California has become the first state in the nation to issue regulations on ride-sharing services, which are growing fast in popularity across the country, The Los Angeles Times reports.
Under the new rules issued by the state’s Public Utilities Commission, ride-sharing companies—which connect paying passengers with drivers who use their own vehicles—will have to meet safety and insurance requirements. Drivers will have to undergo criminal background checks and driver training and carry at least $1 million in liability insurance coverage.
According to the LA Times, the decision pre-empts the efforts of California cities to regulate or ban the new industry.
Conventional taxi firms see ride-sharing services like Lyft as a threat to their business model. “Its hard to see how the taxi industry with its rules and regulations and responsibilities can compete with a service that has none of those requirements,” a representative of the United Taxi Cab Workers of San Francisco told the LA Times.