TIME Transportation

Virginia Sends Cease-and-Desist Letters to Uber and Lyft

Jeff Chiu—AP A Lyft car crosses Market Street in San Francisco, Jan. 17, 2013.

But Lyft says it’ll keep operating in the state, in defiance of the cease and desist order

Updated at 2:43 p.m.

The Virginia Department of Motor Vehicles issued cease and desist letters Friday to the taxi-alternative services Uber and Lyft, signaling an escalation of the showdown between regulators around the country and the two transportation startups.

“I am once again making clear that Uber must case and desist operating in Virignia until it obtains proper authority,” DMV Commissioner Richard Holcomb said the letter sent to Uber. Holcomb added that Uber drivers themselves face civil penalties if they operate in Virginia.

Uber received its first warning from the Virginia DMV more than six months ago, when it was told it needed to “obtain authority before operating in Virginia,” Holcomb’s letter.

Lyft, which received a nearly identical letter with a warning to its own drivers, told TIME it won’t stop operating in Virginia.

“We’ve reviewed state transportation codes and believe we are following the applicable rules,” Lyft spokesperson Chelsea Wilson told TIME. “We’ll continue normal operations as we work to make policy progress.”

In a statement, Uber called the letter “shocking and unexpected.”

“This decision is not in the best interest of Uber partners, who have been using the technology to make a living, create new jobs and contribute to the economy – or residents who rely on Uber for access to affordable, reliable transportation alternatives,” the company said. “We look forward to continuing to work with the Virginia DMV to find a permanent home for ridesharing in the Commonwealth.”

The letters represent the latest volley in an ongoing faceoff between services like Lyft and Uber, which provide alternatives to traditional taxis. Regulatorssupported by groups that represent traditional taxi drivers—have been trying to impose restrictions on the services. The showdown is in turn part of a larger picture of cities grappling with how to regulate a peer-to-peer sharing economy—which includes companies like the hotel-alternative Airbnb—made possible by the ubiquitous mobile Internet.

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