problem, Nagle said.
The reason for the crackdown is to improve passenger safety, which officials feel can be compromised by companies that hire drivers using unknown criteria and may or may not inspect cars.
“The companies say we check,” Nagle said. “Well, that’s not good enough. We do fingerprinting and check through Interpol. There are also insurance requirements.”
Drivers for the various companies and their passengers are getting mixed messages about the situation in Los Angeles.
Sidecar sent out an e-mail to its users assuring them that the company would continue on, business as usual without regard for the cease-and-desist letter.
“We want to let you know that we’re not going anywhere,” the e-mail reads.
Nick Ostrogovich, a Sidecar driver and co-founder of the Santa Monica Surf School, was under the impression that he could keep driving, but the threat of arrest and police impounding his car was enough to curb his desire.
The surfer and serial entrepreneur drives for both Sidecar and UberX when he’s not teaching lessons. He actually uses the driving business to network for new surfing clients.
“It’s definitely a great extra income for me,” Ostrogovich said. “I give 10 to 15 hours averaging 40 to 50 bucks an hour.”
He’s planning on investing in a town car so he can drive a licensed Uber vehicle.
Ostrogovich is not just a driver, he’s also a client.
He finds the people who drive for Uber and Sidecar to be pleasant and personable. One Lyft driver offered crackers and sparkling water for the drive, which still cost less than a traditional taxi.
“I hope it still continues, I use it all the time,” Ostrogovich said.