Authorities in San Francisco and Los Angeles have threatened to put a brake on the popular ride-sharing services that are roiling the traditional taxi industry, accusing them of violating California state and local laws.
In a letter to Sidecar Inc, a copy of which was seen by Reuters, the district attorneys said the company’s carpooling feature violated a state law restricting service providers from charging multiple people for the same ride.
The letter, which threatened an injunction on Sidecar’s services, also said an investigation had found that the startup had been misleading users on how extensively it conducted background checks on its drivers’ criminal and driving records.
Sidecar said it strongly disagreed with the assertion that its Sidecar Shared Rides service was illegal.
“The district attorneys are trying to enforce laws written for limousines, in an era before smartphones,” a Sidecar spokeswoman said in a statement. “Sidecar will continue to operate and expand Shared Rides.”
The Wall Street Journal, quoting a spokeswoman for the San Francisco district attorney’s office, said Sidecar rivals Uber Technologies Inc and Lyft Inc were issued similar letters.
Uber and Lyft could not be reached for comment.
Ride-sharing companies, which allow customers order and pay for a taxi using a smartphone application, have faced protests from taxi unions worldwide.
Taxi drivers across Europe staged protests in June against Uber, saying it breaks local taxi rules, violates licensing and safety regulations and that its drivers fail to comply with local insurance rules.
The attorneys want the company to remove the “Shared Ride” payment feature from its platform and remove from its website, mobile app, and receipts all statements that imply Sidecar’s criminal background checks reveal a driver’s criminal history older than seven years.
The attorneys have asked Sidecar Chief Executive Sunil Paul to meet with them before Oct. 8.
(Reporting by Ankush Sharma in Bangalore; Editing by Gopakumar Warrier and Ted Kerr)