Leap, a private bus startup in San Francisco, has suspended operations "at least through the end of the week" after being issued a cease and desist by the California Public Utilities Commission, according to a company Facebook post published last night. BuzzFeed News has learned that this was due to the company's failure to comply with laws requiring proof of liability insurance, and numerous other state requirements.
According to the statement, Leap believes it has complied with all local and state regulations and was granted unanimous approval from the CPUC in March. But a CPUC spokesperson told BuzzFeed News that is not entirely accurate.
"The CPUC approved a certificate of public convenience and necessity in March for Leap, which may be why some report the commission supports it," Constance Gordon told BuzzFeed News. "Unfortunately ... Leap did not fulfill various legal requirements to do business."
And those requirements are material to operating a transportation service. In addition to failing to file public liability and property damage insurance, Leap did not submit evidence of workers' compensation insurance or evidence that its drivers had fulfilled alcohol and drug testing requirements. Nor did the company request bus and terminal inspections from the California Highway Patrol, another commission requirement.
Leap contends these issues are simply clerical: "We embarked on a fairly complex regulatory process nearly a year ago and we've cleared many hurdles along the way, including the unanimous approval of Leap's operating authority under the California Public Utilities Commission (PUC) in March. However, the finalization of this permitting process has been held up due to various clerical issues and we have now been issued a Cease and Desist notice from the PUC."
Leap, which launched in 2013, offers limited-service luxury bus rides — with Wi-Fi and food and drink for purchase — for $6 a ride in San Francisco. And until the CPUC approved a certificate of public convenience in March, the company has operated in a legal gray area where it does not definitively fall within the judicial purview of either state or local regulators.
BuzzFeed News reached out to Leap for additional comment and had not heard back at the time of publication.