The California Public Utilities Commission today approved a rule-making process that will allow it to move forward with drafting regulations for ridesharing companies.

The commission made the move today in response to the emergence of companies like Uber, Lyft and SideCar, all based in San Francisco.

The companies use smartphone technology to link drivers to passengers–Uber offers rides in town cars and other vehicles, while Lyft and SideCar provide donation-based ridesharing services.

The CPUC’s written order creating the rule-making process said the commission “has a responsibility for determining whether and how public safety might be affected by these new businesses.”

The regulators are seeking clarity on a number of issues, including whether the companies’ services constitute ridesharing under state law, as well as what insurance is necessary for the drivers and what compensation level should be set for them.

“The purpose of this rulemaking is not to stifle innovation and the provision of new services that consumers want, but rather to assess public safety risks,” the order states.

The CPUC has previously fined each company $20,000 for violations of the current regulations. The agency also issued cease-and-desist letters to Lyft and SideCar in August after sending a similar letter to Uber in October 2010.

The three companies have come under criticism from San Francisco taxi drivers, many who spoke at today’s meeting.

Barry Korengold, president of the San Francisco Cab Drivers Association, said the companies are trying to legitimize an illegal operation. Korengold said the lack of oversight endangers potential passengers.

“There’s no way for the public to know who is picking them up,” he said.

Lyft co-founders Logan Green and John Zimmer posted a statement on their company’s blog after the CPUC announced earlier this month the proposal to create the rule-making process.

“This is an encouraging sign,” the statement said.

“We respect the CPUC’s role in protecting public safety, and we share safety as our top priority,” the co-founders said, noting that the company is the first of its kind to require a $1 million excess liability insurance policy for its drivers.

The CPUC’s order states that the rule-making process will include workshops and the acceptance of written comments rather than evidentiary hearings, with the panel making a decision on the regulations after six months.

Anyone interested in participating in the process is asked to contact the commission’s process office at 505 Van Ness Ave. or

Dan McMemamin, Bay City News

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