Stop, state tells Newport company hoping to challenge Uber and Lyft

A California regulatory agency is trying to stop a fledgling Newport Beach company’s efforts to take on ride-hailing giants Uber and Lyft.

Last week, Michael Pappas, co-founder of RydenGo, was told by a transportation enforcement officer with the California Public Utilities Commission to cease all company operations.

But for Pappas, the letter, which threatened criminal prosecution, didn’t make sense. RydenGo hasn’t started operating. It doesn’t have cars on the streets or even drivers. Its app isn’t available.

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“It’s like suffocating a baby before it has had a chance to walk,” Pappas said in an interview.

The PUC letter, dated April 13, said RydenGo doesn’t have a state permit for passenger charter operations. The letter ordered the company to cease operations and “any unlawful advertising and unfair business practices.”

Terrie Prosper, a PUC spokeswoman, said, “It is a violation of our rules for a company to advertise, on its website or in other ways, as providing service that they are not authorized to provide.”

Pappas said RydenGo doesn’t consider its website, RydenGo.com, to be advertising in the traditional sense. He called it promoting a cause to investors and the transportation industry.

Pappas said a PUC officer verbally told him to take his website down, but he refused, arguing that would violate his First Amendment rights.

“That’s government overreach,” Pappas said.

RydenGo’s business model relies on drivers setting their own prices for services and letting consumers pick. Unlike its competitors, it would not take commissions, relying instead on a subscription fee paid by drivers to use RydenGo’s system.

RydenGo isn’t sure what its next step will be.

Pappas said interest in his company is high throughout the world. Within 30 hours of the Daily Pilot publishing an article about RydenGo last month, the company received about 900 inquiries, he said.

“It was quite amazing,” he said. “I knew then this was reverberating.”

bradley.zint@latimes.com

Twitter: @BradleyZint

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