California Taxi Companies Team Up To Sue Uber For 'False Advertising'

from the how-about-just-competing? dept

Fri, Mar 20th 2015 1:32pm — Mike Masnick

The week of attacks on Uber continue. We already noted the problems the company was having in South Korea and France, and around the time that went up, Uber got banned in Germany. And then, a bunch of California taxi cab companies teamed up to sue Uber, claiming Uber is engaging in deceptive advertising by claiming that its safer than a taxi. The companies are particularly annoyed with the fact that Uber charges a "safe rides fee" but it's not clear if the company actually uses that money for safety purposes. As with similar lawsuits in other cities, it's difficult to see how this is anything more than sour grapes against a company that is serving customers better.

Uber certainly has its issues, but the arguments that cab companies make against it just seem like the kind of thing competitors who don't want to compete make against the hot new thing. Whatever happened to just competing by building a better service, rather than suing? When I get into any kind of car -- whether driven by myself, a family member, a friend, an Uber driver or a taxi driver, I know that there's some amount of risk involved. That's the nature of getting into a car. I don't think that an Uber driver is any safer, even when I do pay the $1 "safety" fee. I use services like Uber and Lyft for their convenience, not because there's any magical formula for safety. So, when the cabbies make this argument, it just rings hollow:

These statements actually deceive, or have the tendency to deceive, customers into believing that riders who pay this $1 per ride fee to use UberX are safer than if they chose transportation via a taxi cab. Because this “Safe Rides Fee” is a separate line item on the receipt that Uber issues to customers, this bolsters the consumers’ expectation that they should be receiving the safest ride possible. Put differently, considering that Uber explicitly specifies that this is an additional safety fee, it is reasonable for consumers to expect that they will be receiving a ride safer than that provided by Plaintiffs’ taxi cabs, as Plaintiffs’ taxicabs simply charge a total fare, without imposing any additional surcharge to ensure a “Safe Ride.”

No. I use Uber and I don't think that by paying $1 I'm any safer. But I do think that Uber, like any company, recognizes that having happy customers is important, and that includes making sure that drivers do a good job -- which, for the most part they do. I don't need some extra level of regulation that limits the competition, but doesn't actually make me any safer. I prefer a system where drivers actually compete to do a good job, knowing that if they don't they may get a bad rating and kicked out of the system. Uber works because of competition, and it's that simple fact that has these taxi companies so upset.

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Filed Under: cab hailing, california, false advertising, ride sharing, safety
Companies: uber

24 Comments

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Whoever, 20 Mar 2015 @ 1:51pm

Fees
I think that you (Mike Masnick) need to get over your admiration for Uber and look at this more reasonably. The reason companies add "fees" is to mislead customers about the actual price of the service.

In supporting Uber in this specific issue, you are supporting a form of misleading pricing.
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Dave Cortright (profile), 20 Mar 2015 @ 2:01pm

This fee does drop my respect for Uber
Regardless of the language they choose for this fee, as a consumer I think it's reflects poorly on a company to tack fees onto the base charge for the service for what should just be a cost of doing business. It makes me think of TicketMaster and telecom companies who use it as a way of extracting more and more profits. Unfortunately Lyft also has a "Trust and Safety" fee, so it looks like a bad precedent has already been set here.
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radix (profile), 20 Mar 2015 @ 2:04pm

Uber sounds fine and all....
But if a restaurant were to charge me a line item "fresh water" fee, I'd be a little worried. What about people who don't opt for the fee? Are they getting toilet water?

Does this imply Uber's standard service level is not safe?

I don't know that this rises to false advertising, but a little transparency about this fee would go a LONG way.
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avideogameplayer, 20 Mar 2015 @ 2:12pm

And where does money go to? Uber? The drivers so they can keep the vehicles in peak performance?

That might never be answered...
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Anonymous Coward, 20 Mar 2015 @ 2:16pm

Masnick is happy to be ripped off by trendy con artists.
You DON'T expect anything extra for another $1? ... Umm, okay. If you get nothing visible for it, then it IS a ripoff! -- Seems as though you wouldn't mind paying a few more for a legal cab, then, Mr Rockefeller.

Uber is just one of your several "new" corporations that you exempt from rules you hold others to: overlook that Apple is totally proprietary and secretive; that Google is even more invasive and secretive, can't be relied on for long term commitments in its services, besides gives NSA "direct access"; promote Spotify even though it's just a "new" gatekeeper still based on the game of ripping off artists that create content; and I suppose tomorrow morning you'll again be promoting Kickstarter, even though it accepts ZERO responsibility when people get ripped off.

