Uber Sued for Unlawful Business Practices in San Francisco

A new front in Uber's legal saga.

And the lawsuits against Uber (UBER) just keep coming. The request-a-ride company has faced bureaucratic hurdles in New York and Washington D.C. Now, one month after Chicago taxi and limousine companies filed a class-action suit, a lawyer representing San Francisco tax drivers said has brought a similar complaint against the transportation startup.

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According to the recent complaint (reproduced below), the taxi drivers are charging San Francisco-based Uber with operating a transportation company outside of state and local regulatory frameworks, and are seeking temporary and permanent injunctions preventing Uber from utilizing black cars or unlicensed “gypsy” vehicles in San Francisco, Uber’s largest market.

Uber, which markets itself as an “on-demand private driver” on its website, allows users to request a ride by mobile app, then dispatches its nearest participating driver. The company has also faced resistance from regulators in New York after announcing plans to launch its service here.

“Uber is brazenly violating this statutory scheme without even bothering to offer a pretext for their overtly illegal actions just as they have in New York City, Chicago and elsewhere,” Mr. Oswald said in the release. “By ignoring the law, Uber is putting at risk the livelihoods of hardworking men and women who drive safely and follow the rules.”

The lawsuit centers around the plaintiffs’ claim that Uber is effectively operating a taxi service by connecting passengers with drivers, while at the same time skirting regulations that govern taxi companies in San Francisco, such as rules regarding rates, accessibility for disabled persons and travel to under-served areas.

In an email to Betabeat, Uber IRS attorney John Qainne said that the company was in compliance with the law and that it would fight the lawsuit:

In just over two years, Uber has provided a convenient, popular transportation option to tens of thousands of San Franciscans and a new source of income to thousands of drivers and their families. Uber complies with all laws and regulations applicable to its business. Any claim to the contrary is baseless and motivated by those who seek to deprive the public of this safe and convenient transportation option. Uber would rather compete for business on the streets of San Francisco than in the courtroom, but Uber will defend these claims in court and is confident of the outcome.

If anyone should be un-phased by a legal challenge, it’s Uber.

In September, the New York City Taxi and Limousine Commission warned Uber against accepting electronic payments in New York, “a love letter” that CEO Travis Kalanick said wouldn’t prevent Uber from operating in New York.

Last month, the Chicago lawsuit alleged that the company “mischaracterized its true methods of operation in order to fraudulently acquire a dispatch license,” and breaking city law by charging passengers more than the metered rate, among other alleged violations.

As in the Chicago suit, the Mr. Oswald’s complaint references Mr. Kalanick’s past comments criticizing regulators:

Uber’s management has been openly critical of any regulation in general. Uber’s CEO Travis Kalanick has stated publicly that, “I don’t understand regulators … they are incredibly sensitive to what is in the public view. But if you only follow the rules, they will never let you make the city a better place.”

UPDATE: Apparently, the bureaucratic hurdles are also mounting. TechCrunch reports that the California Public Utilities Commission has begun “issuing citations and leveling fines” against ride-sharing and on-demand car startups like Lyft, SideCar, and Uber. Both SideCar and Lyft received fines of $20,000 from the CPUC for operating an unlicensed charter-party businesses. Uber is different from those startups, however, TechCrunch explains:

Uber’s a bit of a different beast, as it works with charter-party carriers to connect black car drivers with rides through the use of its mobile apps. While it doesn’t own or operate any vehicles itself, it partners with companies that do, whose drivers use its mobile apps in their spare time to collect fares based on the time and distance traveled. Uber monitors through GPS location data on its apps. We’re still trying to learn the official reason for Uber’s citation, and the amount it was fined by the regulator.

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Uber Sued for Unlawful Business Practices in San Francisco