Why Uber could be banned in California

A judge has recommended that Uber be banned from its own backyard. 

Chief administrative law judge Karen V. Clopton of the California Public Utilities Commission (CPUC) declared Wednesday that the ride-sharing service should be fined $7.3 million and suspended from its home state of California for failing to provide the CPUC with data required by the 2013 state law that legalized ride-hailing firms. 

Clopton wrote that Uber violated state regulations by refusing to submit information critical to ensuring that drivers are treating all customers fairly and equally, including the number of rides given to people with service animals or wheelchairs and the number of rides requested and accepted within each ZIP code, which can show regulators if drivers are trying to avoid specific neighborhoods. 

The San Francisco-based company also failed to provide sufficient data on drivers who had been suspended or committed a violation and the causes of traffic accidents involving Uber drivers, the agency says.

Uber “had a year to comply with these regulations, and didn’t do it,” said a spokeswoman for the CPUC, which regulates companies like Uber, Lyft and Sidecar. Uber is reportedly the only company that failed to provide sufficient data. 

Marilyn Golden, senior policy analyst at the Disability Rights Education & Defense Fund in Berkeley, told the Los Angeles Times that the punishment is well-deserved. 

“This industry has done everything it can to avoid, dismiss and coerce themselves out of regulation, and this decision is welcome from that standpoint,” she said. “They've been scofflaws. They take every advantage and avoid every requirement.”

Uber has 30 days to pay the $7.3 million fine and provide the CPUC with sufficient data or else the agency will suspend the company's UberX service, the International Buinsess Times reports. The company plans to appeal the decision, a process that could take several months. 

“We will appeal the decision as Uber has already provided substantial amounts of data to the California Public Utilities Commission, information we have provided elsewhere with no complaints,” said an Uber spokeswoman in a written statement. “Going further risks compromising the privacy of individual riders as well as driver-partners.”

This is the second blow to the ride-sharing company delivered by the Golden State this summer. In June, the California Labor Commissioner’s Office ruled that an Uber driver is an employee rather than an independent contractor, a decision that could have significant financial ramifications for Uber and other sharing economy startups. Uber is also appealing that ruling. 

Juan Matute, associate director of the UCLA Lewis Center and the Institute of Transportation Studies, says he expects Uber will pay the $7.3 million fine and comply quickly with the ruling despite the company’s stated plans to appeal. 

“Especially in California, I think Uber wants to be seen as a team player because of the recent labor board decision and how that could affect their business,” Mr. Matute told the Los Angeles Times. “This would seem like a small consolation to improve their chance of success with other regulatory issues that could have a bigger impact on them.”

“It's not a market they would want to jeopardize their existence in over not handing over some spreadsheets,” he added. 

[Editor's note: An earlier version of this story misstated the name of the California Labor Commissioner’s Office.]