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uberxAuthorities in California aren’t happy with the way new transportation startups like Uber are conducting business — and now they’re threatening legal action if changes don’t happen.

District attorneys in San Francisco and Los Angeles penned a letter to Uber, Lyft, and Sidecar this week, accusing the companies of violating state law.

The complaints center on two aspects: Background checks and a new carpooling feature that all three companies are rolling out.

The district attorneys contend that the San Francisco-based startups are misleading customers because they do not complete thorough background checks that properly screen out drivers who “have ever committed driving violations, DUI, sexual assault and other criminal offenses.”

Sidecar's Shared Rides feature.
Sidecar’s Shared Rides feature.

The other complaint relates to UberPool, Lyft Line, and Sidecar’s Shared Rides — carpooling features each service has begun offering that allow users to share rides with others who are going on similar routes, which enables them to save money on fares.

The letter to Sidecar, which you can see below, notes that calculating Sidecar’s Shared Rides service fares on “an individual-fare basis” violates Public Utilities Code section 5401. Earlier this month, the California Public Utilities also sent a warning letter to the companies that noted how these services are illegal.

The companies have been asked to remove their background check statements and disable the carpooling feature from their apps. If they fail to respond by Oct. 8, the district attorneys are prepared to file legal action.

“Each of these measures can be implemented quickly, easily and without impacting Sidecar’s ability to continue operating,” the letter notes.

In a statement, Sidecar said it strongly disagrees with the assertions about its Shared Rides, which the company says are “safe and affordable, cut down on traffic congestion and reduce pollution.”

“The District Attorneys are trying to enforce laws written for limousines, in an era before smartphones,” the company said. “Sidecar will continue to operate and expand Shared Rides.”

Sidecar provided us with the letter sent to its CEO Sunil Paul, who has since started a petition to “save Shared Rides.” You can see a copy of the letter below.

The Wall Street Journal notes that similar letters were sent to Uber and Lyft. We’ve reached out to both companies and will update if we hear back.

Update, 12 p.m. — Here’s Uber’s statement:

“Ridesharing is unequivocally supported by the California legislature, the CPUC, the Governor, local jurisdictions across the state and millions of Californians.  The DAs have made numerous inaccurate assertions that we will correct and discuss with them.”

And here’s Lyft’s statement:

“Ridesharing has been enthusiastically embraced by California residents and we have worked closely with the California Public Utilities Commission over the past two years to secure a future for this innovative option throughout the state. 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.”

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