Ride-Sharing Firms Threatened With Legal Action Over Business Practices

Markets Associated Press

Ride-sharing companies Uber, Lyft and Sidecar are being threatened with legal action in San Francisco and Los Angeles over how they screen drivers and charge passengers.

Continue Reading Below

The cities' district attorneys sent letters to the three companies, warning that they could face legal action if they don't change practices representing "a continuing threat to consumers and the public," the San Francisco Chronicle reported Thursday (http://bit.ly/1naevAb ).

The legal threats are the latest challenges to the companies that have popular smartphone apps allowing passengers to order rides in privately driven cars instead of taxis. Cab and limo operators in places such as New Mexico and Washington state have sued the ride-sharing businesses. Officials in some states have enacted rules regulating the companies while other cities and states have struggled to pass laws.

In California, the district attorneys' offices, which conducted a joint investigation, say the companies falsely claim their background checks screen out drivers who have committed driving violations, sexual assaults and other criminal offenses.

The prosecutors also claim the way the companies calculate shared fares — allowing people going the same way to hop in a car and pay their fares separately — is illegal.

The district attorneys want the companies to respond to the letters by Monday and meet with authorities by Oct. 8. Otherwise, the prosecutors could file legal actions seeking an injunction and civil penalties.

Continue Reading Below

"We value innovation and new modes of providing service to the public," San Francisco District Attorney George Gascon said in a statement. "However, we need to make sure the safety and well-being of consumers are adequately protected in the process."

Sidecar issued a statement saying it strongly disagrees with the allegations and has no plans to change its operations.

"We're going to continue to operate Shared Ride," Sidecar CEO Sunil Paul said Thursday. "We think their claims are incorrect and their assertions that we are operating illegally are simply incorrect."

Uber and Lyft did not immediately respond to requests for comment Friday.

___

Information from: San Francisco Chronicle, http://www.sfgate.com