(WXYZ) - Uber and Lyft are on a legal collision course with the City of Detroit.
Uber has been in the Detroit market for more than a year. Lyft also recently moved in.
Both use similar business models where customers request a car and driver with a smart phone app, ride to their destination and it is paid electronically.
7 Action News first reported on Uber in February and whether they have insurance to cover major accidents. On New Years Eve, a Uber driver hit and killed a 6-year-old girl crossing a street in San Francisco. The case is in litigation.
Uber has three levels of service, Uber Black is like a metro car or limo. Uber also has SUVs. Both of those partner with drivers who have state licenses and insurance. Uber X, the cheapest version, is a driver using his or her own car.
The City of Detroit took notice and sent Uber a Cease and Desist letter in February urging them to comply with city ordinances requiring licenses, and background checks.
Michael White the Uber Detroit Manager says Uber is not a transportation company but a technology company that only connects people with cars. That is the same argument used in several other cities.
Detroit's city attorney Melvin Butch Hollowell says he will try to talk with company officials first. If that does not work, he can impose fines and even jail time. Michael White says they are confident in their position on the law.