Why Aren't Uber and Lyft Railing Against Legal Threats from SF and LA?
Yesterday, the district attorneys from San Francisco and Los Angeles sent letters to Uber, Lyft, and Sidecar threatening potential legal action, including an injunction to their service unless they make "major changes" regarding background checks and pricing. So where's the usual bombast and bluster about antiquated laws and taxi cartels?
Uber and Lyft have responded quickly to crackdowns in New York and Washington D.C. before, rallying investors, loyal users, and even celebrities to the sharing economy cause. But there's nothing on the Uber or Lyft blogs, which both had new posts this week, or their Twitter accounts. There's not even a multi-part venture capitalist invective. I couldn't even find a self-righteous subtweet from the usual suspects.
Incumbents see an opportunity and ask, "how can we solve this with what we have?" New entrants see one and ask, "how should this be solved?"
— Aaron Levie (@levie) September 21, 2014
So why not protest on their home turf? I've reached out to both companies and will update if we hear back. But it might be because district attorneys' demands sound fairly reasonable.
The San Francisco Chronicle reports:
The district attorneys told all three companies that they misled customers by claiming their background checks of drivers screen out anyone who has committed driving violations, including DUIs, as well as sexual assault and other criminal offenses. The district attorneys say that's patently untrue.
[District Attorney George] Gascón in June charged Uber driver Daveea Whitmire, 28, of striking a passenger. He had passed the company's background check, but court records showed he had previously been convicted of felony drug dealing and misdemeanor battery.
Gascón wants the companies to remove all statements from their mobile apps, websites and other publications that imply their background checks reveal drivers' complete criminal history.
The district attorneys also told all three companies that their new shared ride service fares — in which individuals going the same way can hop in a car and pay their fares separately — are calculated in a way that violates state law. Gascón wants the shared-ride payment features removed from the companies' offerings.
According to the Wall Street Journal:
"We want to make sure that there is sufficient insurance to protect the public," Mr. Gascon told San Francisco television broadcaster KCBS at the time.
So far, Sidecar CEO Sunil Paul is the only one reprimanding the regulators:
Sunil Paul, chief executive of Sidecar, said he has discussed the issue of background checks with local regulators, but the threat of injunction came as a surprise and represented a "significant escalation" of their concerns.
"We're frankly disappointed and a little baffled that there would be all of this pushback," Mr. Paul said.
If Sidecar has been talking to California regulators, Uber and Lyft likely have been too. Perhaps they have some amazing astroturfing campaign ahead of us, or maybe they realized that a quiet period doesn't just have to be pre-IPO
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