GEORGE GASCON, SBN 182345 District Attomey of San Francisco JUNE D. CRAVETT, SBN 105094 Assistant Chief District Attorney EVAN H. ACKIRON, SBN 164628 Managing Assistant District NANCY TUNG, SBN 203236 Assistant Distcl Attorney ERNST A. HALPERIN, SBN 175493 Assistant District Attormey GREGORY M. ALKER, SBN 204838 Assistant District Attomey PHOEBE MAFFEI, SBN 271346 Assistant District Attorney No, 732 Brannan Street abel PSE, ‘San Francisco, California 94103 ey Fae Telephone: (415) 551-9545 On ay EO, JACKIE LACEY, SBN 110808 , BERK Or ve 204 District Attorney of the County of Los Angeles ‘Syne Thy STANLEY P. WILLIAMS, SBN 106658 Woe Wee, Co, ‘Head Deputy District Attorney HOON CHUN, SBN 132516 Assistant Head Deputy District Attorney JEFFREY A. MCGRATH, SBN 204838 Deputy District Attorney 201 N. Figueroa Street, Suite 1200 Los Angeles, CA 90012 Attorneys for Plaintiff, The People of the State of California SUPERIOR COURT OF THE STATE OF CALIFORNIA CITY AND COUNTY OF SAN FRANCISCO UNLIMITED JURISDICTION ‘THE PEOPLE OF THE STATE OF Case No. 14 “5 CALIFORNIA, 4314 3 Plaintiff, COMPLAINT FOR PERMANENT INJUNCTION, CIVIL PENALTIES, vs. RESTITUTION AND OTHER EQUITABLE RELIEF LYFT, INC., a Delaware Corporation. Business & Professions Code Sections 17200 et seq. & 17500 et seq. Defendant. COMPLAINT People v. Lyf,,Inc. - 1Plaintiff, the People of the State of California, by George Gascén, District Attomey for the City and County of San Francisco, and Jackie Lacey, District Attomey for the County of Los Angeles (collectively, “Plaintiff"), hereby allege the following upon information and belief: PARTIES AND VENUE 1, The authority of the District Attorneys for the City and County of San Francisco and the County of Los Angeles to bring this action is derived from the statutory law of the State of California, specifically Business and Professions Code sections 17200 et seg. and 17500 et seq. 2. Defendant LYFT, INC. (hereinafter “Defendant” or “Lyft”) is a Delaware ‘Corporation with its headquarters and primary place of business located in the City and County of San Francisco. Lyf states in filings with the California Secretary of State that its principal place of business is located at 548 Market Street #68514, San Francisco, California 94104, 3. Whenever in this complaint reference is made to any act of Lyft, such reference shall be deemed to mean that such corporate defendant did the acts alleged in the complaint through its officers, directors, agent, employees, and/or representatives while they were acting within the actual or ostensible scope of their authority. 4. Defendant at all times mentioned herein has transacted business within the City and County of San Francisco, the County of Los Angeles and throughout the State of California, ‘The violations of law herein described have been committed within and from the City and County of San Francisco, in the County of Los Angeles, and elsewhere within the State of California. 5. The actions of the Defendant, as hereinafter set forth, are in violation of the laws and Public policies of the State of California and are inimical to the rights and interests of the general Public as consumers, competitors and citizens. Unless Plaintiff is granted the remedies sought herein, including injunctive relief by order of this Court, Defendant will continue to engage in the junlawful acts and practices set forth below and will continue to cause injury and harm to the general public. li " COMPLAINT People v. Lyf, Ine. - 2Seda AH ak wK He RSRPeeeerrveee ee ene enn Sah PS ORSRESECRERIFRRES HE oS GENERAL ALLEGATIONS 6. _Lyft provides prearranged transportation services for compensation using an online- enabled smartphone application ("the Lyft App") to connect passengers with drivers. For each passenger trip, Lyft controls the financial transaction between the customer, Lyft, and the driver. A customer hails a Lyft driver through the Lyft App downloaded on the customer's smartphone; Lyft calculates the customer's fare based upon location information from a GPS enabled mobile device; Lyf receives the customer fare by charging the credit card the customer provided to Lyft ‘when registering her personal information on the Lyft App; and then Lyft pays the Lyft driver's [portion of the fare to the driver. The core service being provided by Lyft - passenger ‘transportation for compensation on public roadways - has implications for the safety of Lyft's customers, third parties and public and private property. UNTRUE OR MISLEADING REPRESENTATIONS ABOUT BACKGROUND CHECKS 7. Beginning at an exact date unknown to Plaintiff, but in any event within three years Jof the filing of this complaint, Defendant made untrue or misleading representations regarding the background checks performed on its drivers including, but not limited to, the following: A. _Lyftrepresented that its background check process screens out drivers with any history of violent crimes, sexual offenses, theft, property damage, felonies, or drug related offenses when, in fact, the background check information available to Lyft is limited in duration and Lyft’s process is unable to provide assurance that a Lyft driver has never been convicted of these offenses. B. _Lyft purported to compare the features of its criminal background check process to that performed on taxicab drivers, and represented that Lyft’s process is more stringent, without disclosing that taxicab regulators in California’s most populous cities take measures not taken by Lyf to ensure the integrity of the background check process by requiring the use of a fingerprint- based identification process employing a technology called “Live Sean.” Live Scan fingerprinting, which occurs at a facility designated by the California Department of Justice, allows a biometric search of the California Department of Justice’s criminal history databases and COMPLAINT People v. Lyf, Inc.