The services are a popular new way to get around: online app-based rideshare companies have many people using as an alternative to taxis.
The California Public Utilities Commission unanimously voted Thursday to require a new set of rules for companies like Lyft, Sidecar and Uber, that allow drivers to use their own cars to pick up passengers.
"Does regulation have a role to play in this new form of business? Yes, I believe it does, very much so," said CPUC President Michael Peevey.
The companies will now have to make sure drivers undergo criminal background checks and training, and have liability insurance, but an attorney representing taxicab companies says the new regulations don't go far enough.
"The regulations that are going to be adopted need to be far more strict, to have far more enforcement capability, and finally. to parallel those of the taxi industry," said Paul Marron, counsel to the Taxicab Paratransit Association of California.
Sidecar co-founder and CEO Sunil Paul says he thinks the new rules are a good thing, legitimizing his business.
"The PUC has acted to encourage safety, and to encourage innovation and consumer choice," said Paul.
Hundreds of cab drivers took to the street outside L.A. City Hall in June to protest the companies they say are stealing business and not playing by the rules.
Thursday cab driver Ed Healy spoke out about the CPUC decision.
"If you put those many cars on the street, they're going to be taking away business," said Healy.
Lyft driver Justin Riley says he sees the decision as a victory for Lyft and is excited by the news.
"You have people who are genuinely just trying to help another person," said Riley. "With Lyft, it's providing a transportation method to get someone from point A to point B."
The Taxicab Paratransit Association says it will be studying the decision thoroughly before deciding whether to challenge it.