Uber, Lyft hit with cease and desist orders in Virginia

State DMV orders the ride-for-hire services to stop operating within the state or face fines.

lyft_driver.jpg
Lyft

The battle between ride services Uber and Lyft and the state of Virginia is kicking into high gear.

After issuing civil penalties against the app-based services in April for operating without proper permits, Virginia's Department of Motor Vehicles sent cease and desist letters to Uber and Lyft on Thursday. The letters, penned by Richard D. Holcomb, commissioner of the Virginia DMV, orders the companies to stop operating in violation of state laws or face fines.

"I am once again making clear that Uber must cease and desist operating in Virginia until it obtains proper authority," Holcomb said in one of the letters.

Both companies said they were disheartened and shocked by the letters but hoped to work with state officials on a solution that will allow the services to continue operating in the state.

"Uber has been providing Virginians with safe, affordable and reliable transportation options for months and has continued to work in good faith with the DMV to create a regulatory framework for ridesharing," Uber spokesperson Natalia Montalvo said in a statement. "The DMV decision today hurts thousands of small business entrepreneurs who rely on the Uber platform to make a living, create new jobs and contribute to the economy -- and it hurts the countless residents who rely on Uber to connect them with affordable, safe and reliable transportation alternatives."

Noting that the state's transportation rules predate the growing acceptance of mobile apps, a Lyft representative told CNET the company was focused on revising state laws regarding ride-for-hire laws.

"As many of the current regulations surrounding taxis and limos were created before anything like Lyft's peer-to-peer model was ever imagined, we're committed to continuing to work with state officials to craft new rules for this new industry," Lyft spokesperson Chelsea Wilson said in a statement. "We truly believe that if we approach situations like this positively and collaboratively, we can work together with local leaders to greatly improve transportation access, safety and affordability."

Holcomb wrote that Virginia was currently studying the relationship of the ride-sharing services' business models and the state's passenger carrier laws and "strongly suggest[ed]" that the companies focus on participating in the study rather than continue their "illegal operations."

Using mobile apps to connect passengers with part-time drivers of private cars, oftentimes for less than the cost of a traditional taxi or car service, both companies have grown in popularity in recent years and expanded to cities around the US and world. Lyft, which launched in 2012, operates in 60 US cities while Uber's four-year-old service has a presence in 35 countries and more than 100 cities.

But those journeys have not been without regulatory roadblocks. Virginia's DMV fined Uber and Lyft $26,000 and $9,000, respectively, in April for providing rides in the state without being in possession of permits. Resistance to the model has been particularly heated in New York, where taxi officials initially stopped Uber and other car hailing apps from entering the market. Uber was able to prevail and now runs its peer-to-peer service using drivers who are licensed by the Taxi and Limousine Commission.

Uber has also had a tough time in Europe. In Spain, where it recently launched, Uber is facing prohibition by transportation legislation that outlaws any type of for-profit private transportation. Protests by taxi drivers in Paris have turned violent, with vehicles sustaining smashed windows and flat tires, while in London, black cab drivers have taken the company to court.

 

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