Uber is in a tight spot after the company was fined a cool $7.6 million in California by the state's Public Utilities Commission. The punishment is due to Uber's failure to meet data reporting requirements back in the year 2014.
We understand that Uber has agreed to pay the fine, but only because it wants to avoid a 30-day suspension from operating in its home state. After that, the company is expected to appeal the ruling in hopes to overturn the decision against it.
"While we are disappointed by the decision, we look forward to making our case to the California Court of Appeals," said an Uber spokesperson in a prepared statement. "In the meantime, we will pay the fine and continue to work in good faith with the Commission."
Why is driver data even necessary to the Utilities Commission? Well, it is needed for them to know if Uber is serving all manner of passengers in any given neighborhood. Taxis are required to follow these rules as well.
To make matter worse for Uber, the company's main competitor, Lyft, has complied with this regulation and is not attempting to fight it.
Uber is a corporation that is worth over $60 billion, so this $7.6 million fine is relatively small. However, it does underscore the issues Uber faces around the globe when it comes down to competition and regulation. These are problems Uber meets on a regular basis, and we doubt it will come to an end any time soon.
California is slowly becoming an unhappy state for Uber to do its business. In the past, the company faced legal challenges due to the contractor/employee status of its drivers. Furthermore, there's a class action lawsuit in the planning stages that could increase Uber's workforce drastically.
Interestingly enough, Uber is not the only ride-sharing company that is facing problems in California. Almost all of its competitors are in the same boat, and at the moment, it is being considered whether or not Uber and its competitors should be placed under the same regulation as the regular taxi drivers.
Back in June of 2015, a state labor commissioner said that ride-sharing companies should be treated in the same way as taxi drivers. This means that Uber drivers should be viewed as employees and not as contractors. The ruling is not binding, but should it move to become so, drivers could have the power to ask for more pay and benefits to go with the job.
