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Eric Dewhirst suspected he would have difficulties explaining his Internet carpooling business to transportation authorities when a bus company claimed he was breaking provincial rules.

But it wasn't until lawyers at the ensuing hearing began referring to HAL 9000, the evil computer at the centre of Stanley Kubrick's 1968 sci-fi film 2001: A Space Odyssey, that Mr. Dewhirst realized just how deep the disconnect ran.

"It was bizarre to say the least," he said.

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Mr. Dewhirst's company, PickupPal, operates a website that acts as a carpooling matchmaker by helping travellers arrange rides to concerts and sporting events in exchange for cash.

Bus line operators such as Trentway-Wagar Inc. - which launched the formal complaint against PickupPal - argue that Mr. Dewhirst's company is facilitating the operation of an illegal transportation service. Last week the Ontario Highway Transport Board agreed and fined the company more than $11,000 for infractions of the Public Vehicles Act.

The Ontario government has proposed legislation that would legalize these services. But the company is worried it will still be forced to pay the fine and that the legislation will never see the light of day.

The board ruled that by offering rides for cash, the drivers using PickupPal's service aren't carpooling as defined under the act, but are operating illegal taxi services that lack the required licences, insurance and safety certifications.

The current law states that for the purposes of carpooling, riders must travel with the same person each day, trips must be between home and work, drivers can't be paid more than once a week and the trip can't cross municipal boundaries.

"The board certainly did what we expected because the law is pretty clear," said Trentway-Wagar president Jim Devlin. "They were arranging transportation that would fall into the category of a commercial operation."

At one point in the proceedings, Mr. Dewhirst had to explain to the board that an online forum is an Internet site where people can go to discuss a particular topic. In another instance, members of the board were flabbergasted when they suggested a change be made to PickupPal and Mr. Dewhirst offered to make the update on his computer right there in the room.

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Mr. Dewhirst said he has already tweaked PickupPal's terms of use to bring them in line with the law - including warnings for travellers setting up rides in Ontario to abide by the laws of the province - and plans to pay the fine before the due date. However, he remains hopeful the Ontario government will amend the law.

"This change is not something that the bus companies want to have happen," he said. "But until the law passes it can be rewritten ... everything is still up for grabs. We're not out of the woods yet. If it goes through as planned, then we'll go back to what we're doing."

Mr. Devlin said Trentway-Wagar is not opposed to carpooling but simply wants all commercial operations offering public transportation to be treated equally.

PickupPal used to charge a 7-per-cent commission for each ride it helped facilitate, but scrapped that business model in favour of an advertising-supported strategy in June. The company has brokered partnerships with groups such as the Toronto Argonauts and the Dave Matthews Band to help fans carpool to events, with the lure of saving money and reducing their environmental footprint.

Mr. Dewhirst said PickupPal has more than 120,000 members and operates in dozens of markets, none of which place the restrictions on carpooling that Ontario does.

"The government has been blindsided by the technology, and the world has changed around them," he said.

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