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.

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Companies: uber

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Comments on “Chicago Taxi Companies And Riders Sue Uber For Targeting Cool Passengers”

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74 Comments
MrWilson says:

Re: Re:

I’m not seeing too much of a defense of Uber here so much as a lot of doubt on the legal standing of the taxi companies that are suing.

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.

TucsonMatt says:

Re: Re: Re: Really?

Do you know if the waitperson you tip at the restaurant is getting to keep all that tip, or is she required to split it with the bus staff, the bartender, hostess, etc.?

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?

Anonymous Coward says:

Re: Re:

I have the Uber app on my phone and have used them a number of times. They tend to be about 20% higher than cabs. But, I can conjur one up, bring it to my location at a specific time, monitor its progress to my destination and at the end of the trip, simply thank the driver without having to fumble with cash, a credit card, receipts. They are usually Lincoln Town Cars with a driver wearing a suit instead of the usual unkempt rabble driving a junker. These guys get out and open the doors for you and often will hand you a bottle of water. All-in-all, it’s a very pleasant experience and makes the 20% premium over a demolition derby car cab ride seem like a bargain.

That Anonymous Coward (profile) says:

“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”

So then we should outlaw limos, town cars, SUVs because everyone should ride in identical cabs so that we are all equal right?

Maxwell (profile) says:

Seen that somewhere...

I’m reminded of this story about secret foreigner fees. (more details here)

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.

Anonymous Coward says:

Re: Seen that somewhere...

It is discriminatory, because it has the following effects:

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.

Maxwell (profile) says:

Re: Re: Seen that somewhere...

Your analogy would be correct only if Uber was exacly like taxi cab company, however Uber offers a different class of vehicules, coverage, means of payment(you dont pay the driver directly) and hailing, etc.

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.

Anonymous Coward says:

Re: Re: Re: Seen that somewhere...

Yes, except they are using the same taxis, trying to get the drivers to stop doing their usual work to serve the Uber customers – for a guaranteed tip.

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.

Hephaestus (profile) says:

Re: Re: Re:2 Seen that somewhere...

“If Purolator were getting USPS drivers to deliver for 20% over their salary, charged to the customer… yes.”

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.

Dixon Steele (profile) says:

Re: Re: Seen that somewhere...

Why is ::this:: the area where everyone has to offer the same service for the same price? Is it discriminatory that some restaurants make their prices too high for some people to eat their “special” food? Or that some concerts are priced too high for people to listen to their “special” music? Or that clothing, smartphones and, heck, even other transportation services offer varying products at varying prices, some of which are unaffordable to some people? Maybe we should outlaw eBay, because the person who’s willing to spend the most money there gets preferential treatment.
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.

Dixon Steele (profile) says:

Re: Re: Re:2 Seen that somewhere...

I don’t have to imagine it. I’ve been to places where that’s how it works, and they seem to survive.
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?

Chris Maresca says:

Re: Re: Seen that somewhere...

Uber is successful because cabs don’t deliver what they promise. I can’t even begin to count the times a cab has not shown up or taken 30-50 minutes to arrive. Plus the drivers are generally rude, often attempt to maximize fares by taking longer roots. And every time those things happen, it winds up costing ME money, directly or indirectly.

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.

Anonymous Coward says:

Re: Re: Seen that somewhere...

I really don’t see it that way. I can fly to my destination on Southwest and suffer the transit bus environment or take another carrier and upgrade to first class and get better service, more comfort and priority for my luggage.

So what? I chose to use my discretionary income in this fashion. I should be forced to take Southwest? That makes no sense.

Dreampod says:

Re: Seen that somewhere...

Incidentally, the reason Canadian’s and Asian’s often seem stingy in their tips is that we come from cultures that actually pay our servers a decent wage so tipping is purely a payment for good service. The fact that the servers in the US are upset about not getting tipped well regularly suggests that maybe they need to start doing their job properly instead of relying on foreigners to know that their country is so backwards that they’ll be eating catfood if you don’t tip them 20% for doing a shitty job.

Anonymous Coward says:

Lets see.

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!

X says:

Re: Response to: Anonymous Coward on Oct 6th, 2012 @ 12:23pm

How come ?ber taxi is more expensive ??? It’s the same price as any other cab, but you pay a 20% tip … or you don’t give any tip ?… 10% is for ?ber and 10% for driver …simple as that. ?ber cars … are the same cars you can find on the street , nothing special and the customers the same …
?ber don’t do nothing… just an app between cabbies and passengers and take 10% from every trip …

… Smart guy

Anonymous Coward says:

Re: Re:

Sorry, but you are targeting the wrong demographic. The taxi companies have the monopoly, backed by the entrenched laws that prop them up. The entire concept of the taxi companies fighting upstart, disruptive companies, is the old facing the new, which is to say the Conservatives fighting the Progressive ideals of new entrepreneurs in the free market. Go take your whiny self to a political forum and complain about “those people takin yur jobs” some more…

Anonymous Coward says:

Really?

