Uber, the app-based transportation network and taxi company has suspended several its drivers and contractors after registering their cars as commercial vehicles. The problem was reported in California and Department of Motor Vehicles in California has already noted the violation but did not level any sanction on Uber.
"How a driver registers his/her vehicle is up to that driver. Uber does not require a driver to register his/her vehicle as personal, and it is not our policy to deactivate a driver for registering his/her vehicle as commercial," Uber told Gizmondo.
According to DMV, Uber's policy clearly violates California law and other rulings by the California Utilities Commission about personal vehicles being used for ride-sharing services. Based on DMV's ruling, any driver who transports people in exchange of monetary gain must register its vehicle as commercial.
Uber services allow its drivers to buy or lease a car through a financial program as long as they register it as a personal vehicle. However, some participating dealerships recommended to their customers that they have to register their car as commercial vehicle in accordance to the law, PCMag reported.
Many critics were quick to point that Uber punishes its drivers and contractors for following correct legal procedures and for not violating the law.
Many speculation surrounds Uber's decision to cut some of its drivers. Some say that Uber wants their drivers to register their cars to be registered as personal car in order to save on Commercial Insurance. It is mandated by law that every commercial corporation is required to provide commercial insurance to its employees. However, Uber overrides this rule by urging their drivers to register their cars as personal rather than commercial cars.
Additional reports also show that Uber drivers pay their insurance out of their own pocket. It is also important to note that Uber's services are tagged as "ridesharing" rather than commercial taxi service.