After mulling over how to regulate semi-legal ridesharing services like Lyft, SideCar and Uber, the California Public Utilities has handed down a proposed ruling that would create a new set of regulations for the services and label them as "Transportation Network Companies," rather than taxi or limo services.

The CPUC ditches the "ridesharing" term we've gotten used to lately and defines TNCs as any company that connects riders with drivers via an online platform. If you're using an app and your ride is driving their own car, then you're using a TNC.

As for regulation, the CPUC's recommendations mirror closely what SideCar and Lyft implemented early on: $1 million-per-incident insurance policies for every vehicle, a zero-tolerance drug and alcohol policy, background checks for drivers and driver training programs. The company's themselves will be licensed with the CPUC.

In a blog post yesterday, Lyft co-founders John Zimmer and Logan Green pointed out their service already performs these safety measures as well as in-person screenings, vehicle inspections and a peer-review rating system. Likewise, SideCar CEO Sunil Paul called the CPUC's ruling "a critical milestone" and that his company, "couldn’t be more pleased with this outcome and applaud the CPUC for moving in favor of transportation innovation and consumer choice."

Uber, which operates in San Francisco, LA, San Diego and Sacramento, also piled on to the back-patting, saying the commission's decision reaffirms an agreement the company signed with the CPUC earlier this year. It does not affect the company's Uber Black towncar service, but the new rules will apply to the cheaper UberX hybrid car service.

Despite all the positive affirmations, the ruling did determine that the "by donation" payment system used by Lyft and SideCar was basically a smokescreen: "We reject the arguments made by Lyft and SideCar that any payment for rides arranged through their apps is voluntary," the report reads, "and find that TNCs are engaged in the transportation of persons for compensation."

A few more hurdles stand in the way before these recommendations become legislation, however: The commission will vote on them in early September and there may be a need for formal state legislation. There's also the matter of airport rides, which have become a sticking point as the services don't pay the airport entrance fee taxi companies are subjected to.

Anyhow, now that we've got the ridesharing pretty much figured out, someone ought to get to work on an actually useful water taxi service. It apparently works in Amsterdam:

Previously: SFO Cracking Down On Rideshare Drivers With Citizen Arrests
Ridesharing Gets A Reprieve: PUC Agrees Uber & Lyft Are Both Legal For Now
[CPUC Document]