Update on TNC Horse-Hiring

Update on last week's post: the California Public Utilities Commission may (or may not) crack down on renting or leasing “ridesharing” vehicles by Uber and other TNCs.

On Thursday, August 13^th, the PUC received a string of complaints from taxi drivers during the public comment portion of its meeting in San Francisco. Concerns about Uber’s Xchange Leasing, and similar horse-hiring programs, were at the forefront of the list. First to speak was taxi driver Kim Waldron, who pointed out:

I would like to remind you that the PUC created the TNC program. It was based on using a family car, not a leased car, by the day, week or any other period, which seems to be the common practice now. They also cannot be loaned or rented to a third party. By not acting on any of these practices, the PUC is breaking its own rules... (PUC video).

Although the Commissioners reportedly responded “with the usual vacant stares,” a PUC spokesperson did tell reporters that the PUC would be investigating the new horse-hiring practices:

"A TNC (Transportation Network Company) permit does not authorize the use of vehicles other than those privately owned by the driver," said commission spokeswoman Constance Gordon, who confirmed that the commission is probing Uber's leasing program, as well as a number of smaller companies that offer rental and leasing options to drivers. (Heather Somerville)

Nevertheless, Gordon implied that the problem may not lie with Uber or the other companies that rent or lease to TNC drivers, but with the regulations which the PUC had adopted in order to create TNCs as a new category distinct from taxicabs. Foremost among these was the “personal vehicles” provision; since taxicabs in California are, by law, regulated at the city rather than the state level, this arbitrary distinction was necessary for the PUC to be able to extend regulatory authority over for-profit “ridesharing.”

Gordon told the LA Times:

"It's a brand-new thing. We said when we first set regulations that we'd probably be changing them," she said. "There are things we didn't think of when we first regulated them, so we're adjusting." (Andrea Chang)

But, as I detailed here last week, renting or leasing to cabdrivers is not at all a new thing, but a very old thing. So old, in fact, that the technical term for it is “horse-hiring.”

The fact of the matter is that, when the PUC created the TNC as a new legal category, it was not so much recognizing a “new” form of car service, as creating a new, state-regulated taxi industry which competes directly with the already existing city-regulated taxi industry. That this state-regulated taxi industry should then fall into the same organizational and economic patterns as the traditional city-regulated cab industry should not really be a surprise.