(Bloomberg) -- California has retracted a notice that said private drivers for ride-sharing companies such as Uber Technologies Inc. and Lyft Inc. must have a commercial license plate or risk getting a citation.
The California Department of Motor Vehicles released a notice on Jan. 5 saying that a 1935 law requires any vehicle used to transport a person for hire must possess a commercial plate. Jean Shiomoto, director of the DMV in Sacramento, said in a Jan. 23 statement that the agency is rescinding the alert because of uncertainty about how the law relates to more recent regulations affecting ride-share operators.
Requiring drivers to obtain commercial auto insurance could increase costs for ride-share companies. Lawsuits against Uber, Lyft and other car-booking companies have mounted this year as they seek to crack open the U.S. taxi and limousine market, estimated by IbisWorld Research to be an $11 billion industry. Uber, founded in 2009, is the most highly valued U.S. technology startup.
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