The California Public Utilities Commission (CPUC) released a proposal this week that could legitimize and give a shot in the arm to ridesharing companies. Last month the CPUC (which in California oversees most private transportation services) fined LyftSidecar and Uber $20,000 for operating as passenger carriers without authorization. While taxi companies have howled that such new ridesharing firms are cutting into their businesses, these companies, as well as their users and customers, respond that such collaborative consumption services fill a void traditional transportation options do not fulfill. In October the CPUC’s attorneys slapped these three companies with cease-and-desist orders, which so far the companies and their fans have ignored.

Should the CPUC at its December 20 meeting approve the proposal in its current form, the result could be six months of deliberation to gauge how these companies these companies could meet insurance, ridesharing and public safety requirements. Lyft and Sidecar have insisted that they are entitled to a ridesharing exemption; Uber, which works with CPUC-approved professional drivers and has aggressively expanded in the U.S. and abroad, has been particularly aggressive in confronting regulators in municipalities who have insisted on shutting the service down.

The CPUC claims that ridesharing services have presented regulators with “a situation not countered before: the use of mobile communications and social networks to connect” people who need a ride and commuters who are in a position to offer such transportation. In the San Francisco Bay Area, ridesharing has caught on in part because the current transportation infrastructure is not adequate enough to support the area’s surge in population--which is why the “casual carpools” that for years have lifted commuters from the East Bay and other cities such as Vallejo and Fairfield have long been popular.

Among the two biggest hurdles for ridesharing to scale are the car insurance companies, which understandably are skittish about their customers relinquishing their cars temporarily for commercial use. More laughable are the protests by taxi companies, who have long been successful at stifling the expansion of permits--especially in San Francisco--while offering service that at best is marginal. And so regulators have got to face a new reality: the sharing economy is here to stay with its advocates’ passion to share resources and connect with one another in new ways. And it is up to regulators to find ways for these services to complement traditional transportation services as they only become more popular--taxi drivers will not suffer the same fate as buggy whips anytime soon, but confrontation instead of co-existence will only push these companies to irrelevance. While some sharing economy fans will chafe that their favorite companies are in the crosshairs of regulators, such attention is a sign that this new business model is maturing and becoming more relevant.

Published earlier today on Triple Pundit. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).

Image credit: Lyft

About The Author

Leon Kaye

Leon Kaye is the founder and editor of GreenGoPost.com. Based in California, he is a business writer and consultant. His work is has also appeared on Triple Pundit , The Guardian's Sustainable Business site and has appeared on Inhabitat and Earth911. His focus is making the business case for sustainability and corporate social responsibility. He's pictured here in Qatar, one of the Middle East countries in which he takes a keen interest because of its transformation into a post-oil economy. Other areas of interest include sustainable development in The Balkans, Brazil and Korea. He was a new media journalism fellow at the International Reporting Project, for which he covered child survival in India during February 2013. Contact him at leon@greengopost.com. You can also reach out via Twitter (@LeonKaye) and Instagram (GreenGoPost). As of October 2013, he now lives and works in Abu Dhabi, United Arab Emirates.