You just seem to favor big trendy corporations with ridiculously high profit margins.
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limbodog (profile), 20 Mar 2015 @ 2:26pm

Safety from what?
I didn't think it was safety from accidents, I thought it was safety from the driver being a psychopath, since Uber's background checks were more strict than the cab companies. (I spoke at length with one of my Uber drivers, who also drives a cab, and he said a number of other cab drivers he knew couldn't pass the required checks.)
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Anonymous Coward, 20 Mar 2015 @ 2:45pm

Re: Fees
I see no defense of the fee, just a post saying it's ridiculous for the taxi companies to sue based on it.
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David, 20 Mar 2015 @ 2:59pm

They are right
The taxi drivers are right. The "safety" fee does make it sound like there's some extra safety involved. That's exactly WHY they itemize it, to make the customer feel better. They could just roll all the costs together but they have opted for this with an express marketing purpose.
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Anonymous Coward, 20 Mar 2015 @ 3:11pm

Standing?
I'd be interested to know if they have to prove standing to sue based on having actually paid the fee (and hence admitting that they have used uber)
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Dave Cortright (profile), 20 Mar 2015 @ 3:47pm

Are the taxi comanies prepared for discovery?
Another thought: what if it turns out that per mile traveled, Uber rides are actually safer? Are the taxi companies prepared to let Uber lawyers go through the discovery process on their collision and safety documentation? Given the strong feedback loop resulting from public reviews, I'd bet that Uber drivers are more incented to drive in a calmer and perhaps safer manner. Just a hypothesis, but it'd be very interesting to see what the data shows.
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Anonymous Coward, 20 Mar 2015 @ 4:50pm

"I prefer a system where drivers actually compete to do a good job, knowing that if they don't they may get a bad rating and kicked out of the system. Uber works because of competition, and it's that simple fact that has these taxi companies so upset."

This seems all well and good until you consider that someone has to be on the receiving end of terrible (and possibly life-threatening) service before the bad seeds are filtered out. And that this has to happen regularly.

It's the same general idea as food inspection and health safety when it comes to food service. I mean, sure, you could have a free market competition system where the unsafe restaurants are filtered out by customer review...unless you're one of the guinea pigs that has to get exposed to unsafe practices before it gets noticed.

Not to say that regulations and inspections ensure safety, especially if they're lax, but it's still better than a system that assumes everyone is safe and honest until they screw up and someone gets hurt.
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Chronno S. Trigger (profile), 20 Mar 2015 @ 7:11pm

Re:
But that's not what's happening here. Uber goes threw more checks than regular cab companies before someone can drive for them. The rating system is just a way to continue checking up on drivers. It's faster and more direct than what can be done with normal cabs.
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Anonymous Coward, 20 Mar 2015 @ 7:31pm

Uber is just another one of the current crop of businesses that get to play by the "little book of regulations" while their legacy counterparts (taxis) have to play by the "big book of regulations".

Either Uber should have to play by the "big book" or taxis should be allowed to play by the "little book". That would be fair competition, and then any supposedly "superior" features like "better smartphone apps" would not get the unfair focus they do now of being credited as a "reason" for its success.
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alex (profile), 21 Mar 2015 @ 1:30am

"I use Uber and I don't think that by paying $1 I'm any safer."

That makes no sense. Why pay it then? There must be some nonzero change in your expectations, for you to go out of your way to add $1 to your charge. Accordingly, the expectation that Uber be required to show some sort of nonzero (hopefully, a substantial one) meaning behind such a charge is a reasonable one.
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Delilah M., 21 Mar 2015 @ 9:12pm

Cab companies and drivers have only themselves to blame
I've spoken with my wallet. So have many other people in California. UBER works for me. I have a friend who works in the media, and he tells his own UBER story every chance he gets, about how a cab driver parked at the curb rolled his eyes and refused his offer of a $20 bill for a quarter-mile cab ride. He was only going up the street to his hotel after visiting a zoo, but he had his pregnant wife with him and his six-year-old had fallen asleep in his arms. So he hit up the UBER app on his phone, and had a ride within 3 minutes. The cab driver had second thoughts about refusing the trip, but it was too late. By the time he got out of his cab to approach my friend, a UBER driver had already pulled up. So the rude cab drivers and their companies have signed their own death warrants.
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Whoever, 21 Mar 2015 @ 10:04pm

Re: Cab companies and drivers have only themselves to blame
about how a cab driver parked at the curb rolled his eyes and refused his offer of a $20 bill for a quarter-mile cab ride

Long before the existence of Uber, I had a similar problem at an airport in France. It was late at night and the taxi drivers wanted to make their last fares a ride into the center of Paris. My solution was to get into a taxi before telling the driver where I wanted to go.

