RelayRides, the startup that runs a peer-to-peer marketplace for individuals to share their autos, has been ordered to shell out a $ 200,000 fine to New York State following an investigation by the state’s Division of Monetary Solutions identified that the firm “put New Yorkers at threat through false marketing, unlicensed insurance coverage exercise, and other violations,” Governor Andrew Cuomo’s office announced right now.
The Department of Monetary Solutions explained the violations thusly:
“RelayRides represented that customers would not be financially liable for accidents or thefts that occurred even though employing the service, which was not accurate. …The business offered insurance coverage and adjusted insurance coverage claims with no becoming licensed by DFS, which is a violation of New York Insurance coverage Law. Furthermore, RelayRides misrepresented to New Yorkers that they would not be liable for out-of-pocket costs in the event that the car is stolen or concerned in an accident. In truth, DFS’s investigation uncovered that people claims had been not accurate and that New Yorkers could be held personally liable for property damage, theft, bodily damage, or death that occurs throughout the rental.”
Along with having to pay the charge, RelayRides has also agreed to no longer carry out enterprise in New York right up until it “submits a organization prepare that DFS determines is no longer inconsistent with New York State Insurance coverage Law.” RelayRides’ operations in New York have been suspended given that May 2013 due to the insurance coverage law investigation.
$ 200,000 may possibly not appear like a huge amount of income for a business that’s raised some $ 18 million in venture capital, but it is a symbolic blow in a bigger battle in between regulators and startups in the so-called “sharing economic climate.” This past weekend, for instance, the Austin Police Division publicly warned South By Southwest attendees towards using transportation solutions this kind of as Uber.