The Uber Struggle
HandelontheLaw.com Staff Writer
Uber Technologies, Inc., a multi-billion dollar international transportation network company, is increasingly mentioned in 2015 news, as the organization struggles with other transportation companies and local governments.
Uber was founded in 2009 as UberCab by Travis Kalanic and Garrett Camp. Headquartered in San Francisco, the organization provides and runs a mobile app allowing a smartphone user to submit a trip request that is transmitted to a driver who uses his/her own car to transport the user, and then bills the user’s credit card for the trip.
Starting small in a single city, Uber has expanded to 300+ cities in 58 countries and boasts an estimated worth of $50 billion. Clearly, the basic idea is a good one that has gained the financial backing of high end investors like Google and Goldman Sachs. However, the company’s effects on local transportation and local government have caused multiple scuffles for Uber.
Uber’s critics, chiefly other transportation companies and local governments, have several complaints against the company. They claim Uber:
- engages in unfair competition because it does not pay taxes or licensing fees imposed on taxi companies;
- endangers the public, passengers and pedestrians alike, because its drivers are not trained, licensed or insured;
- ignores and breaks local laws by introducing relatively unregulated Uber drivers into local areas that highly regulate the taxi industry; and
- engages in aggressive, dirty campaigns against journalists, transportation companies and local government leaders who stand in Uber’s way.
Some of Uber’s notable recent tussles involve New York City government and California taxi companies. New York City government, led by Mayor Bill de Blasio, considered a plan to cap the number of Uber vehicles operating in NYC. In response, Uber engaged in a multi-million dollar campaign criticizing de Blasio and warning of longer wait times for rides if his plan was approved. In that case, the City and Uber struck a July 2015 deal in which:
- the Mayor agreed to table his plan at least during a 4-month study of Uber’s and other for-hire vehicle companies’ impact on City traffic; and
- Uber agreed to provide requested data for the study.
The California struggle involves 19 taxi companies who are suing Uber in federal court for false advertising. According to the suit, (L.A. Taxi Cooperative Inc. v. Uber Technologies Inc., 15-cv-01257, U.S. District Court, Northern District of California (San Francisco), Uber falsely claims in ads and online posts that its background checks are the most thorough, its services are the safest in the business, and conventional taxis are less safe. In reality, according to the Plaintiffs, the opposite is true: the taxi companies use fingerprint checks and criminal background checks that Uber does not use, and the taxi companies require written exams and driver safety courses. Uber moved to dismiss the case but the presiding federal judge allowed most of the case to proceed. Both sides praised the decision as a “plus” for their interests.
By Kathy Catanzarite
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