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Cab Companies Sue Uber Over Unfair Competition and False Advertising

  • By: Robert Klein

Digital ride-booking service Uber is facing a lawsuit from 19 California cab companies. Most recently, a federal judge in San Francisco allowed the cab companies to pursue parts of the case, dismissing allegations of unfair competition. An attorney representing the cab companies argues they have suffered considerable financial damage due to Uber’s misleading statements about the cab companies’ level of safety.

Uber is a ride-booking service that works through smart phone apps. Users install the app and request a ride, and a driver arrives to pick them up based on their GPS location.

Much of the lawsuit centers around Uber’s claims that it offers the “safest rides on the road”. The claims have irked the cab companies, which argue that their reputations and businesses have been damaged.

Cab companies claim their drivers are required to submit to extensive background checks, but allege Uber does not require the same of its drivers. However, Uber has claimed that it requires background checks at the county, federal and state level. Uber charges a $1 “safe ride fee” that pays for background checks. Users also rate Uber drivers in an effort to filter out any bad seeds.

Cab companies have claimed the background checks do not require fingerprinting, and are not as thorough because they are not run through a Department of Justice database. In addition to background checks, the cab companies claim they undergo more vehicle inspections than Uber.

Is Uber Guilty Of False Advertising?

Due to the court ruling, Uber will have to face the allegations of false advertising. In false advertising cases, competitors of a business often make discouraging claims about rivals to steal customers. Businesses might make claims they offer the same services, but better. Whether these claims about Uber are true have yet to be seen, and we may post further updates on this case in the near future.

Klein Trial Lawyers – Business Litigation Attorney

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.