California says Uber, Lyft vehicles must have commercial plates

CALIFORNIA — Private drivers for ride-sharing companies such as Uber Technologies and Lyft must possess a commercial license plate to operate in California under an 80-year-old law or face getting a citation, the state said.

The California Department of Motor Vehicles released a notice Jan 5 saying that a 1935 law requires any vehicle used to transport a person for hire must possess a commercial plate. The agency said it sent the reminder because the companies had received “inconsistent information about the rules”.

Uber, in a statement yesterday (Jan 23), said California’s Public Utilities Commission has ruled that only a personal registration is needed and that a law signed by Governor Jerry Brown last year affirmed that decision.

If Uber drivers are required to obtain commercial auto insurance, it could increase costs, because that coverage is more expensive than the personal insurance many ride-share drivers now carry. Under existing California law, a vehicle required to have a commercial plate doesn’t necessarily have to carry commercial insurance, said Ms Nancy Kinkaid, spokeswoman for the California Department of Insurance.

State lawmakers last year passed legislation creating a type of hybrid insurance for the ride-sharing industry. Under the law, ride-share companies operating in the state must provide at least US$200,000 (S$268,920) of insurance when a driver is on duty and US$1 million of coverage when the driver has picked up a customer. BLOOMBERG