California is about to overhaul its taxi industry, which could suck for self-driving cars

California is about to overhaul its taxi industry, which could suck for self-driving cars , Photo by Michael Nagle/Getty Images

At 11:20 pm Wednesday night, 40 minutes before California’s state legislative session was scheduled to adjourn for the year, lawmakers approved an obscure bill that, if signed into law by Governor Jerry Brown, could spell serious trouble for the state’s nascent self-driving car industry.

The bill, AB 650, would centralize control of the taxi industry by transferring regulatory jurisdiction from every city in California (except San Francisco, which operates on a medallion system) to Sacramento, the state capital.

So instead of LA’s taxi commission overseeing that city’s taxi business, California’s Public Utilities Commission, which oversees the electric grid and hot air balloons, among other commercial carriers, would now have that authority. Supporters say this will help the traditional taxi industry better compete with upstarts like Uber and Lyft.

"a disruption in taxis' archaic model of transportation"

"The laws and regulations governing the provisions of transportation services are many decades old and have evolved slowly," the bill’s author, Assemblyman Evan Low, told the Los Angeles Times. "As with many new technologies, the rapid growth of [ride-hailing] companies has created a disruption in taxis' archaic model of transportation."

The bill would prohibit cities from setting rates, limiting the number of taxis on the road, and allowing cabs to pick up or drop off passengers outside certain jurisdictions. Supporters say it would create a more even playing field between taxis and ride-hail apps like Uber and Lyft, which over the years have captured much of the traditional industry’s business. Currently, taxis are regulated by cities, while Uber and Lyft are regulated by the state; this would better align the regulatory environment, they argue.

But critics say the bill sacrifices safety for expediency. "They got rid of all background checks for taxicab [drivers]," Eric Spiegelman, taxi commissioner for Los Angeles, told The Verge. "So your Uber drivers are going to be better screened than your taxi drivers, once this goes into effect."

For years, the taxi industry argued that their drivers were safer because they were subjected to greater scrutiny than Uber, which has long opposed fingerprinting drivers and has been criticized for lax safety standards. And Spiegelman said seven of LA’s nine major taxi companies opposed the bill for this reason.

"your Uber drivers are going to be better screened than your taxi drivers."

The bill would also eliminate requirements that taxis serve less-affluent neighborhoods, which tend to have high black and Latino populations, Spiegelman said. "One of our real achievements was that we were able to improve taxi service in South Los Angeles over the past several years," he said. The bill’s supporters say that amendments to the bill would prevent redlining certain neighborhoods and require taxis to accommodate people with disabilities, but Spiegelman says that’s just "lip service."

It’s important to note that if approved, the bill could cost Spiegelman a lot of power and influence. Spiegelman, who before he was appointed taxi commissioner was the producer of the long-running web series "Old Jews Telling Jokes," has a history of being supportive of Uber and Lyft. In 2014, his efforts to transform LA’s taxi industry into something closer in appearance to Uber and Lyft were profiled by the New Yorker. On Friday, he was featured prominently in a story on BuzzFeed that speculated that Los Angelenos were ditching their cars in favor of ride-hailing apps.

Other critics note that the bill could loosen worker protections for drivers. "Those are such terrible jobs with such few regulations that protect workers that to say the answer to the [ride-hailing] problem, and there is a problem in the sharing economy, is to say, ‘let’s just forget regulations?’" Assemblywoman Lorena Gonzalez (D-San Diego), told the Times.

As for self-driving cars, Spiegelman said the industry is crucial to California’s transportation future, and this bill could spell disaster for this important, up-and-coming sector. "This is going to make it incredibly difficult for the driverless taxi industry to come about in Los Angeles," he said. "Even more, this makes the entire state of California less ready for what’s coming up right around the corner."

"This is going to make it incredibly difficult for the driverless taxi industry to come about in Los Angeles."

For driverless taxis to work, they need to have a "profound relationship with the infrastructure of a city," he said. That includes sensors, highly detailed maps at the lane level, and real-time information from cities about possible road closures and construction. "We’re talking about a real robust network between the vehicles themselves and the city infrastructure."

Moreover, California is a hotbed for self-driving car activity, with the state’s DMV issuing permits to over a dozen automakers and suppliers in recent months to test autonomous vehicle technology. But the new bill would preclude cities from interfacing with driverless taxis, Spiegelman claimed, which could force many businesses to flee the state for more welcoming regulatory climates.

The newly formed lobbying group Self-Driving Coalition for Safer Streets, which includes Uber, Google, and Ford as members, has yet to weigh in on the bill. (A spokesperson could not be immediately reached for comment.) And the measure still needs the governor’s signature before becoming law. "Generally we don’t comment on pending legislation," a spokesperson for Brown told The Verge. "The governor has until September 30th to act on the bill."