Lyft, Sidecar face roadblocks from CA regulators over legality of ridesharing

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Lyft and Sidecar, two of San Francisco’s latest ridesharing companies, were issued cease-and-desist orders from the California Public Utilities Commission in August, the San Francisco Chronicle reported Monday, but continue to operate and deny that they lack required permits. The news comes as a continuation of the battle over city regulation of high-tech solutions to transportation and taxi alternatives, with the companies arguing that regulators are imposing unnecessary restrictions on innovation, but regulators arguing that the companies don’t provide sufficient protection for customers.

The Chronicle reports that the state’s concern is that neither Lyft nor Sidecar have the proper permits for carrying commercial passengers, and that if passengers were injured, the companies might not have sufficient insurance to cover the damages. The companies both published blog posts on Monday that disagreed with the state’s claims, noting that they do have insurance and do not operate as “charter-party carrier” companies as the state suggests.

Just last week, taxi companies in Chicago filed claims against Uber, arguing that the company keeps an unfair portion of driver tips and confuses customers with its marketing. The orders filed against Lyft and Sidecar add to this continuing tension between the legacy taxi systems, the state regulations that protect them, and the tech innovators who want to create alternative forms of transportation in the cites. Sidecar explained in its blog post that the issue is broader than just the orders issued this summer:

We feel that now is an important time to call attention to the larger question of how well our current regulatory structure is allowing technological and social innovation to thrive and provide better, safer and more convenient solutions for our citizens.  This is not just about SideCar.  This is about our right to share with one another.

Lyft executives wrote in a blog post that they’ve been in conversation with state officials, and have added insurance intended to comply with transportation regulations.

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Uninsuredunder-insured vehicle? What’s the problem? Nothing some lucrative lawsuits can’t handle.

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