Uber and Lyft are two of the most well-known modern taxi services in the United States. In California though, a new regulation that was imposed by the state Department of Motor Vehicles, created a regulatory measure that would have required all drivers for those two services to plate their vehicles with commercial license plates. As that memo was released during the week, the California DMV quickly retracted it, issuing a statement late Friday evening. In that statement, the DMV said, “there remains uncertainty” regarding how such a law would impact the operation and the business.
They went on to say “We jumped the gun, and we shouldn’t have. The matter requires further review and analysis that the department is undertaking immediately.” How that impacts the future of the two services remains somewhat cloudy at this point. It’s unclear what the impact will be long-term, especially if the California DMV eventually moves to push that to the next step after taking more time to look into the matter. The original statement that the California DMV released when the change went into motion said, “any passenger vehicle used or maintained for the transportation of persons for hire, compensation, or profit is a commercial vehicle.” The memo even said that “Even occasional use of a vehicle in this manner requires the vehicle to be registered commercially.”
The changes though are something that might be too much for these types of companies to endure. Many analysts have pointed out that the insurance ramifications, the licensing cost, and the other assorted costs that would come along with offering these types of services would do damage to the business model as a whole. Many of the vehicles that are used by Uber, and Lyft are personal vehicles and registered as such. Having to go through and change the registration on all of these vehicles isn’t just expensive, it’s a headache that many wouldn’t be eager to take on. Both companies cited a large number of employees who are part-time or just occasional drivers ultimately being driven away from the companies if such a law were put in place.
This though exposes the interesting battle that is taking place between Lyft and Uber. Uber who has had their share of legal issues, and other marketing issues throughout the United States, and the rest of the world – is seeing a lot of competition from their rival Lyft. Lyft though is in the process of making their trademark a little less noticeable, according to some. The company announced that they would make their pink mustaches glowing additions on the front of a car, instead of being the typical, large and fluffy mustache that they are currently used to.