Uber, Lyft, Sidecar get cease-and-desist letters from LA

The Los Angeles Department of Transportation is ordering the three ride-sharing apps to halt all vehicle operations "immediately." However, the companies say there aren't grounds for such demands.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
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Uber's ride sharing app. Uber

Los Angeles is the newest in a long line of cities to pick a fight with ride-sharing apps. Uber, Lyft, and Sidecar all received cease-and-desist letters from the Los Angeles Department of Transportation on Monday.

The Department of Transportation claims the companies are operating "unlicensed commercial transportation service in the City of Los Angeles in violation of Los Angeles Municipal Code." The Department is demanding that the companies halt all vehicle operations "immediately."

"In the interest of public safety, your company and all drivers and vehicles dispatched via your mobile app sysem [sic] are hereby directed to cease and desist from picking up passengers within the City of Los Angeles unless and until all such vehicles are permitted through the California Public Utilities Commission," reads the letter by Thomas Drischler, taxicab administrator for the LA Department of Transportation, which was sent to Uber CEO Travis Kalanick. Letters with almost identical wording were sent to Sidecar's CEO and Lyft's president.

However, when contacted by CNET an Uber spokesperson said that the company's vehicles have been permitted through the California Public Utilities Commission for the entire state.

After getting a $20,000 citation and cease-and-desist letter from the PUC last November, Uber signed an agreement with the PUC in January that authorized it to operate throughout California as long as it followed all safety requirements. Sidecar and Lyft also signed agreements with the PUC.

"Yesterday's cease and desist letter from a taxi regulator within the Los Angeles Department of Transportation (LADOT) is similar to what we received when we first launched in San Francisco one year ago," said Lyft co-Founder and President John Zimmer in a statement e-mailed to CNET. "Since that time, we have signed an operating agreement with the California Public Utilities Commission (CPUC), which allows us to operate legally throughout California. The CPUC operating agreement clarifies that we are not a taxi and demonstrates that this is a state issue."

Zimmer also said that Lyft is stringent in following all safety requirements, including having excess liability insurance, criminal background and DMV record checks on all community drivers, in-person screening and vehicle inspection, zero-tolerance drug and alcohol policy, and more. Both the Uber spokesperson and a Sidecar spokesperson said that they have also strictly complied with all of the PUC's safety measures.

It appears the companies believe that despite receiving the cease-and-desist letters, they still have grounds to provide their car services in LA. A spokesperson for Sidecar told CNET that "Sidecar will continue to operate in Los Angeles."

Companies like Uber, Lyft, and Sidecar have been working to bring ride-sharing apps to metropolitan areas across the U.S. over the past year or so. However, they have come up against many regulatory hurdles. After a long back-and-forth with New York's Taxi and Limousine Commission, the city finally started allowing ride-sharing apps in a pilot program in April. And, other cites, like Chicago, Washington, D.C., Denver, Miami, and San Francisco, have also had their battles with these companies in the past.

"As with innovations and movements before us, there will often be challenges and hurdles along the way," Zimmer said. "We are already in contact with the office of Mayor Villaraigosa, and have received encouraging signs that the Mayor and his successor, Mayor-elect Garcetti, recognize the value of our community and plan to work supportively with us moving forward to address the DOT's concerns."

(Via Southern California Public Radio).

Updated at 5:50 p.m. PT with comment from Sidecar spokesperson.