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San Francisco parking apps facing legal battle

Several start-ups that aim to make parking easier in the San Francisco area have faced legal issues, with one company being sent a cease-and-desist order.

MonkeyParking is a Rome-based developer that operates in San Francisco. The company's app allows users to post information about the parking space that they are about to leave and other drivers can then pay for this information.

Read more: Taxi driver protest against Uber causes mayhem on London's roads

San Francisco city attorney, Denis Herrera has ruled that this business is illegal, citing the San Francisco Police Code. "It shall be unlawful for any person, firm or corporation to enter into a lease, rental agreement or contract of any kind, written or oral, with or without compensation, for the use of any street or sidewalk."

Drivers could be fined $300 per transaction if they continue to use the app and MonkeyParking could face a penalty of $2,500 for each violation if it does not cease operations by 11 July. Chief executive of the company, Paolo Dobrowolny said in an email to Venture Capital Dispatch that he could not talk directly about the case, but that he was in discussions with his legal team.

"As a general principle we believe that a new company providing value to people should be regulated and not banned," he said. "This applies also to companies like Airbnb, Uber and Lyft that are continuously facing difficulties while delivering something that makes users happy. Regulation is fundamental in driving innovation, while banning is just stopping it."

Read more: New smart parking app launches in London

The City Attorney's Office of San Francisco has also requested for MonkeyParking to be removed from Apple's App Store and there are fears that start-ups offering a comparable service such as Sweetch Inc and Parkmodo will face similar issues.

The latest problem comes after there were widespread protests across Europe regarding the legality of the taxi service app Uber and difficulties have also arisen with home rental site AirBnB as existing regulations and new technologies continue to clash.