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Los Angeles deals setback to Uber, other ride-sharing apps with cease and desist order

Los Angeles deals setback to Uber, other ride-sharing apps with cease and desist order

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For every step of progress made by the ride-sharing industry in metropolitan havens like New York City, companies like Uber, Lyft, and SideCar continue to meet stiff resistance elsewhere. Take the city of Los Angeles for example, which just sided with traditional taxi operators by delivering sharply worded cease and desist letters to all three startups. The orders — signed by LA taxicab administrator Thomas M. Drischler — warn each company that their respective business is "operating an unlicensed commercial transportation service" within city limits. Uber, Lyft, and SideCar are each ordered to suspend all passenger pickups and any dispatches requested through their associated smartphone apps until they can obtain the requisite permits from California's Public Utilities Commission (CPUC).

Another victory for the taxi industry

Aside from the ride-sharing companies themselves, the stern warning also extends to drivers. "We suggest that you inform all Uber drivers operating in Los Angeles that they are subject to misdemeanor arrest and the impoundment of their vehicles for up to 30 days," reads the letter addressed to Uber's Travis Kalanick. (Similar wording appears in the other documents.)

Each service allows consumers to circumvent the usual methods of hailing a cab or black car by simply arranging pickup through a mobile app. Critics of ride-sharing have routinely based their arguments around public safety concerns and worry over riders potentially being overcharged. In Washington, DC, the FTC recently made its stance known, warning that overreaching transportation regulations could risk stifling innovation in the space. Even as Uber plots out an ambitious international expansion, it's still very much entrenched in a battle here at home.

Thanks, Vallsurf!

Update: Uber has gotten in touch to highlight that the California Public Utilities Commission has already granted the company permission to operate throughout the entire state. Further, Uber contends that Los Angeles Municipal Code Sec. 71.00 — which the LA Department of Transportion cites in its cease and desist letter — clearly grants the state PUC jurisdiction when it comes to regulating Uber and its drivers.

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