- 3Cede eR ewe RRRBRRRNRReEe ee eee eee Sa GS SSX8SCREVIFRET SRE S the option to search the Federal Bureau of Investigation’s database of multistate criminal history information. Because of the unique identifying characteristics of fingerprints, the Live Scan/DOJ Process provides assurance that the person whose criminal history has been run is, in fact, the applicant. Lyft’s fingerprint process does not use fingerprints or any other form of biometric identification. 8. _Lyfi’s untrue or misleading representations regarding the background checks [performed on its drivers violate Business and Professions Code section 17500. (COMMERCIAL USE OF THE LYFT APP TO MEASURE TIME AND DISTANCE WITHOUT APPROVAL OF THE CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE 9. Beginning at an exact date unknown to Plaintiff, but in any event within four years of the filing of this complaint, Lyf has used the Lyft App technology to calculate customer fares ‘based upon a measurement of time and distance without having obtained approval from the California Department of Agriculture as required by California law. 10. Before any weighing or measuring device can be sold or used commercially in California, it must first be evaluated and approved by the California Department of Food and Agriculture. This process is known interchangeably as “type certification,” “certification,” or “type evaluation.” The process examines the design, features, operating characteristics, and [performance of devices for compliance with legal requirements. Its purpose is to ensure devices ‘are accurate, reliable, and do not facilitate fraud. 11, California Business and Professions Code section 12500.5 prohibits anyone from using a weighing, measuring or counting instrument or device for commercial purposes in the State of California without first obtaining approval from the Department of Food and Agriculture, ‘The Department’s Division of Measurement Standards (“DMS”), through its type evaluation rogram, reviews and certifies the accuracy of weighing, measuring, and counting instruments or devices that are used for commercial purposes in California, including any software written to interact with, control, connect into, or receive output from, the device. The mission of DMS is to ‘ensure the accuracy of commercial weighing and measuring devices in order to ensure fair COMPLAINT People v. Lyf, Ino, -4ee RRRBRRRRREeE Eee eee ee 8 BESESRSSCSE VARESE SS Jcompetition for industry and accurate value comparison for consumers. 12. The Lyft App technology is a "measuring instrument" within the meaning of (California Business and Professions Code section 12500, subdivision (b). Lyf has violated California Business and Professions Code section 12500.5 each time it has used its non-approved Lyft App technology to calculate a customer fare in California. UNLAWFUL OPERATION AT CALIFORNIA AIRPORTS. 13. Beginning at an exact date unknown to Plaintiff, but in any event within four years of the filing of this complaint, Lyft has operated at airports throughout California in violation of California law. 14, In January of 2013, Lyft signed an agreement with the California Public Utilities ‘Commission (“CPUC”) that allowed it to operate pending the CPUC’s rulemaking proceedings. ‘As a condition of the term sheet, Lyft agreed that it would “[cJomply with all state and local laws, including those of the governing body of any airport.” On September 23, 2013, when the CPUC issued Rulemaking 12-12-01 Decision 13-09-045, the Commission mandated that Transportation Network Companies “shall not conduct any operations on the property of or into any airport unless such operations are authorized by the airport authority involved.” The CPUC incorporated this ‘mandate into the operating permit issued to Lyft on April 9, 2014, which expressly provides that, “This permit does not authorize the Cartier to conduct operations on the property of or into any airport unless such operation is authorized by the airport authority involved.” Lyft continues to be subject to Decision 13-09-045's restriction against unauthorized airport operations 15. In March of 2013, Lyft received a cease-and-desist letter from San Francisco international Airport (“SFO”) informing the company that its drivers who did not have permission 10 operate at SFO were committing trespass. 16. Despite receiving the cease-and-desist letter from SFO, Lyf encouraged its drivers to ‘Commit trespass at California airports by posting on its website that “Lyft drivers can do airport rides,” and suggesting they contact Lyft’s Critical Response Team if they “have any regulatory issues at the airport.” Lyft further encouraged its drivers to trespass by paying for citations issued COMPLAINT People. Lyf, Inc. 5CO YAH AY De RRRBRPRRNSRk GES ee eRe HEE RRB BBs Serr arsoseas to those drivers caught making unauthorized pickups or drop off at California airports. 