Three San Francisco-based ridesharing startup companies have been fined $20,000 each by the California Public Utilities Commission, which says they are operating without proper permits, state regulators announced today.
Uber, Lyft and SideCar were cited by the CPUC for violations that include operating as passenger carriers without evidence of public liability and property damage insurance coverage and failing to enroll drivers in controlled substance and alcohol testing programs.
Uber offers on-demand rides around the city in town cars and other vehicles while SideCar and Lyft offer donation-based ridesharing services. The companies have come under criticism from local taxi drivers who say the companies are unregulated and take away potential customers.
The CPUC in August issued cease-and-desist letters to Lyft and SideCar after sending a similar letter to Uber in October 2010. The state regulators insist that each company is a charter-party carrier of passengers that falls under the jurisdiction of the CPUC.
“This is a matter of public safety,” Brigadier General Jack Hagan, director of CPUC’s consumer protection and safety division, said today in a statement.
“If something happens to a passenger while in transport with Lyft, SideCar or Uber, 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,” Hagan said.
Each of the three companies has argued that they do not fall under the definition of a charter-party carrier.
Sunil Paul, CEO of SideCar, issued a statement on the company’s website today again denying that definition.
“We established SideCar to allow drivers and passengers to connect with one another under the safe harbor of the ridesharing provisions of the law,” Paul wrote. “We neither own nor operate cars. We neither employ nor use contract drivers.”
He wrote that his company will “continue our conversations with the CPUC and other authorities in order to educate them on the value of SideCar and the sharing economy as a whole.”
Uber was also the target of a class-action lawsuit filed last week by San Francisco taxi drivers.
The lawsuit, filed by attorney Gary Oswald, argues that Uber’s drivers are not licensed in the city as limousine or taxi drivers and are taking fares from law-abiding cabbies.
“By ignoring the law, Uber is putting at risk the livelihoods of hardworking men and women who drive safely and follow the rules,” Oswald said in a statement.
The complaint was filed last Friday in San Francisco Superior Court.
Dan McMenamin, Bay City News