On-demand ride-sharing services Lyft, Uber and Sidecar were fined $20,000 for operating what the CPUC alleges are illegal operations.
Last we spoke to ride-sharing start-up Lyft, they were attempting to work with the California Public Utilities Commission to quash a cease-and-desist that would put a halt on the phone app’s growing popularity. Co-founder John Zimmer expressed the company’s desire to create a positive relationship with the CPUC:
“We believe that the CPUC has an important job of consumer protection…”
But if the news has told us anything over the last couple of days, it’s that the CPUC — and The City’s cab companies — aren’t going to let these new kids on the block maintain business without a couple more battle scars.
SFGate reported Wednesday that Lyft, along with other ride-share companies Uber and SideCar, were each fined $20,000 for not having permits to operate what amount to illegal taxi and limousine services.
One issue cited by the CPUC was a lack of insurance to cover property damage. In response, Lyft said they had already arranged for $1 million in per-incident insurance, well above the $750,000 the PUC requires.
Not to mention that two cabbies for Luxor filed a class action lawsuit on Friday against Uber, accusing them of unfairly competing with legally sanctioned cab companies.
Requests for comment from the Lyft co-founders were not answered by the time of publication.
The CPUC, on the other hand, claims that these companies are still not in compliance with its safety regulations. In a statement to VentureBeat, Jack Hagan, Director of the CPUC’s Consumer Protection and Safety Division wrote:
“If something happens to a passenger … it is the responsibility of the CPUC to have done everything in its power to ensure that the company was operating safely according to state law.”
In a fight against the clock — which gives the companies in question 20 days to file an appeal or pay the fine — Zimmer and co-founder Logan Green sent an email to all outlets with an interest in keeping their company afloat. The email pleads:
“Peer-to-peer transportation is worth defending and we stand by our community of mustache-sporting Lyfters.”
There are a couple of similar companies on the East Coast that are operating under a similar model: http://us.amovens.com/en for example, but I don’t think the drivers have to necessarily register through the DMV or anything. I wonder if that makes them less vulnerable to litigation.