Some cities require taxi drivers to accept fares if they stop for a potential customer (as long as the destination is within the city).
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John Fenderson (profile), 22 Mar 2015 @ 8:45am

Re: Cab companies and drivers have only themselves to blame
This. Traditional cabs are risky. In most cities I've been in, I've had far too many instances where cabs I've called simply don't show up, the experience of riding in the cab has been unpleasant, etc. In short, I only use cabs when I have no other option. That's better than my wife, who refuses to use cabs at all.

I've never used Uber, Lyft, etc., but it seems very unlikely that ride-sharing services could be worse than traditional cabs. The taxi industry has left itself open to this situation by depending on regulations rather than providing good service to keep competition at bay.

Every time I hear cabs complaining about ride-sharing services, it comes off as petty whining that the legally-enforced oligopolies are threatened, and they might have to actually compete for a change. Every lawsuit that I've read, including this one, just makes the cab companies look worse.
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Anonymous Coward, 22 Mar 2015 @ 6:43pm

Re: Re:
Uber goes threw more checks than regular cab companies before someone can drive for them.

Don't assume so. Listen to podcast 15. They discuss the very basic background checks that Lyft and Uber give. Basically they just assume that if you have a valid drivers licence you are safe enough and a care with four wheels. Taxi drivers (at least Down Under) have a more rigurous procedure.
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John Fenderson (profile), 22 Mar 2015 @ 8:15pm

Re: Re: Re:
Even those basic checks are more than is done by cab companies around here. Here, the only requirement is that you have a license and a clean driving record (no accidents or moving violations) within the last five years or so.
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vintermann, 23 Mar 2015 @ 1:15am

Re: Safety from what?
That is exactly the crux of this issue: The suing California taxi drivers are arguing that they have more stringent background checks (requiring fingerprints to be regularly checked against a government database, among other things).

Another issue is that background checks don't matter if the background-cleared driver lets another drive for him, something that can be very lucrative. It is an issue in traditional taxis too, but judging by how Uber's background check seems to be a one-off thing, I bet it's a bigger issue with them.
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Khaim (profile), 23 Mar 2015 @ 12:59pm

Re: Regulations
In one sense, you're right. But the thing is, the taxi companies have spent a long time intentionally building that "big book of regulations". Legacy players have a strong incentive to create more rules (that they already meet) which prevent anyone new from competing with them.

They made their bed, now they get to lie in it.
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Dan, 16 Jul 2015 @ 11:02am

Why get a ride in a Taxi, When you can take a NICE CAR.
I have used a taxi several times and it took forever just to find a taxi. Google search doesn't help and you have to ask them for there card just so you know the number. Most waits are 20 mins to 45 mins which is so long to wait.

Me and my fiance started using Uber about 6 months ago and love it. We will go on a date and knowing we will have a few drinks we go on uber app and request a car. You get to choose which vehicle you get to ride in. I like being able to arrive at a restaurant in a nice vehicle instead of a yellow taxi or a prius with a taxi sign on top. Looks like a pizza guy lol. Everytime I have used uber they have let me hook up my blutooth to there stero and play the music I like, also they are always friendly and will talk to you. Have you have that experience with a taxi.

Now they are trying to ban UBER from California. Why would this happen this is the best thing that happened to a car service. You don't have to be embarrassed to show up in a yellow taxi. You get to show up in a nice car. with a well dressed driver as well. We in California like to ride in style and we can't let this happen
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Klaus, 19 Aug 2015 @ 2:52am

Re: Re: Re: Re:
UK has stringent requirements - to get a taxi licence from a local authority, a driver must pass an enhanced DBS (criminal records) check.

https://www.gov.uk/disclosure-barring-service-check/overview
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bluebirdcab (profile), 18 May 2016 @ 5:13pm

False advertisment
Uber acts like no more mr. nice guy
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