Uber Faces $7.3-Million Fine and Suspension in California for Not Sharing Info

Thursday, July 16, 2015

If Uber wants to remain part of the sharing economy in California, an administrative judge for California’s Public Utilities Commission (PUC) recommends it do a little sharing of its own.

Administrative Law Judge Robert M. Mason III recommended that the PUC fine Uber $7.3 million and suspend its license in the state if it didn’t pay up and give the PUC ridership data it uses to assess the performance of transportation companies. Lyft and Sidecar, two similar transportation services, complied with the regulations.

Uber, of course, insists it is just an app on electronic devices used by independent contractors to network and shouldn’t be regulated like a taxi service. It’s not regulated like either. The lightening-fast success of ride-sharing services put the PUC in catch-up mode and the commission crafted a new category for them, Transportation Network Companies (TNCs), with new regulations in September 2013.

The company was required to tell the PUC stuff like how many UberX users sought and received rides (by zip code), how much the rides cost and whether there were any accidents. The PUC wanted a spreadsheet listing the work hours for every driver and a list of who committed any company violations or were suspended. Uber was also supposed to have a driver training program in place, approved by the commission and documented.  

The Uber subsidiary in charge of delivering that information, Raiser-CA, did not provide what the commission wanted. The word “failed” appears 21 times in the judge’s 96-page ruling.

It has not been a smooth ride for Uber since the regulatory framework was approved in 2013. Last month, the California Labor Commissioner ruled in a case (pdf) that Uber owed driver Barbara Ann Berwick of San Francisco $4,152, mostly mileage money and toll costs, because the law says she’s a company employee, not a contractor. Employees get reimbursed for stuff like that.  

Uber is contesting that ruling, which would have a dramatic, and expensive, effect on the company’s business model, and the one announced on Wednesday. A company statement said it had given plenty of information to the PUC, just like it has elsewhere, in the 57 countries it purportedly services, “with no complaints. Going further risks compromising the privacy of individual riders as well as driver-partners.”

Uber can afford the fine. The company has raised $5.9 billion in venture capital from investors and is valued at more than $40 billion. The San Francisco-startup would probably prefer to stay in the California market. 

The company has 30 days to respond before sanctions are levied.

–Ken Broder


To Learn More:

CA Regulator Fines Uber Subsidiary $7.3 Million for Shirking Reporting Rules (by Megan Geuss, Ars Technica)

Uber Should Be Suspended in California and Fined $7.3 Million, Judge Says (by Laura J. Nelson, Andrea Chang and Paresh Dave, Los Angeles Times)

California Orders Uber to Pay $7.3 Million Fine, or Else (by Dara Kerr, C/NET)

Sharing-Economy on Alert: Uber Driver Declared Employee, not a Contractor (by Ken Broder, AllGov California)

Uber Found in Contempt (pdf)

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