Lyft, Uber facing fines from regulators

December 10, 2012 7:52:40 PM PST
Trying to catch a cab in San Francisco can be frustrating and at some hours, nearly impossible. That's why a handful of services have popped up to help people call for everything from a limousine to a neighbor with a car. But the new services are now being challenged by state regulators.

Before heading out as a driver for Lyft, Danielle Izsak is attaches a pink mustache to the front of her car. Every Lyft ride starts with a fist bump and at the end, Lyft's mobile app asks for a donation to compensate the driver.

Lyft is a ride-sharing service that bills itself as your friend with a car. It's similar to a service called SideCar -- intended to help car owners earn a little money on the side.

"This is about community members who have extra seats in their car, sharing those with people who need a ride," Lyft co-founder John Zimmer said. "It helps drivers cut the cost of owning an automobile."

But state regulators see something different.

"We regard these operators as essentially the same as limousine companies, drivers for hire," California Public Utilities Commission Counsel General Frank Lindh said.

So the CPUC has slapped Lyft and Sidecar with $20,000 fines.

"We do believe they're operating outside the law right now; they don't have proper insurance, their drivers are not properly screened and so we do have concerns about public safety of these operations," Lindh said.

Mohamed Mandour owns an actual limousine, which he keeps busy 24/7 with the exploding popularity of Uber, the limo-summoning smartphone app.

"Last Sunday, one of my drivers start at 10 p.m., he finished by 6 in the morning and he had enough business all night," Mandour said.

But Uber is also facing a $20,000 fine that their general manager is contesting.

"I think that there are no laws that regulate what Uber does, because what Uber does didn't exist a couple of years ago," Ilya Abyzov said.

They'll get to make that argument before state panel that's setting new rules.

They'll have the opportunity to participate, and other members of the public as well," Lindh said.

When state regulators open the issue for public comment, some of the loudest opposition is likely to come from taxi drivers, who say without question, these new services have made it tough for them to make a living.

What they're doing is identical to taxi service; it's exactly the same service we provide," Green Cab driver and co-owner Mark Gruberg said.

Gruberg says he wants them regulated the same way.

"You can't have two systems where one side is completely unregulated and the other is regulated; that creates an uneven playing field," Gruberg said.


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