The San Francisco and Los Angeles County district attorneys’ offices on Thursday sent ridesharing service Sidecar a letter that could put the brakes on its carpooling feature.
In a joint investigation, the district attorneys’ offices said Sidecar is in violation of Public Utilities Code 5401 for how it calculates carpool fares for individuals. Though the DA offices told Sidecar to pull the feature, Sidecar CEO Sunil Paul said shared rides will continue operating in San Francisco (Paul said Los Angeles is the next market the company is eyeing). Sidecar is scheduling time to talk with the DA offices.
Update: Lyft said it also received a letter from the district attorneys. “We are confident that we can work with the District Attorneys’ offices to address the items outlined in their letter and look forward to discussing with them soon to do so,” a representative said in a statement.
PUC 5401 states that transportation services must calculate fares based on mileage and time of use. “What they’re claiming is we’re charging a fare, rather than on a time or distance basis,” he told Fast Company. “That is simply not true. It may look that way simply because the prices are so low. What’s going on is we’re using time and distance. It’s not a fixed fare.”
The letter also said Sidecar is making misleading representations about its background checks, leading consumers to believe the process screens out drivers who have ever committed driving violations, sexual assaults, and other criminal offenses. Sidecar said its driver background checks flag for felonies within the last seven years and driving violations in the last three years. “We’re going to take a closer look at how we state these things,” Paul said. “If it’s appropriate we’ll modify the language.”
Fast Company has reached out to the DA office in San Francisco for clarification and to Uber to see if it’s received a similar letter.