California is toughening its stance on the sharing economy. Particularly, on Uber and similar transport companies.
Last week only, the California Public Utilities Commission (CPUC) slammed Uber with a fine of 7.3 million dollars and the looming suspension of Uber’s services. The booting comes on grounds of Uber not providing sufficiently detailed reports on its activity.
According to Constance Gordon, spokesperson for the CPUC, Uber had failed time and again to provide the necessary information regarding:
“efforts to date in accommodating visually impaired, persons with service animals, and persons requiring a wheelchair accessible vehicle”.
Particularly, Rasier-CA is under fire in the decision took by CPUC judge Karen V. Clopton. Rasier-CA is running the budgeting service of Uber.
Thus, a 7.3 million dollars are the fine for not complying with state regulations regarding transport. Uber however disagrees with the ruling. Sharing the kind of information that the CPUC is demanding would infringe on Uber’s customers’ privacy the company said.
Not only that, but:
“CPUC requests are also beyond the authority of the Commission and will not improve public safety”.
Establishing an economical model that it based on sharing, Uber has hit a few sensitive chords. Particularly with the established taxi industry, Uber is perceived as a snatch. Yet, the growing numbers that place Uber on the first position when it comes to growth in the Silicon Valley should be sufficient reason to differ.
As the decision of the CPUC envisions either paying the 7.3 million dollars fine or being booted out of California, Uber plans to appeal within 30 days.
An email text from Uber, reported by the CNN, stated:
“This ruling-and the associated fine-are deeply disappointing. Going further risks compromising the privacy of individual riders as well as driver-partners”.
The statement clearly goes against what the CPUC had planned: letting Uber continue its activity in California if the company succumbs to state regulations and reports all aspects of the activity as requested by the Commission.
The attack on Uber is seen as another attempt to strangle the sharing economy boom and transport innovation. The CPUC and other California administrative instances are not at the first attempt of this kind.
Just in 2013, California’s Labor Commission decided that Uber, as well as Lyft carry commercial insurances of 1 million dollars per incident coverage. The limit goes beyond commercial insurance policies set for limousines for instance.
In 2014, it was decided that the drivers are subject to primary liability insurances of 50,000 dollars, spiking up to personal and death liability insurances of 100,000 dollars and only 30,000 dollars for property damage.
No other driver in California, except those from ride-booking companies faces such draconic regulations.
Uber will appeal the CPUC decision. The result of the appeal could have great impact on the sharing economy business model.
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