It’s no secret that Uber’s disruptive on-demand car and taxi service is ruffling the feathers of the taxi industry. It seems that in every city in which Uber launches, there’s legal pushback from the industry that the startup is disrupting. We’ve seen this in D.C., San Francisco, New York and Boston. Today, Chicago joins the mix, with a new lawsuit filed by a group of taxi and livery companies in Chicago.
For background, in April, Uber expanded beyond just offering black cars in Chicago to including Taxis on its app. Via the app, riders can see which taxi cabs are close to them on the map of the Chicago area. Similar to the way you order a black car via Uber, you simply choose the taxi and waiting time that works for you, set your exact location and then you’ll receive a message when the taxi driver has arrived at the location. At the time, Uber was recruiting taxis directly on a driver-by-driver basis.
According to a release issued by the parties, Uber is being accused violating multiple Chicago and Illinois laws designed at protecting public safety, consumer protection and fair practices. The complaint also alleges that Uber is using deceptive business methods to confuse its customers.
The complaint charges that Uber is not inspecting taxi vehicles to make sure they comply with city and state regulations and does not ask potential taxi drivers if they are properly insured. The lawsuit also alleges that Uber claims it works with “fleet partners” when Uber actually works directly with drivers in its taxi service. The taxi and livery companies says that Uber is deliberately trying to confuse customers and “cash in on the taxi companies’ good name, trademarks and reputation.”
To be honest, Uber has always been open that they work with drivers, not the companies, so I’m not sure where the misrepresentation is taking place. Even within Uber’s app, the car service startup doesn’t specify which Taxi company each available taxi is hailing from.
Other claims in the lawsuit include that Uber charges a “20% gratuity” for all taxi rides, but only half of the “gratuity” goes to the driver, which the taxi companies say violate city ordinances by charging more than the statutory set rates displayed on the taxi meter. We’re told by Uber; however, that riders do pay 20% gratuity but this passes through to the driver. In turn, drivers pay Uber a service fee per ride for bringing the driver the additional business, which seems fair.
Additionally, the lawsuit contends that in Chicago, Uber mischaracterized its methods of operation in order to acquire a dispatch license and failed to disclose on its dispatch license application that it has no agreement with any taxi affiliations as required by Chicago ordinance.
Also, Chicago taxi drivers are prohibited by city and state law from using cellular telephones or other electronic devices, whether or not hands-free, while operating a cab and Uber requires drivers to use an iPhone and then call the customer using a cell phone to arrange the pickup.
It’s hard to tell how much weight these claims hold without knowing the intricacies of Chicago’s city and state laws regarding taxis. But as we’ve seen with the response from taxi companies and commissions in other cities, Uber is facing a battle because the company is disrupting an age-old sector. Taxi companies are seeing how competitive Uber is becoming in each city, and bringing out the knives to fight.
Uber drivers have filed a class action lawsuit claiming they have been misclassified as independent contractors and are entitled to be reimbursed for their expenses that Uber should have to pay, like for gas and vehicle maintenance. The lawsuit also challenges Uber’s practice of telling passengers that the gratuity is included and not to tip the drivers, even though you are not getting a tip!!
On December 5, 2013, the federal court issued a significant ruling denying Uber’s motion to dismiss this case. The ruling is a big victory for Uber drivers! It endorsed the plaintiffs’ legal theories and says that the drivers can pursue their claims for tips, as well as for misclassification and expense reimbursement, under California law.
In a later decision, issued September 4, 2014, the court narrowed the legal theories that the plaintiffs can pursue, but the statutory misclassification and tips claims are going forward.
In the first decision, the court agreed with our argument that California law would apply to drivers outside California so that this case may cover drivers nationwide. However, in the more recent decision, the judge changed his mind and ruled that the case could only cover drivers in California. We are seeking to appeal that decision.
The case is now in discovery, and the court will be hearing summary judgment argument later this year.
Last year, Uber began including an “arbitration clause” in its contracts with drivers in order to prevent them from being part of a class action case. The court has not yet ruled on whether this clause is enforceable. The court agreed with the plaintiffs’ argument that the arbitration clause could undermine drivers’ ability to participate in this class action and ordered that Uber provide “corrective notice” about the arbitration clause. Under the court’s order, new drivers were given another opportunity to “opt out” of the arbitration clause. Also, when new drivers start driving for Uber, they have 30 days from the date they agree to the licensing agreement to “opt out” of the arbitration clause.
Because the 30 days have now passed since Uber sent out the revised agreement with the arbitration clause, we are no longer submitting opt out forms to Uber, except for drivers who have recently started driving for Uber and are still within the 30 days of having agreed to Uber’s licensing agreement. But if you are interested in this case and want to stay informed about what is happening, please fill out and send us this form, or e-mail your name and contact information to pacevedo@llrlaw.com.
If you have any questions, feel free to call the lawyer representing Uber drivers, Shannon Liss-Riordan, or her paralegal assistants Elizabeth Lopez and Phil Acevedo or associate attorneys Ben Weber and Adelaide Pagano. They can be reached at (617) 994-5800, or by e-mail atelopez@llrlaw.com and pacevedo@llrlaw.com. Attorney Liss-Riordan has represented thousands of tipped employees, and employees who have been misclassified as independent contractors, all around the country. See her firm’s website for more information:www.llrlaw.com.
Click here to read a copy of the lawsuit complaint.
Click here to read the court’s order denying Uber’s motion to dismiss.
Click here to read the court’s order issued September 4, 2014.
If you have agreed to Uber’s licensing agreement within the last 30 days, please fill out this form and return it to us as soon as possible in order to opt out of Uber’s arbitration agreement. You can also opt out by sending an e-mail to Uber at optout@uber.com and saying that you want to opt out of the arbitration agreement.
Portland sued Uber on Monday to stop the fast-growing ride-hailing service from operating in the Oregon city until it follows local regulations.
Uber operates in areas around Portland, but only started up in the city itself on Friday, without consent from authorities or any agreement over how it should be regulated.
“The city’s lawsuit is asking for a declaration by the court that Uber is subject to the city’s regulations,” the city said in a statement. “The lawsuit also asks the court to order Uber to stop operating in Portland until it is in compliance with the city’s safety, health and consumer protection rules.”
Local media reported that the service has been available in Portland for the past few days.
“Uber has received a tremendously warm welcome from riders and drivers in and around Portland. We appreciate the way residents have welcomed Uber into the Rose City, their support illustrates why it’s time to modernize Portland transportation regulation,” said Uber spokeswoman Eva Behrend.
The online ride service was valued at $40 billion last week after its latest funding round ahead of an expected initial public offering.
However, it has been dogged by controversy surrounding its aggressive approach to local governments and traditional taxi services.
It has been banned from taking bookings in the Netherlands because authorities say it lacks a special license.
On Monday Uber was banned from operating in the Indian capital New Delhi after a female passenger accused one of its drivers
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