Ride-sharing services have incurred opposition in cities worldwide as companies such as Uber become more popular among travelers. But now Sidecar, Uber and Lyft are facing legal threats in their own territory as regulators challenge the startups in California, their home state and one of their largest markets, the Wall Street Journal reported.
On Thursday, the district attorneys of San Francisco and Los Angeles sent a letter to Sidecar alleging that the ride-sharing service violates state business law, a message that was additionally delivered to rivals Uber and Lyft.
The letter to Sidecar "threatened an injunction on its service following a joint investigation," the Journal reported.
Sidecar has allegedly been misleading customers about company stringency toward background checks and driving records of its drivers, according to George Gascon, the district attorney of San Francisco, and Jackie Lacey, the district attorney in Los Angeles.
The regulators also want Sidecar to end its recently launched car-pooling program, a feature that lets strangers share rides to save on fare. The car-pooling option apparently violates a part of the public-utilities code that forbids transportation providers from charging more than one person for the same ride.
"We're frankly disappointed and a little baffled that there would be all of this pushback," said Sidecar CEO Suni Paul, as quoted by the Journal.
The background checks issue has come up with regulators in the past, but Paul said the injunction threat was a surprise. The chief executive will meet with the district attorneys soon and is open to revamping the requirements for background checks, he told the Journal.
Uber and Lyft declined to comment for the Journal report.