Lyft, Uber, Sidecar Get San Francisco Prosecutor Warning

Lyft Inc., Uber Technologies Inc. and Sidecar Technologies Inc. were warned by San Francisco’s district attorney they would face legal action if the ride-share services don’t change their operations.

According to a copy of the letter provided by Sidecar, the San Francisco and Los Angeles county district attorneys conducted a joint investigation that found the company makes misleading statements on its website about the background checks of its drivers and improperly calculates shared-ride service fares on an individual-fare basis, rather than dividing the fare among passengers.

Lyft, Uber, Sidecar and other car-booking companies face growing legal challenges as they seek to crack open the U.S. taxi and limousine market, estimated by IbisWorld Research to be an $11 billion industry.

Sidecar must meet with San Francisco prosecutors no later than Oct. 8 to discuss how and when it will be able to make changes the district attorney’s office wants, according to the letter. In the prosecutors’ view, those changes won’t affect the company’s ability to continue operations.

“We value innovation and new modes of providing service to the public; however we need to make sure that the safety and well-being of consumers are adequately protected in the process,” San Francisco District Attorney George Gascon said yesterday in an e-mailed statement.

Three Companies

The district attorney sent letters to all three companies, according to a statement from his office.

“We strongly disagree with the assertion by San Francisco and Los Angeles County district attorney offices that connecting people for Sidecar shared rides is illegal,” the San Francisco-based company said in a statement. “The district attorneys are trying to enforce laws written for limousines, in an era before smartphones.”

According to the letter to Sidecar, the district attorneys want the company to remove from its app, website and other communications any statement that implies that its background checks have screened out drivers with criminal histories older than seven years. The prosecutors also asked the company to remove the shared-ride payment feature from its platform.

‘Unequivocally Supported’

“Ridesharing is unequivocally supported by the California Legislature, the CPUC, the governor, local jurisdictions across the state and millions of Californians,” Uber said today in a statement, referring to the California Public Utilities Commission. “The DAs have made numerous inaccurate assertions that we will correct and discuss with them.”

Lyft said it looked forward to discussing the matter with the authorities.

“We have worked closely with the California Public Utilities Commission over the past two years to secure a future for this innovative option throughout the state,” Katie Dally, a company spokeswoman, said in an e-mailed statement. “We are confident that we can work with the district attorneys’ offices to address the items outlined in their letter.”

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