Oops: Uber and Lyft’s new carpooling options have irked California regulators

Lyft Line and UberPool, the ridesharing companies’ new carpooling options, may not be entirely legal. The California Public Utilities Commission, which is the body that regulates ridesharing in California, sent warning letters to both Uber and Lyft Thursday, according to documents obtained by Re/Code.

UberPool and Lyft Line are “charter-party carriers” in the eyes of the CPUC. With that classification, the companies would need to charge everyone who takes the carpool collectively for the ride, instead of charging individuals different rates based on their trip route.

Uber told me, “We welcome the opportunity to share with the CPUC the significant benefits of UberPool and how it really works so that we can continue to bring its unmatched convenience and affordability to communities and traffic jams across the Golden State.” Lyft told Re/Code essentially the same thing.

Lyft and Uber are no stranger to fighting regulatory battles, and the companies were likely expecting to receive pushback for their new services. The carpooling options halves the cost of the ride, which means if these services grow they could recruit new users who otherwise couldn’t afford ridesharing.

The San Francisco Municipal Transportation Authority’s Director of Strategic Planning, Tim Papandreou, told me that at the scale Lyft and Uber are reaching, they’re going to need designated curb space soon. Carpooling only increases that likelihood. “We don’t want to return to 1990s gitneys, the white vans picking people up and dropping them off in the middle of the road,” Papandreou said. “It’s a natural evolution but unless we have good governance, good policies to make it fair and safe, and street space figured out, it’s going to be a mess.”

The CPUC has been amenable to Lyft and Uber before — after all, it is the organization that legalized them to begin with — so it’s unlikely we’ll see the sudden end of ridesharing carpooling just yet.


This story has been updated to reflect comment from Uber.