San Francisco, L.A. Sue Uber Over Driver Background Checks

Prosecutors in San Francisco and Los Angeles on Tuesday filed a lawsuit against Uber over the ride-service company's background checks and other allegations, adding to the popular startup's worldwide legal challenges.

San Francisco County District Attorney George Gascón, meanwhile, said Uber competitor Lyft agreed to pay $500,000 and change some of its business practices to settle its own lawsuit.

Los Angeles District Attorney Jackie Lacey partnered with Gascón in a probe of the nascent ride-service industry. A third company — Sidecar — is still under investigation and could face a lawsuit of its own if it can't reach an agreement with prosecutors.

Uber faces similar legal issues elsewhere as it tries to expand in cities, states and countries around the world.

The companies use smartphone apps that allow passengers to order rides in privately driven cars instead of taxis. All three are based in San Francisco.

Uber, Lyft and Sidecar earlier were threatened with legal action in San Francisco and Los Angeles over how they screened drivers and charged passengers, along with other business practices. In September, the cities' district attorneys sent letters to the three companies warning they could face legal action if they failed to change the practices.

Following the prosecutors' announcement, Uber issued the following statement:

Californians and California lawmakers all agree--Uber is an integral, safe, and established part of the transportation ecosystem in the Golden State. Uber has met with the District Attorneys to address their concerns regarding airport operations, the uberPOOL product, background checks, and operation of the app. We will continue to engage in discussions with the District Attorneys.