Law and Regulations

Ridesharing firms face legal threat from San Francisco, Los Angeles: WSJ

District attorneys of San Francisco and Los Angeles have accused ridesharing service Sidecar of violating California business law and threatened an injunction on its service, the Wall Street Journal reported citing a letter sent to Sidecar and reviewed by the paper.

Read MoreSidecar, Uber, Lyft:Are ridesharing start-ups in a bubble?

Sidecar's rivals in San Francisco, Uber Technologies and Lyft, were also issued similar letters, the WSJ quoted a spokeswoman for the San Francisco district attorney's office as saying.

Jacquelyn Pourroy, a 32-year-old driver for the service Sidecar, began working for the start-up about three months ago. The service lets anyone turn a personal car into a taxi.
Suzanne Kreiter | The Boston Globe | Getty Images

The attorneys have asked Sidecar to end its carpooling feature as it violates a section of the public utilities code, which restricts service providers from charging multiple people for the same ride, the paper reported.

George Gascon and Jackie Lacy, district attorneys of San Francisco and Los Angeles respectively, also accused the ridesharing service of misleading users on how extensively it conducts background checks on its drivers' criminal and driving records, the report said.

Sidecar, Uber and Lyft could not be reached for comment outside regular business hours.

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Ridesharing services like Uber have faced protests from taxi unions worldwide. Last week, a Frankfurt Regional Court granted a reprieve to Uber, setting aside a temporary injunction against the Silicon Valley company from operating a novel car-sharing service across Germany.

In June, taxi drivers across Europe protested against Uber saying it breaks local taxi rules, violates licensing and safety regulations and its drivers fail to comply with local insurance rules.

Ridesharing customers order and pay for a taxi with its application on their smartphones. Instead of having taxis prowl city streets looking for customers, Uber links to smartphone GPS systems to locate app users and have a nearby car go pick them up.

Ridesharing rivalry: Uber vs. Lyft
Ridesharing rivalry: Uber vs. Lyft