California DMV Retracts Controversial Memo on Ridesharing License Plates

After complaints from Uber, Lyft and Sidecar, the Department of Motor Vehicles changed course, saying it jumped the gun on requiring rideshare drivers to register as commercial vehicles.

by / January 27, 2015

Chalk one up for ridesharers. Uber, Lyft and Sidecar won their latest battle against regulators in California after the state's Department of Motor Vehicles (DMV) retracted a memo requiring those company’s drivers to register their vehicles as commercial vehicles.

The DMV admitted it made a mistake following complaints from leadership at all three companies, which cited agreements with the California Public Utilities Commission (CPUC). "We jumped the gun, and we shouldn’t have," California DMV Director Jean Shiomoto told The Huffington Post.

Uber, Lyft and Sidecar drivers use personal vehicles to offer taxi service, clocking on and off the clock as they please. In the DMV’s original memo, it was noted that "any passenger vehicle used or maintained for the transportation of persons for hire, compensation or profit is a commercial vehicle," and that "even occasional use of a vehicle in this manner requires the vehicle to be registered commercially.” 

Enforcement of such a rule, which has been in place since 1935, would have required drivers to acquire commerical license plates, pay higher fees and submit additional paperwork. While Uber, Lyft and Sidecar are technically commercial endeavors, it’s the peer-to-peer business model that differentiates their drivers from those in traditional businesses, Lyft spokeswoman Chelsea Wilson said.