Late last night, luxury bus startup Leap issued a statement on its Facebook page noting that the company would be temporarily suspending its San Francisco service, citing regulatory issues with the California Public Utilities Commission (CPUC). The commission issued Leap a cease-and-desist letter last week (PDF), saying that Leap Transit did not have a permit to operate in the city.

The company has proved devisive in the Bay Area , where public transportation suffers from a litany of problems, and Leap buses are seen as a way for the wealthy to create a “two-tiered” transportation system . A ride on a Leap bus costs $6 and offers charging ports, free Wi-Fi, and a guaranteed seat. By contrast, a ride on Muni, San Francisco's municipal public transportation system, costs only $2.25 but the buses are unreliable, packed to the gills, and employ not a single on-board bus manager to bring you coconut water.

Leap so far only operates one bus line in the city, which goes from the Marina neighborhood to the Financial District. The company applied for a state permit from the CPUC in 2013, which would have afforded the company “the potential for less oversight and fewer rules,” according to the San Francisco Chronicle. But the city of San Francisco said that it ought to be able to regulate Leap, as SF municipal services would experience the greatest toll from competition from Leap.

Amid the back-and-forth, Leap operated without a permit. During the interim, the CPUC granted Leap an “authority to operate,” which is preliminary to actual permitting. This month, the CPUC said that by driving its buses without a permit, Leap broke the law. According to the San Francisco Examiner the CPUC also said Leap, “failed to provide public liability insurance, evidence of workers’ compensation insurance, evidence of compliance with alcohol and substance testing requirements for drivers, paying tariffs and providing 'letters of acceptance,' all of which are violations of various public utilities codes.”

Last month, a former San Francisco Municipal Transportation engineer filed a complaint with the Department of Justice saying that Leap had illegally removed equipment to help disabled people on its buses, a violation of the Americans with Disabilities Act.

In its Facebook post, Leap wrote that its bus service would be suspended “at least through the end of this week,” as the company works with regulators to become permitted. “While we believe that our service is in full compliance with all state and local laws, we have decided to halt operations until we clear this final hurdle.”

Leap did not respond to Ars' request for comment.