Chicago Taxi Companies And Riders Sue Uber For Targeting Cool Passengers

from the how-dare-they! dept

We've written about innovative car service company Uber a few times before, though mostly for its bizarre run-ins with local regulators, who often seem to think their job is to protect local taxi companies from innovative competition. Uber, for what it's worth, has used many of these attacks as marketing vehicles to get more attention to their service, and the local regulatory agencies almost always seem to back down. Of course, most people recognize that these agencies are often just doing the bidding of local cab companies. In Chicago, it appears that the cab companies have taken matters into their own hands and have sued Uber directly.

You really have to read the full complaint below, as it is a classic case of an industry being disrupted and lashing out at the disruptive player, repeatedly screaming "but you can't do that!" out of sheer jealousy and spite. It really is just a litany of claims about why they just don't like Uber. First, they whine that Uber "misleads" customers by comparing itself to taxi and livery services, even though it's somewhat innovative system is to actually empower independent drivers. But that's not actually hidden. And, um, I'm not sure why the taxi companies have any standing to complain about that.

Next, it argues that Uber charges too much, and adds a 20% gratuity. Again, all of this is clearly laid out to users of Uber's service. If they're willing to pay what Uber's rates are, then what's the problem? And again, if anyone has standing on that, it would be the users, not the cab companies -- and we'll discuss the fact that some users are suing too in a moment. There are a number of other complaints will all just seem like sour grapes.

My favorite part, though, is the claim that Uber "illegally discriminates against people without credit cards and smartphones." Did you know there was such a thing?

While Uber advertises itself as “Everyone’s Private Driver”—that is in fact a gross mischaracterization as Uber only chooses to cater to what it perceives as the technologically elite and well-off individuals. It is obvious that through Uber’s marketing it caters to young, hip, urban professionals, which is perfectly reasonable on the livery side. But using the publicly regulated (and limited number) taxis in order to create a two tier system— “high quality taxis” for the “haves” and the remainder for the “have nots”—runs contrary to the many ordinances enacted in Chicago to ensure non-discriminatory service for everyone in Chicago, not just those “cool” enough to use Uber.

The one area that does seem a little iffy on Uber's part is that it signs up cab drivers who work for some of these companies that are suing -- and Uber's website (in at least one place) seems to imply that it has "partnered" with different cab companies, when the reality is that it lets the drivers sign up themselves. I could see where the cab companies may have a legitimate beef if their brands are falsely implied to be associated with Uber's.

That said, all of this just really seems like jealous taxi companies. Uber offers a useful service for those who want it. It's actually somewhat expensive -- and that's why plenty of people I know don't use it. But if you're willing to pay for the convenience, many, many customers seem to like it. It really is quite convenient. Either way, most of these complaints seem like the ones that either consumers should be making... or that local regulators should be making. I don't see how the taxi companies have any standing on most of the issues -- with the one about the implied "partnerships" being a possible exception.

Of course, on that point about users having standing... in an amazing coincidence... some Uber users have also picked the same week to file a class action lawsuit against Uber in Chicago, claiming that its charges are "deceptive." Of course, the actual fees are not, in fact, deceptive. They're very clearly laid out on Uber's site. So, instead, the lawsuit claims that the deceptive bit is that they add a 20% gratuity (again, clearly disclosed on the site) but that the driver only gets half of that gratuity.

They're arguing that this is really charging higher metered rates. But given that what the user pays is all completely disclosed, I'm still at a loss as to what the problem is. The user isn't deceived about the rates they pay. They're quite clear. Given the timing of the two lawsuits, it certainly feels like the cab companies may have helped "set up" users to complain.

In the end, the whole thing is unfortunate, and yet another sign of legacy industries unwilling to compete in the market. Uber offers a decent product. The price is high, and some people are willing to pay that price. If cab companies competed effectively (and they already have the price advantage), then there wouldn't be a problem. But, Uber's discovered that people like to pay for convenience and these cab companies apparently aren't well set up to deal with that. Rather than adapt, they're suing.

Filed Under: chicago, disruption, innovation, sour grapes
Companies: uber