Do you know if the waitperson you tip at the restaurant is getting to keep all that tip, or is she required to split it with the bus staff, the bartender, hostess, etc.?

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.

Anonymous Coward says:

Seen that somewhere...

Are you sure this is right? Where I live the Uber guys are driving large black unmarked sedans. Not cabs with a light on top, company logo on the side, a mini-billboard on the back and one of those piece-of-shit crown air fresheners on the dash. If they were driving one of those, I wouldn’t bother even getting in. Also, the Uber drivers are dressed in jacket-and-tie, not looking like a refugee from the Goodwill Store’s half-off sale, and speak fluent English as well.

trish says:

I also agree that it’s weird that you’re okay with the 20% gratuity of which the driver gets only half. The company is basically taking 10% extra money for itself and putting it under the “other” category. I’m not sure, but isn’t there some law that says the cab companies (and this company) have a maximum metered rate they can charge? If so, then they’re bypassing that law by putting this 10% extra fee. If it was a flat-fee, that’d be different, but this 10% effectively ups the metered rate. Why call it a gratuity if that’s not at all what it is? Makes no sense. It’s a surcharge, not a tip.

Wesha (profile) says:

I spoke at length with one of the taxi drivers who signed up for Uber while he was driving me. He says that while he indeed gets less of gratuity, he’s really happy: Uber saves him effort to find clients. But, also, Uber offers big bounties (like $600!) for drivers who exceed service levels (i.e., like, when 90% Uber clients submitted to him are served within 5 minutes, etc.) All in all, he is on the plus side even though he gets less per ride.

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.

Anonymous Coward says:

Re:

How is it “deceptive” when it’s noted on the page that has their rates:

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.

?ber driver x says:

Uber

I drive for uber. What these people are talking about is the surge pricing. ?ber decides at certain times to raise the rates by up to 2.5 times the norm. Almost randomly.

The 20 percent gratuity is not real. It goes straight to ?ber. Drivers, unless they own their vehicles, make about 50 percent of whatever is left (depending on the fare ie suv vs black, ?ber takes a higher percentage). All operating costs are put on the driver…gas, tolls, the stupid bottled water ?ber 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! ?ber 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).

clark jennings says:

State of london taxis

Gatwick Airport is unique amongst London Airports in that it has a significant airline presence and serving a wide array of operators. Though British Airways has the largest presence you can also expect to find low cost airlines like EasyJet, Flybe and Monarch Airlines. Gatwick Airport is also the preferred choice for charter airlines.Jewelcars offers great deals on Reply

chicagolimoservice (user link) says:

limo service

Though it is possible that the Chicago,Illinois regulation will be able to fight and suppress Uber for quite some time, this sort of limo service is the way of the future. Regulation and litigation will definitely make it hard for Uber to conduct business in Chicago, but over time, technologically-driven limousine service will overtake Chicago. The consumers are fleeing away from the traditional brick and mortar run limo rental shops in Chicago and towards more convenient transportation venues. Our Chicago limo service and party bus Chicago rentals are aware of this and will most likely join Uber.

Chicago limo website

Felix Droz (user link) says:

