A class-action lawsuit has been filed against Uber demanding that the transportation service company stop operating and pay taxi drivers damages for lost wages.
Filed on behalf of cabdrivers Leonid Goncharov and Mohammed Eddine, the suit claims Uber creates unfair business competition by operating without regulation from state and local authorities.
Uber connects drivers with passengers looking for rides by using smartphone technology to locate and dispatch taxis, limousines and town cars.
While taxi drivers must have operating permits issued by The City, Uber employees do not, the suit claims. As a result, Uber is affecting the business of competing cabdrivers.
Meanwhile on Wednesday, state regulator the California Public Utilities Commission issued $20,000 citations for illegal operations to Uber and fellow ride-service companies Lyft and Sidecar. The citation cites a lack of proper insurance and workers’ compensation benefits, as well as a failure to enroll operators in mandatory driving classes. Previously, the CPUC had issued a cease-and-desist order against Uber, which has continued to operate.
Gary Oswald, the attorney who filed the lawsuit, said the CPUC’s actions Wednesday bolster the drivers’ claims.
“This is all part and parcel of what we are arguing,” Oswald said. “This is the consequence of operating outside of the required regulations.”
The lawsuit also attempts to recoup damages for The City’s 5,000 taxi drivers who have been affected by Uber. Oswald said he has not determined how much the drivers will seek.
John Quinn, an attorney for Uber, said the company 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,” Quinn said. “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.”
When faced with cease-and-desist orders in the past, Uber has claimed that current regulations do not take into account technological innovations made possible through smartphones.
Scott Dodson, a professor at UC Hastings College of the Law, was skeptical of Uber’s reasoning.
“Social and cultural developments can justify a change in the law, but I doubt smartphone technology would justify a change in class-action law here,” Dodson said. “And it is unclear why smartphone technology would justify a change in the substantive law regulating taxicab services.”
Mark Gruberg, spokesman for the United Taxicab Workers union, said he hopes the lawsuit is successful.
“These guys are hurting us badly,” Gruberg said. “This is a company that is openly contentious of any kind of regulation. They not only don’t care about public transportation laws, they’re disdainful of them.”