Are Ridesharing Apps Like Uber and Lyft Breaking California Law?

Consumers love the convenience of new ridesharing startup companies such as Uber, Lyft, and Sidecar offer. With a few taps on your smartphone, you can have a car waiting for you within minutes. State and local governments, however, are less in love with these companies, and have been trying to halt their services around the country. Most recently, the California Public Utilities Commission sent letters to all three companies informing them that their ride-share services violate state law.

The three letters specifically address the illegality of the ridesharing companies’ newest service, which matches up strangers going the same way, then charges each individual a reduced fare. Lawmakers are worried that, for obvious reasons, this option could negatively impact the transportation industry. They are not far off the mark, as a recent study shows that ride-sharing services have the potential to reduce the total amount of miles driven by taxis by up to 40 percent.

Nevertheless, Uber and Lyft firmly believe that their use of ridesharing technology is better for the environment and more convenient for consumers. The companies have agreed to work with the state to resolve the issue, but neither intends to change its practices in the meantime.

The California Public Utilities Commission says that only certain buses may legally pick up more than one person, drive them around, and then charge each person an individual fare. In its letters, the California Public Utilities Commission suggested that the ride-share companies should petition lawmakers to modify the state code if they think it is outdated. Until then, the Commission intends to enforce the state law prohibiting ridesharing.

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