Fight the power! Ride-sharing startup Lyft rallies to fight legal charges

In their efforts to bring disruptive new transportation services to urban residents, ride-sharing startups may be fighting a losing battle.

In the face of hefty citations, Lyft, the mobile app that lets you order a moustache-adorned car to pick you up in a matter of minutes, is rallying the San Francisco’s tech scene to speak up in its defense.

Today, the California Public Utilities Commission issued $20,000 fines to Uber, Lyft and SideCar for illegally operating. Among the charges: a lack of evidence of property damage insurance coverage and evidence of workers’ compensation insurance, and failure to enroll drivers in the Department of Motor Vehicles Employer Pull Notice Program.

It didn’t take long for the community to rally, and urge the authorities to stand down. An email signed by John Zimmer and Logan Green, cofounders of Lyft, has been making the rounds, popping into my inbox twice in the space of an hour.

In the email, the founders made clear that they responded to the CPUC “immediately” and had a positive follow-up meeting.

They also claimed to have gone above and beyond the call of duty when it comes to their liability insurance. The CPUC requires that licensed sedans carry $750,000 of liability coverage, but Lyft implemented a $1 million excess liability policy.

In their own words:

We respect the CPUC’s role in protecting public safety, and we share safety as our top priority. Lyft’s driver screening process uses criteria based on criminal background checks and DMV record checks that are more strict than any other form of transportation. We also have a higher bar for insurance. We will continue to work with the CPUC to ensure our shared goals for consumer safety are met.

The email pleads for the support of anyone with a vested interest in keeping the sharing economy alive. “Peer-to-peer transportation is worth defending and we stand by our community of mustache-sporting Lyfters,” it reads. The authors link to a petition started by a member of Change.org, the online petitioning site that is frequently leveraged by Uber users in its uphill battle against metro transit authorities.

According to the CPCU, startups like Lyft and SideCar are still not in compliance. “If something happens to a passenger while in transport with Lyft, SideCar, or Uber, it is the responsibility of the CPUC to have done everything in its power to ensure that the company was operating safely according to state law,” Brigadier General (CA) Jack Hagan, Director of the CPUC’s Consumer Protection and Safety Division said in a statement.

“That means that the company has insurance to cover an accident and that its employees are protected and are suitable drivers. I look forward to working with these companies to bring them into compliance with our safety laws,” Hagan added.

Top image // Christina Farr, VentureBeat