Uber and Lyft car services have said they will continue to operate in Virginia, despite a cease-and-desist letter from the state saying the service is illegal because it hasn't received authorization from the Department of Motor Vehicles.
It comes a day after Colorado became the first state to pass a law regulating such companies, which use smartphone apps to connect passengers with drivers of vehicles for hire and ridesharing services and have seen fast growth in recent years in some parts of the country.
On Friday, Uber Inc. also announced that it had raised $1.2 billion in additional funding from investors, valuing the company at $18.2 billion — among the highest valuations for any venture-capital-backed startup, The Wall Street Journal reports.
The Journal reports:
"The latest funding round was led by three mutual-fund managers: Fidelity Investments, which invested about $425 million; Wellington Management, $209 million; and BlackRock Inc., ... $175 million. Four venture firms also participated, according to a person familiar with the matter: Summit Partners; Kleiner Perkins Caufield & Byers; Google Ventures, and Menlo Ventures.
"In all, Uber has raised more than $1.5 billion since its founding in 2009. The company said it may sell an additional $200 million in shares. But founder and Chief Executive Travis Kalanick said no insiders, such as early employees, will sell shares as part of this round."
After receiving the letter from Virginia, Uber sent an email to all registered customers Friday, saying:
"You may have heard that Uber received a cease and desist letter from the Virginia DMV yesterday. We wanted to write to let you know that Uber will operate as usual, and we plan to continue full-speed ahead with our commitment to providing Virginians access to safe, affordable and reliable rides. We are surprised and disappointed by the DMV's actions, given that Uber has been working with the Virginia government for months to modernize regulations that will put consumer safety first. Virginia should be standing for innovation, consumer choice and job growth."
In a response to the company's email to customers, the National Taxicab Association issued a statement saying Uber had "declared war on the rule of law."
NTA said Uber was "facing lawsuits, cease and desist orders, and warnings over its lax insurance and background checks across the nation" and that the "company's arrogance is staggering."