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Two San Francisco-based ridesharing companies defended themselves today against allegations from state regulators who say that they are operating without proper permits.

The California Public Utilities Commission issued cease-and-desist letters in August to SideCar and Lyft, two companies in San Francisco that offer donation-based ridesharing services via smartphone apps.

The CPUC wrote in its letters that each company was a “charter-party carrier of passengers without a valid authority in force with the Commission.”

The letters ordered both companies to cease operations or risk vehicle impoundments and a misdemeanor that could lead to a $5,000 fine, up to three months in jail or both.
Both SideCar and Lyft both issued statements on their websites today defending themselves while also pledging to work with the CPUC.

“SideCar is not a charter-party carrier,” SideCar co-founder Sunil Paul wrote. “Drivers using the SideCar app do not set prices and are not operating as ‘cars for hire.'”

Paul wrote, “We understand that the PUC has valid concerns about the safety and fairness of transportation options available to consumers. In fact, we have been meeting regularly with the PUC to discuss those concerns and how SideCar is addressing them.”

He wrote, “We feel that now is an important time to call attention to the larger question of how well our current regulatory structure is allowing technological and social innovation to thrive and provide better, safer and more convenient solutions for our citizens.

“This is not just about SideCar. This is about our right to share with one another,” Paul wrote.

Lyft co-founders Logan Green and John Zimmer, whose vehicles sport pink moustaches on them, also posted a statement on their company’s website today defending their business model.

“From the beginning, we carefully designed the service to be in full compliance with the law. Additionally, we’ve gone above and beyond current requirements by offering a first-of-its-kind $1 million excess liability insurance policy to give both drivers and passengers peace of mind,” the pair wrote.

They wrote, “We took the letter as an opportunity to open a conversation with the CPUC and explain what we’re all about. Since receiving the letter, we’ve had productive conversations with CPUC staff about how these services greatly benefit the local community and complement existing alternatives.”

The services have come under criticism from local taxi drivers who say that the companies are unregulated and take away potential customers from them.

The CPUC sent a similar cease-and-desist letter in October 2010 to Uber, another San Francisco startup that offers on-demand car rides in town cars and other vehicles.

The company remains in operation despite the letter and has since spread to other cities around the country.

Photo: Handsome In Pink

Dan McMenamin, Bay City News

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  • Dean Clark

    Taxi drivers are not getting the big picture. People in San Francisco are tired of being told they do not take credit cards and that taxi drivers do not want to take them where the passenger wants to go. Taxi drivers need to understand they are driving a taxi and need to service the community in which they drive their taxis!

    I find it amazing that the PUC would attack ride shares. Where was the PUC when I had an accident while driving for National Cab Company as a taxi driver? I was involved in an accident where I was hit by an uninsured motorist. National Cab Company did not carry uninsured motorist on the vehicle I was driving. There is a state law to carry uninsured motorist coverage, how can taxi companies not have to follow state law in San Francisco? After the accident I reported that fact that air bags were not deploying in several National Cabs to OSHA and the SFMTA nothing happened. If the cab companies are complaining about these apps then the PUC should be fair and investigate public and driver complaints on Cab Companies in San Francisco. (there is a lot of them through the 311 system!)

  • Dean Clark

    Taxi drivers are not getting the big picture. People in San Francisco are tired of being told they do not take credit cards and that taxi drivers do not want to take them where the passenger wants to go. Taxi drivers need to understand they are driving a taxi and need to service the community in which they drive their taxis!

    I find it amazing that the PUC would attack ride shares. Where was the PUC when I had an accident while driving for National Cab Company as a taxi driver? I was involved in an accident where I was hit by an uninsured motorist. National Cab Company did not carry uninsured motorist on the vehicle I was driving. There is a state law to carry uninsured motorist coverage, how can taxi companies not have to follow state law in San Francisco? After the accident I reported that fact that air bags were not deploying in several National Cabs to OSHA and the SFMTA nothing happened. If the cab companies are complaining about these apps then the PUC should be fair and investigate public and driver complaints on Cab Companies in San Francisco. (there is a lot of them through the 311 system!)