San Francisco Prosecutor Issues Warning to Lyft, Uber, Sidecar

Lyft Inc., Uber Technologies Inc. and Sidecar Technologies Inc. were warned by San Francisco’s district attorney they would face legal action if the rideshare 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.

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 that the district attorney’s office said won’t effect the company’s ability to continue operating, according to the letter.

“We value innovation and new modes of providing service to the public; however we need to make sure that the safety and wellbeing 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. Representatives of Uber and Lyft didn’t immediately respond to requests yesterday seeking comment on the letters sent to them.

“We strongly disagree with the assertion by San Francisco and Los Angeles County District Attorney Office’s 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.