Oh Uber, why can't you just be a benevolent force for cheap rides? Because it's apparently impossible to be both. To keep its rides less expensive than taxis, Uber has had to cut all kinds of corners—both San Francisco and Los Angeles have sued the company for allegedly cutting corners on background checks, along with other violations, and their drivers have accused them of terrible labor practices. Uber doesn't have to treat their drivers too well, though, because it calls them independent contractors, more or less just regular folks who might sometimes decide to give someone a ride, for a fee, which Uber takes a cut of. And Uber insists that its UberX drivers do not, in any way, need commercial licenses. The California DMV disagrees, but the state hasn't done a lot of enforcement. However, some Southern California drivers went ahead and got commercial licenses anyway. So Uber suspended them.
Uber has recently suspended accounts for "at least a dozen" UberX drivers who got their cars properly licensed, according to Buzzfeed. The drivers belong to a group who took advantage of Uber's financing program for new cars; the program pairs drivers with lenders willing to finance cars with ultra-risky subprime loans that carry high interest rates, and in this case the dealer insisted on the commercial registration.
The Buzzfeed story includes a polite letter from Uber to an offending (i.e. law abiding) driver they financed. It reads:
"We are showing your vehicle registration is actually a commercial vehicle registration. We will need you to contact the DMV to have them update your vehicle registration to personal/automobile registration. We are unable to accept commercial registration on an uberX account." The driver was suspended from Uber shortly after. (Fancier Uber Black drivers are required to have the proper licenses.)
Why does Uber want to go out of its way to ensure its drivers are not registered as commercial drivers? Commercial insurance, which is required with a commercial license, costs a lot more money, but UberX drivers generally pay their own insurance and Uber already carries an umbrella commercial insurance policy on all its drivers, according to its website. More likely, Uber is worried that a commercial classification will trigger all sorts of regulations it doesn't want to deal with, like the kind that taxi operators have to follow. Uber keeps costs low by calling itself a "ridesharing" company and saying it's not covered by those laws. On the bright side, Los Angeles is about to start requiring all of its fully-regulated, insured, licensed, and background-checked taxis to use a convenient hailing app, like Uber's.
Update 12:50 pm: A rep for Uber emails to say that the California Public Utilities Commission allows drivers for companies like Uber to have private licenses, but "How a driver registers his/her vehicle is up to that driver. Uber does not require a driver to register his/her vehicle as personal, and it is not our policy to deactivate a driver for registering his/her vehicle as commercial."
· Flouting Law, Uber Suspends Drivers For Properly Registering Cars [BuzzFeed]
· Why Los Angeles Uber Drivers Say It Sucks to Be Them [Curbed LA]