California Taxis Sue Uber, Allege False Advertising, Unfair Competition

LOS ANGELES (Los Angeles Times/TNS) -

Taxi drivers in California must submit to fingerprinting for criminal background checks. UberX drivers don’t have to. Yet Uber Technologies advertises itself as “the safest rides on the road,” and executives tout Uber as “safer than a taxi.”

That’s deceptive advertising and has caused “significant harm” to the taxi industry, 19 cab companies in California claimed Wednesday in a lawsuit filed in federal court. The companies allege that Uber’s false claims hurt the profits and reputations of the taxi business, and are seeking an injunction against what they call false claims, and unspecified damages.

The companies have suffered both financial and reputational harm to their businesses, according to the lawsuit.

“Plaintiffs’ taxi cabs vie for the same customers as Uber cars, and — as a result — compete for the same dollars,” reads the complaint, filed in U.S. District Court in San Francisco. Potential customers, the suit says, “mistakenly believe that they will get a safer ride by hiring an UberX ride — spurn plaintiff’s taxi cabs for UberX rides, resulting in lost revenue for plaintiffs.”

The plaintiffs also take issue with Uber charging “Safe Rides Fee,” an additional dollar tacked onto each ride that Uber says goes toward driver background checks and safety features. The complaint alleges that the fee has “the tendency to deceive” customers into thinking that by paying the fee, they are “receiving the safest ride possible.”

Uber has not yet commented on the lawsuit.

Contrary to Uber’s claims, the suit says, taxis are more rigorous about safety than Uber, and for Uber to publicly say otherwise violates federal and state laws that prohibit false advertising.

Uber’s third-party background checks, plaintiffs say, don’t require fingerprinting and thus are less rigorous than the electronic fingerprinting of taxi drivers and subsequent background checks required by California law.

Those prints are run through a Department of Justice criminal database. The process is superior to Uber’s background checks, the suit says, because “fingerprinting helps uncover criminal history not discovered through traditional methods, offers extra protection to aid in meeting industry guidelines and helps prevent fraud.”

The complaint also points out that taxi drivers must undergo a written exam and take driver safety training courses, while Uber requires no driver training or written exams.

The suit says taxis undergo regular vehicle inspections more thorough than what Uber requires. And the plaintiffs allege that because many Uber drivers also drive for ridesharing competitor Lyft, their drivers are frequently distracted as they toggle between mobile apps while on the road.

“The case is really about the continued perpetuation by Uber of the myth that it offers the safest ride on the road,” said plaintiffs’ attorney Bruce Simon of Pearson, Simon & Warshaw in San Francisco. The plaintiffs are also represented by the Dolan Law Firm in San Francisco, which has filed a separate suit against Uber in a case in which an Uber driver ran over and killed a 6-year-old girl on Dec. 31.