PUC fines 3 app-hailing taxi startups

Uber CEO Travis Kalanick shows the application they use to give exact location and connect a customer and a driver in San Francisco, Calif. on May 1, 2012. Uber CEO Travis Kalanick shows the application they use to give exact location and connect a customer and a driver in San Francisco, Calif. on May 1, 2012. Photo: Siana Hristova, The Chronicle Photo: Siana Hristova, The Chronicle Image 1 of / 4 Caption Close PUC fines 3 app-hailing taxi startups 1 / 4 Back to Gallery

The state Public Utilities Commission on Wednesday fined Uber, Lyft and SideCar $20,000 each for illegally operating their high-tech taxi and limousine hailing services without the required permits.

The fines come as Uber also responded to a class-action suit that claims the service is unfairly taking away fares from San Francisco taxi drivers.

The commission said the San Francisco companies, which use smartphone apps to arrange rides, have 20 days to pay the fines or file an appeal.

The companies have been operating without getting the commission's approval, which would ensure that they have insurance to cover accidents and that employees and drivers are protected, Jack Hagan, the commission's director of consumer protection and safety, said in a statement.

"This is a matter of public safety," Hagan said.

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Uber CEO Travis Kalanick said his company does comply with the state's requirements.

"We will continue to work with the PUC and educate them on our innovative and legal technology platform so that we can ensure that innovative transportation options can flourish here in California," he said in an e-mail.

The suit against Uber, filed on behalf of two veteran drivers for Luxor Cabs, says Uber is "creating unfair business competition" by violating the strict state and city regulations that govern taxis and limousines.

The lawsuit was filed in San Francisco Superior Court two weeks after Uber steered itself into the path of cab companies by expanding its service with an option to hail the nearest participating taxi with its smartphone app. Uber has also been sued by cab companies in Chicago.

In a statement, Uber attorney John B. Quinn called the latest lawsuit "baseless."

"In just over two years, Uber has provided a convenient, popular transportation option to tens of thousands of San Franciscans and a new source of income to thousands of drivers and their families," the statement said.

"Uber complies with all laws and regulations applicable to its business. Any claim to the contrary is baseless and motivated by those who seek to deprive the public of this safe and convenient transportation option. Uber would rather compete for business on the streets of San Francisco than in the courtroom, but Uber will defend these claims in court and is confident of the outcome."

Launched in 2009, Uber started with an app that lets users summon a commercial "black car" service sedan, limousine or SUV, with fares set by distance or destination. The fares, tip and booking fee are charged to the user's credit card.

But Uber has been expanding its service in select cities to include the controversial option to use the app to hail the nearest cab driven by a participating cabdriver. State and city regulators have been looking into the service, but Uber's position is that the company operates legally because it works with drivers who already have the proper licenses to carry commercial passengers.

The lawsuit, filed on behalf of Leonid Goncharov and Mohammed Eddine, two drivers for Luxor Cabs, claims Uber is illegally skirting detailed taxi regulations set by the California Public Utilities Commission and the San Francisco Municipal Transportation Agency.

The suit, filed Friday by Corte Madera attorney Gary Oswald, claims that Uber has partnered with unauthorized "gypsy" drivers.

"Uber attempts to spin any criticism as 'anti-technology' and is willing to say whatever it needs to at any given moment to achieve Uber's economic goals," the suit said. "Simply stated, Uber's 'partner' drivers, who are operating without restriction, are taking passengers, and thus income, away from legally sanctioned taxicab drivers who are literally playing by the rules."