Uber Lyft & lies made

REVISED
Re : Uber
I drove for Uber for slightly under two months and here?s what I found????.Uber is dangerous for public safety and must be shut down . Having to tap a small icon on the Uber device ( phone ) to accept, cancel, arriving, etc., and more takes your eyes completely off of the road . You are oblivious to traffic for those few seconds your looking at your Uber device which can easily cause accidents resulting in immediate death & injury . Even if you, yourself cancels the fare you must proceed with why you are cancelling to the little icons on your Uber device and doing so is a distraction, period . There are 6 icons on your Uber device requesting why your cancelling & you must select one by tapping on one of the little green icons . This is frequently done while driving diverting your eyes off the traffic ahead of you . This happened often ?.. the client will cancel for one reason or another . You receive the cancellation notice while your driving and while your driving your eyes are taken off the road so you can respond to the beeping sound coming from your Uber device . This beeping sound indicates that the client has cancelled the fare . When getting close to the pick up location you are required to notify the client by again having to locate your Uber device while driving then tapping on an ? arriving ? icon. This can be more dangerous then texting .
Furthermore, there is no time limit to driving . Unlike Taxi drivers who are limited to a ten hour driving period in, San Francisco an Uber driver can drive for 20 hours straight or more . Too much driving creates fatigue often leading to confusion, , falling asleep, hallucinations, dozing off and considerably more inattentiveness which can cause accidents resulting in injury and even death .
Being an Uber driver means you are subjected to doing unlawful things such as take eight passengers in your car when there are only four seat belts or you will lose you?re right to drive further for Uber . In my case I got a call to take nine passengers, including myself that would have been ten people total all in a mini van . The weight itself is enough to cause my tires to rub against the wheel wells of my van creating sparks from stones trapped in the threading of my tires which could ignite the fuel tank causing an explosion even killing all those passengers that are trapped inside my mini Van . It was dangerous . That much weight often causes unintentional swerving resulting in another accident with more deaths or injuries . Because I didn?t take all nine passengers out to, Isla Vista from downtown Santa Barbara and only took the legal amount of five, the passengers gave me a one rating . So, over safety concerns I was terminated from driving for doing what was lawfully right and after I explained to my, Santa Barbara – Uber representatives via email numerous times about having to take too many passengers creating unsafe driving conditions so I could be reinstated i received no response . I was then blocked from driving further for Uber because I refused to do something that was both unlawful and dangerous . You are rated after each fare by your passenger(s) from one to five and if your rating is too low you will be blocked from driving . This causes drivers to do unlawful things in order to maintain a high rating or their driving privileges with Uber will be suspended . You must also drop your passenger off at the designated location the client(s) request creating the impeding of traffic or sudden stopping so you won’t miss the client(s) destination . Again if you don’t you will be graded on your performance from 1 to 5 and in most all cases you will be given the lowest rating such as a ? one ? and you will be blocked from driving . So, refusing to take all nine passengers ( 10 including myself ) because it is unlawful , dangerous and of a safety concern to your passengers and yourself is a reason your account will be permanently suspended by Uber .
There are no vehicle inspections required by Uber drivers meaning if your car?s brakes are failing or wipers not working it?s still OK to drive in the rain . Does Uber care your brakes are failing or wipers aren?t working ? Probally not . They just want their 20% share of your fare and will claim no responsibility if your involved in an accident because they will say your an independent driver . Then if a claim is put against the driver?s insurance Company that claim will be denied because you were using the vehicle commercially . It is illegal to use your vehicle commercially unless you get commercial registration and insurance . Uber drivers do not have commercial insurance and probally most don?t get commercial registration for their vehicles or the proper insurances so driving commercially for Uber is technically illegal .
Syed Muzzafar , an Uber driver killed a little girl, Sopfia Liu age 6 in, San Francisco on New Years eve . We don?t know what really happened but here?s a guy working for pennies on the dollar that managed to make his over a $300,000 bail for manslaughter . It would seem to me that, Google bailed him out as” hush ” money because they don’t want him talking & after he’s out he will be represented by Google’s Attorneys . The finest money can buy all the while he keeps his mouth shut .
California needs to set precedence and I will do that for our great State and Nation by stopping Uber before another tragedy & more childrens lives are taken . I need your help .

Felix Jerry Droz

P.O. Box 941 Summerland, Ca. 93067

Salon Spa (user link) says:

comments

Well, Felix Jerry Droz your off to a good start and considering your going against a multi billion dollar industry
i applaud you for bringing us your statement which for all intents and purposes appears to be honest and sincere . I believe you brought about the lawsuit which was initiated by statements made in your post to, Mr. Dolan & what he stated at his news conference . After cross referencing when your posts began & when Mr. Dolan started the lawsuit against Uber it certainly appears you were
involved . I have used Uber before and the drivers always appeared to be eye balling there Uber phone while driving which for some were mounted on their windshields while others kept it elsewhere even on the passenger side of the front seat.

Captain Newberry (user link) says:

Uber & ride shares

Good for you for standing up to Uber,
Felix ! As a once former Uber driver In, Chicago i
can ‘t tell you the number of times I asked myself how this Company could even be legal . With near misses and accidents caused by using their app which all were done while driving it’s just a matter of time that the law catches up to them and they shut these ride shares down . I applaud you for your statement and having the gall to stand up to Uber, Felix Jerry Droz …….

Blackcareverywhere (profile) says:

uber vs limo

We can’t deny that uber completely changed the transportation model, people appreciate on the basis of cheap prices, and rightaway availibility.

But, on the other side, where the safety, Varity, and the liability insurance is concern, uber can’t beat the limousine companies.

As far as Limousine & chauffeur services are concern, limo companies have more variety in fleet, where they can offer the vehicles, according to guest requirement. like Stretch limousines, party buses, motor coach and etc.

Secondly, chauffeur companies carry high liability insurance for customer safety.

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