Cabbies sue to drive car service Uber out of San Francisco

The nationwide battle between the taxi industry and Uber took another twist this week as San Francisco cabbies filed a class action lawsuit, claiming the upstart car service is engaged in unfair competition and illegal interference in business relations.

In a complaint filed in California Superior Court, cab drivers Leonid Goncharov and Mohammed Edine say Uber drivers are breaching San Francisco taxi laws by, for instance, not accepting cash and failing to use meters.

The two drivers say they have brought the case on behalf of all other San Francisco cabbies, and are seeking an injunction to shut Uber down and an order for the company to hand over its profits since 2010.

The case turns on the distinction between taxis and “limousines” or black cars which are not permitted to take street hails. Uber claims it is part of the former class while the lawsuit points to Uber’s “e-hails” and dispatch service to say it is the latter. In other words, if it acts like a taxi, it should be regulated like a taxi. (you can read the full filing below).

Update: Uber has retained prominent lawyer John Quinn who said in an email that the company complies with all laws and that, “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.”

Disruption in the taxi industry

This is just the latest legal headache for Uber, which is facing regulatory pressure in Boston and New York and a class action lawsuit brought by Chicago cab companies that accuses it of pocketing tips and catering to rich hipsters.

In the bigger picture, Uber has come under fire because its business model — which allows people to summon cabs based on the GPS in their smartphones and pay with a pre-stored credit card — is proving disruptive to the traditional taxi business.

Outspoken Uber owner Travis Kalanik has been clashing with cabbies head-on. He recently railed against “industry corruption” and said Uber “would continue to fight the good fight,” according to The Next Web, which was first to report the story.

While Kalanik has succeeded in rallying users and tech types to his defense, the story may not be as simple as a hidebound industry resisting an innovator. That’s because taxis provide a vital transportation function like buses or semi-trucks, and cities have long used rules in an attempt to make them safe and available to everyone (that’s not to say the existing system works). While Uber and other upstarts like Hailo appear to have discovered a more efficient distribution model, it appears likely they will have to jump through a hoop or two before becoming a permanent part of the urban transportation eco-system.

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(Image by Pius Lee via Shutterstock)