The California Department of Motor Vehicles (DMV) either slammed on the brakes, hit reverse or did an abrupt U-turn—depending on the source—just one day after it became known that the agency had informed app-driven ride-sharing companies like Uber that their drivers need to have commercial license plates on their vehicles.

“We jumped the gun, and we shouldn’t have,” DMV Director Jean Shiomoto said in a statement. “There remains uncertainty about the interaction and effect of this law governing vehicle registration requirements with the more recent regulatory and statutory changes affecting ride-share operators.”

BuzzFeed broke the news of the early-January notice (pdf) on Thursday. Assembly Republicans immediately threatened legislation to stop the DMV, prompting questions about when the last time California Republicans were relevant in the Legislature.

The DMV, in its original notice, cited the 80-year-old California Vehicle Code §260, which reads:

“A ‘commercial vehicle’ is a motor vehicle of a type required to be registered under this code used or maintained for the transportation of persons for hire, compensation, or profit or designed, used, or maintained primarily for the transportation of property.”

That seems pretty clear, but so, apparently, do other conflicting statutes and regulations. VentureBeat cites Assembly Bill 2293, which lays out insurance requirements for a “transportation network company” (i.e. Uber et al) and refers to “drivers using a personal vehicle,” not a commercial one. It was passed last year.

The state Public Utilities Commission (PUC), which has been battling with the start-ups over numerous issues for a couple of years, has not required that the vehicles have commercial plates and may have hinted otherwise. The commission has struggled to fit the burgeoning industry’s business model into existing transportation regulations designed, by and large, for the taxi industry.

The commission hasn’t gone so far as to agree with the ride-sharing argument companies’ that they are just smartphone apps, not transportation services, but it did condone drivers, many of them part-time, operating their personal vehicles. In recognizing the legitimacy of the start-ups—they have been banned in some localities and nations—the PUC tacitly agreed not to put drop-dead regulatory impediments in their way.

Requiring commercial plates could very well stop the start-ups in their tracks. It’s a cumbersome process that part-time workers and others scraping by as drivers might find too onerous. If nothing else, the threat of invoking could be a comfort to government officials when they negotiate future accommodations with Uber, the brash upstart that has raised $40 billion from investors in just a few years.   

–Ken Broder

To Learn More:

California DMV Backs Off Uber Regulation (by Alison Vingiano, BuzzFeed)

California DMV Abruptly Backtracks on Rule That Uber and Lyft Drivers Need Commercial Plates (by Daniel Terdiman, VentureBeat)

DMV to Reconsider Commercial Plates for Uber, Lyft Drivers (by Carolyn Said, San Francisco Chronicle)

Uber and Others Buck DMV on Registering Vehicles as Commercial (by Ken Broder, AllGov California)