So the state regulators have decided that it's just fine for companies that pretend not to be taxi operators  to operate taxis in San Francisco.  That means Lyft and Uber can keep picking up passengers, charging them a "recommended donation" and avoiding the regulations that San Francisco wisely put in place to protect the public .
But the fact that the state thinks this is just fine and dandy, for now anyway, doesn't mean San Francisco has to do the same. This city has the right to put rules in place for people conveying passengers within its 49 square miles -- and those rules ought to apply to Lyft and Uber and Sidecar, too.
Cabs have to carry medallions, or permits. There are a limited number, and they can't be owned by corporations, only by active cab drivers. You can buy one now -- for about $200,000 -- or you can get in line and wait, for about 15 years. If the city wants more cabs on the streets and likes the Lyft model, fine: The Municipal Transportation Agency can issue more permits, and if the venture capitalists backing Lyft want to pay for them, they can do so.
I'm not against Lyft or anyone else who has a good idea to serve the public in a way that isn't being offered now, and I agree that this is the kick in the pants a slow-moving industry needs to develop (fairly simple) apps that allow people to figure out where the nearest cab is and when it's coming.
But right now, we have an unregulated industry operating in competition with a heavily regulated industry, and it's not fair. The City Attorney's Office ought to look into this; the supervisors ought to investigate and force the newcomers to follow the rules. Sure: Lyft. But not this way.