17. Lyft has operated at Califomnia airports without authorization. Each failure to comply with the terms of Decision 13-09-045 and with the Lyft CPUC Permit is a violation of state law [pursuant to California Public Utilities Code section 5411. Each unauthorized trip to a California airport by a Lyft driver also constitutes a trespass in violation of Penal Code section 602. FIRST CAUSE OF ACTION Business & Professions Code § 17500 ef seg. (Untrue or misleading Statements) 18. Plaintiff, the People of the State of California, restates and incorporates paragraphs 1 through 17, above, as though fully set forth herein, 19, Beginning at an exact date unknown to Plaintiff, but in any event within three years of the filing of this complaint, and continuing to the present, Defendant, with the intent to perform services, or to induce members of the public to enter into obligations relating thereto, made or disseminated or caused to be made or disseminated before the public in the State of California statements concerning such services, or matters of fact connected with the performance thereof, /which were untrue or misleading, and which Defendant knew or reasonably should have known |were untrue or misleading, in violation of Business and Professions Code section 17500 et seq. Such statements include but are not limited to the representations set forth in paragraph 7, above. SECOND CAUSE OF ACTION Business & Professions Code § 17200 et seg. (Unfair Competition and Unlawful Business Practices) 20. Plaintiff, the People of the State of California, restates and incorporates paragraphs 1 through 19, above, as though fully set forth herein. 21. Beginning at an exact date unknown to Plaintiff, but in any event within four years of the filing of this complaint, and continuing to the present, Defendant engaged and continues to lengage in acts of unfair competition and in unfair, deceptive or unlawful business practices within the meaning of Business and Professions Code section 17200, et seq., including but not limited to COMPLAINT People v. Lyf, Inc. -6Seemann aee nn Rp RRR Ree ee eee ee SRkREBBREREBSSESRREBERE the following: ‘A. Defendant made untrue or misleading statements in violation of Business and Professions Code section 17500, as set forth in paragraph 7, above, and in the First Cause of Action, B. Defendant undertook the following unfair methods of competition or unfair or deceptive acts or practices in transactions intended to result or which did result in the sale of services to consumers, in violation of Civil Code section 1770(a) (1) Defendant, by use of the untrue or misleading statements set forth in paragraph 7, above, represented that its services have characteristics or benefits which they do not /have, in violation of Civil Code section 1770(a)(5); 2) Defendant, by use of the untrue or misleading statements set forth in [paragraphs 7, above, represented that its services are of a particular standard or quality when they are of another, in violation of Civil Code section 1770(a)(7); and (3) Defendant, by use of the untrue or misleading statements set forth in paragraph 7, above, disparaged the services or business of another by false or misleading representation of fact, in violation of Civil Code section 1770(a)(8). 22. Defendant used the Lyft App technology for commercial purposes to measure time and distance in calculating fares for its customers without first having obtained approval of the Lyft App technology from the California Department of Food and Agriculture, in violation of Business and Professions Code section 12500.5. 23. Defendant allowed Lyft drivers to pick up and drop off passengers at airports in California without the permission of the airport authorities, in violation of California Public Utilities Commission Decision 13-09-045, in violation of the terms of the operating permit issued to Lyft by the Commission, and in violation of California Public Utilities Code section 5411, 24. Defendant encouraged, aided and abetted Lyft drivers to commit trespass at California airports in violation of California Penal Code sections 32 and 602. u COMPLAINT People v. Lyft, Inc. -7Ce Ya aH eww 10 lL 12 13 14 15 16 7 18 19 20 21 22 23 24 25 26 27 PRAYER FOR RELIEF i. WHEREFORE, Plaintiff prays for judgment as follows: 2. That pursuant to Business and Professions Code sections 17203 and 17535, and the Court's inherent equity powers, Defendant, its subsidiaries; their successors and the assigns ofall or substantially all the assets of their businesses; their directors, officers, employees, agents, independent contractors, partners, associates and representatives of each of them; and all persons, ‘corporations and other entities acting in concert or in participation with Defendant, be permanently restrained and enjoined from: ‘A. Making, disseminating, or causing to be made or disseminated, any misleading, untrue and/or deceptive statements in violation of section 17500 of the Business and Professions Code, including, but not limited to, the untrue or misleading statements alleged in the First Cause of Action of this complaint; and B. Engaging in any acts of unfair competition, in violation of section 17200 of the ‘Business and Professions Code, including but not limited to the unlawful business acts and practices alleged in the Second Cause of Action of this complaint. 3. That pursuant to Business and Professions Code section 17536, Defendant be ordered 10 pay a civil penalty of Two Thousand Five Hundred Dollars (2,500.00) for each violation of Business and Professions Code section 17500, according to proof. 4. That pursuant to Business and Professions Code section 17206, Defendant be ordered 10 pay a civil penalty of Two Thousand Five Hundred Dollars ($2,500.00) for each violation of /Business and Professions Code section 17200, according to proof. 5. That Plaintiff be awarded its costs of suit. 6. That Plaintiff be given such other and further relief as the nature of this case may require and this Court deems proper to fully and successfully dissipate the effect of the unlaw fal “ W 1 COMPLAINT People v. Lyf, Inc. - 8Camraneaun 10 rot 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 business practices and untrue or misleading representations contained herein. DATED: December ¥, 2014 GEORGE GASCON District At ,, City and County of San Francisco DATED: December 8, 2014 JACKIE LACEY District Attorney, County of Los Angeles BY: STANIGY P. WILLIAMS: Head Deputy District Attomey COMPLAINT People v. Lyf, Inc. -9