California Suggests Classifying Uber As A Charter-Party Carrier

One California regulator believes Uber should be classified as a charter-party carrier – the same type of transportation as limousines and tour buses.

According to Reuters, a commissioner for the California Public Utilities Commission (CPUC), who has been working on a proposal on regulating Uber, said she believes the company should be classified as a charter-party carrier.

The transportation category – also known as TCP – includes services offering pre-arranged transportation, such as a sightseeing tour, which must comply with certain licensing, insurance and inspection requirements.

The proposal found that Uber qualified as a TCP because it “exercises extensive control” over its drivers and customers, creating the software for hailing a ride, calculating fares and billing riders, and completing criminal background checks on drivers and vehicle inspections.

The ruling stated that Uber has been operating as a TCP since at least October 2010, and as part of the proposal, the company would be required to pay three years of back fees, the maximum allowed under state law.

Interestingly, the decision does not affect San Francisco-based Lyft, Uber’s biggest rival in the state.

An Uber spokesman said the company was reviewing the proposal and will file a response.

This is just the latest legal blow for Uber. Last year, the company lost an important battle in Europe when the European Union’s highest court ruled that the ridesharing service is, for all intents and purposes, a taxi service that must comply with all the rules that traditionally govern taxi associations. Uber had argued that it was an online platform that matches passengers with drivers.

That ruling could be costly for Uber because, under the new paradigm, Uber drivers are legally hired chauffeurs, not independent contractors pulling jobs off the online platform.

As far as the CPUC’s findings, it’s unknown how Uber’s business would be affected if the proposal is enacted, but the specific TCP requirements for alcohol and drug testing and workers’ compensation would likely have a significant impact on how the company interacts with its independent drivers.