California Regulators Deem Uber and Lyft’s Ride-Sharing Services Illegal

A Lyft car in California

A Lyft car in California

Uber Technologies, Lyft and Sidecar in a statement on Friday, announced that they will continue offering their new carpooling service in spite of a California Public Utilities Commission letter that calls them illegal under the state’s licensing laws.

Uber, as a matter of fact, issued a contentious proclamation ridiculed the commission for trying to suppress what it called an environmentally friendly transportation alternative that has proven to be successful with customers.

“We thought we had seen it all, and then the California PUC decided they would try to shut down app-based carpooling. The only conclusion we can come to is that the PUC doesn’t like technology, environmental progress, or anything that might make California a better place to live,” read the statement from Uber, which does not believe its UberPool option conflicts with state law.

Carpooling services from San Francisco-based Uber, Lyft and Sidecar all permit users to pay lower charges if they share vehicles with other passangers who are going in the same direction, and all say the option has been generally welcomed by consumers.

In the beginning of September, Uber declared that 100,000 individuals in the Bay Area had volunteered to test its Uberpool service.

The CPUC sent the ride-sharing companies letters, dated Sept. 8, expressing that charging riders distinctive expenses for having the same car breaches state law administering the operations of contract charter carriers. Charter party carriers incorporate limousines and charter busses, which are obliged to give paying riders exclusive uses of those vehicles. Exemptions incorporate operators of school transports, touring visits and airplane terminal shuttles.

Uber, Lyft and Sidecar are regulated by the PUC as “transportation network companies” for their shared services, which match travelers through smartphones with individuals driving for contract in their vehicles. Uber additionally has limo and taxi services.

The PUC said the organizations can attempt to change the contract party carrier law in the event that they feel it is outdated however until that happens the commission has no option yet to implement the law. It didn’t tag what kind of enforcement action will take place.

Like Uber, Lyft and Sidecar said they likewise would not quit offering the carpooling services, however their announcements were less reckless than the one from Uber, which has gotten to be known for its forceful strategies. Uber is the fastest growing and most lavishly esteemed of the three organizations, having raised $1.2 billion of capital, with Lyft in the number two opening with $333 million from investors.

“We welcome the opportunity to discuss this new form of shared transit with President Michael Peevey and the CPUC to ensure that residents continue to have access to this innovative and sustainable transportation option,” Lyft said.

The reaction from the ride-sharing companies was generally predictable with their past activities when they have confronted resistance from neighborhood regulators – a procedure of gathering substantial quantities of permission from consumers.

“We plan to continue to offer Shared Rides while we work with the CPUC to create a new framework that will support continued operation and allow us to expand Shared Rides and its benefits across the state,” said Sidecar.

 

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Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

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