Safety and liability concerns in the share economy arose again this week as ride sharing startups Sidecar and Lyft as well as private car service Uber were all hit with $20,000 fines from the California Public Utilities Commission (CPUC).
In a statement, the director of the CPUC’s Consumer Protection and Safety Division said, “If something happens to a passenger while in transport with Lyft, SideCar, or Uber, it is the responsibility of the CPUC to have done everything in its power to ensure that the company was operating safely according to state law.”
At issue are the qualifications of drivers in these networks as well as evidence of property damage insurance. Share economy companies like Airbnb and RelayRides that are attempting to disrupt existing sectors are facing the double whammy of government regulation and potential lawsuits from the industries they’re disrupting. Uber is already facing a class action lawsuit from San Francisco taxi drivers.
I’m still cautiously optimistic that if some of these companies can hit critical mass, it’ll get harder to shut them down. That’s certainly what I think is going to happen with Airbnb. But let’s just say that hefty legal fees will need to be built into these business models. And the startups that can last and find a strong customer base to support the company with legislators are best positioned to survive.