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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?
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.
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.
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Reader Comments (rss)
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Normally you stick up either for free speech, or innovation, or the little guy, but this move is a strange one.
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With that argument . . .
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- and in other news -
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Re: - and in other news -
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The most positive things the article states about Uber are that they disclose their (high) prices, have a decent product, and are innovating.
In the case of your three criteria, Uber could be considered as bringing innovation and as being the little guy.
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have not's
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" There are a number of other complaints will all just seem like sour grapes. "
i think a word got dropped somewhere there.
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So then we should outlaw limos, town cars, SUVs because everyone should ride in identical cabs so that we are all equal right?
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Re: have not's
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Seen that somewhere...
In this case, people would be overcharged on the fly by their origin and spoken language alone. Tiping customs are another debate, but not disclosing the "Quebec tax" upfront to customers before taking their orders is deceptive and discriminatory.
However in the taxi case, the 20% gratuity is disclosed upfront and applied to everybody, rich or poor. This is not discriminatory.
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Re: Seen that somewhere...
1) It may make the price too high for some people to take these "special" taxis, and
2) Makes it possible for the richer people to buy their way to the front of the line.
It's no different than standing in line to get into the hot club, and having some dufus with more money than brains dropping a hundred bucks on the doorman so him and his best buds can skip in. It's an unfair, unfriendly business practice.
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Re: Re: Seen that somewhere...
What we're looking at is not one club with two lines, but 2 similar clubs with different offerings and pricings. Does FedEx or Purolator discriminate against USPS users for offering faster delivery at a higher price ?
I'll concede that a quick, surface look does make it seems like Uber is a taxi cab company.
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Taxi - Some of them are pretty fucking nasty.
Win:Uber - So far for me pretty fucking clean.
Taxi - Drivers that can be pure pricks and companies don't even give a fuck when you report it.
Win:Uber - Everyone I've dealt with so far has been nice. A few were not chatty but that's alright because they were not dicks about it.
Win:Taxi - Cheaper to use.
Uber - More expensive than taxis.
Taxi - Change. "Pain in the fucking ass" "I hate change!"
Win:Uber Change IN A GOOD WAY! EX: Jacked in to my CC "EZPZ Thank fucking god!"
Taxi - Open my door? ROFL You're a guy!
Uber - Can I get your door sir? ROFL I'm a guy!
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Re: Re: Seen that somewhere...
Is it because everyone should have equal access to transportation? Airlines can have a plane that is sold out of economy class tickets, and yet someone willing to pay for an executive class seat could still get on that plane, and will receive more comfortable seats and better service. And some of them even have private planes that will fly them around, whenever they want!
Discrimination? Or the fundamental basis of capitalism?
Yeesh.
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And likely illegal. Slam dunk deceptive business practices.
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Re: With that argument . . .
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Typical union/lib/99% thinking. We can't have nice things and shitty things, because some people can't have nice things. Solution? Everyone can only get shitty things.
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Re: Re: With that argument . . .
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Can you imagine being in a world where the price of the taxi depended on your ability to negotiate, rather than a fixed price?
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You talkin' to ME?!
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That's exactly how taxis work here.
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Really?
This happens all the time in the restaurant industry, and even some cab companies where drivers have to give part of their tips to the dispatchers and sometimes those who clean the cabs.
So...spare me the deceptive business practices routine regarding a clearly disclosed 20% gratuity. How about I complain if I find out my tip is used to buy drugs and the driver didn't disclose that little fact?
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Re: Really?
Excellent reading comprehension fail.
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Re: Re: Seen that somewhere...
If I could avoid cabs FOREVER, I'd be happy. Sure, Uber is 20% more, but i delivers what it promises just when I need it. And when I don't, I just take the bus or subway.
And, BTW, there is no 'buying to the front of the line'. A black car hired in the traditional way is at least $60/hr, Uber is way cheaper and available to anyone. You don't even need a smart phone, their service works over SMS as well. And with the upcoming Uber X service, the price will be inline with cabs.
Fuck cabs - let them and their shitty service go out of business - no one will miss them. The only thing we need is more Ubers and finally put the shitty monopoly cab business out of business.
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Re: Re: Really?
You seem a bit upset about this, why is that?
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Re: Re: Seen that somewhere...
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I decide, what and if you get a tip, not you.
That is just charging me 20% more, that isn't a tip, it is borderline theft
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Re: Seen that somewhere...
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That's what I also say when I can't afford something, discrimination!!
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Re: Re: Seen that somewhere...
So what? I chose to use my discretionary income in this fashion. I should be forced to take Southwest? That makes no sense.
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Re: Re: Re: Seen that somewhere...
It's charging more than the standard taxi rates, which is generally against the law for the regulated industry.
"Does FedEx or Purolator discriminate against USPS users for offering faster delivery at a higher price ?"
If Purolator were getting USPS drivers to deliver for 20% over their salary, charged to the customer... yes.
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Re: Re: Re: Re: Seen that somewhere...
But negotiation doesn't necessarily have anything to do with it. In most industries, companies are allowed to offer products and services that are differentiated along a number of dimensions, and price them how they see fit. Why should this one be different?
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What do the 1% ride around in?
Maybe that chip on your shoulder is obstructing your view of reality. Or maybe it's fox news, which isn't really news. It's entertainment, or at least that's what they call it.
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Re: Re: Re: Really?
Probably drives a Taxi in Chicago.
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Actually no. The words owner-operator come into play. If a person owns or leases their own car their is no issue unless they are doing this during contracted hours. Drivers without exclusive contracts can do what they want.
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Liberal Economics = Protected Markets
Conservative Economics = Open Markets
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Re: Really?
Note: no employee (in the US) is EVER required to participate in a tip pool. It is illegal for an establishment to require it, and they can get in quite a bit of trouble for doing so.
And the AC is right, if the gratuity is split with the establishment, it isn't a gratuity; and it is most likely illegal for them to even TOUCH the tip money. I know when I managed a restaurant, I was not allowed to ever handle the employees' tips.
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Response to: Anonymous Coward on Oct 6th, 2012 @ 12:23pm
Über don't do nothing... just an app between cabbies and passengers and take 10% from every trip ...
... Smart guy
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And not to mention Uber is extremely convenient for me. (I still remember when we had to stand in the cold for about an hour because no dispatch wanted to send a cab our way -- and that was within city limits, mind you!) Every single taxi ride I take, I book on Uber now.
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Tip is included in the price. • Flat rates apply to direct trips between specified locations. Additional stops may result in a higher fare. • Applicable tolls and surcharges may be added to your fare. • At times of intense demand, our rates change over time to keep vehicles available.
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Uber
The 20 percent gratuity is not real. It goes straight to Über. Drivers, unless they own their vehicles, make about 50 percent of whatever is left (depending on the fare ie suv vs black, über takes a higher percentage). All operating costs are put on the driver...gas, tolls, the stupid bottled water über expects you to have in the car. The driver is typically not making a lot of money at all. Now they are trying to screw all their towncar drivers by enlisting cab drivers, the same industry they were trying to disrupt! Über deserves lawsuits. At the end of the day they are just trying to make a quick buck, this evident by the method in which the uber taxi service works (cost of the cab plus twenty percent to uber for doing nothing).
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