CommentaryOn Tuesday, December 9th, district attorneys from San Francisco and Los Angeles filed a consumer protection lawsuit against Uber, a popular ridesharing company based in San Francisco and operating in over 250 cities in 50 countries. The complaint alleges that Uber misleads consumers about their safety, overcharges them and completely disregards California law.
“Uber has refused to comply with straightforward California laws that protect consumers from fraud and harm,” San Francisco District Attorney George Gascon and Los Angeles County District Attorney Jackie Lacey stated. “These companies can be innovative in the way they deliver services without ignoring the laws that protect the public.”
Uber’s rival, Lyft, also based in San Francisco, settled with the city for $500,000 over similar accusations of making “false and misleading statements” to consumers over adequate background checks on their drivers. Lyft additionally agreed to stop all airport pickups until necessary permits are obtained and to submit its app to a state testing agency to assure their calculation of fares are proper.
Specifically, Gascon and Lacey state in their complaint that Uber allegedly portrays misleading statements regarding background checks the company obtains on their drivers, while also falsely charging a $1 “Safe Rides Fee” and a “fraudulent” $4 airport fee.
Uber’s $1 “Safe Rides Fee” “supports continued efforts to ensure the safest possible platform for Uber riders and drivers, including a Federal, state and local background check process, regular motor vehicle checks, driver safety education, development of safety features in the app and more.” Gascon and Lacey stated that Uber’s rationalization for applying this $1 fee was because drivers underwent rigorous screening, beyond local requirements.
Uber fails to use fingerprinting technology to link prospective drivers to their criminal history. Instead, Uber relies primarily on potential drivers submitting their personal information online, then contracts with a private company, Hirease, to perform background checks. However, without fingerprinting, Gascon considers the background check “completely worthless” since there is no way of telling whether the information provided is definitively associated with the driver. The $1 “Safe Rides Fee” may not be justified since taxi drivers are required by law to participate in a more comprehensive background check, which includes fingerprinting.
If you are catching an Uber to or from the San Francisco International Airport, expect to be charged an additional $4 airport toll fee, even though drivers are not paying any money to the airport, according to Gascon.
Uber’s policies also include no preliminary drug screening, so drivers are screened only after passengers have complained. Insurance coverage for Uber drivers is also $50,000 per injury, with a max of $100,000 per ride, if a driver has not started the trip when the accident occurs. In comparison, taxi drivers in Portland, Oregon are required to hold insurance that includes $500,000 per incident.
This consumer protection lawsuit seeks a court order blocking Uber from making false statements regarding background checks on their drivers, restitution to consumers for fees, as well as penalties of up to $2,500 for tens of thousands of violations, Gascon states. Uber could probably afford to settle with the city, like Lyft, since they recently were given a $41.2 billion valuation.
Eva Behrend, a spokesperson for Uber, told Business Insider, “Californians and California lawmakers all agree—Uber is an integral, safe and established part of the transportation ecosystem in the Golden state. Uber has met with the District Attorneys to address their concerns regarding airport operations, the Uber POOL product, background checks and operation of the app. We will continue to engage in discussions with the District Attorneys.”
This lawsuit has followed after a string of unfortunate events for Uber recently. On Monday, December 8th, Uber was banned in New Delhi, after a driver allegedly raped a passenger. Uber could potentially be facing a nationwide ban in India. A former Uber driver is also facing a vehicular manslaughter charge after hitting a 6-year-old girl last New Year’s Eve. Resistance of Uber has also been met with bans in the Netherlands, Thailand and Spain. Portland, Oregon is even suing the company.
Richard Torrenzano, chief executive of the Torrenzano Group, a reputation and high stakes issues management firm stated “there will be an enormous backlash by governments and a push by Uber’s competitors in cities around the world who are more established and have been required to meet various government regulations.”
In California, the Public Utilities Commission (CPUC) recently clarified requirements for ridesharing companies like Uber to operate, demanding them to hold more comprehensive insurance polices, as well as conducting more thorough background checks on potential drivers and safety inspections on vehicles. Additionally, the CPUC categorized Uber, Lyft and Sidecar (yet another ridesharing company) as a new category of transportation services called transportation network companies (TNCs). However, the definition of a TNC has led to confusion. According to the CPUC, a TNC is defined as “a company or organization operating in California that provides transportation services using an online-enabled platform to connect passengers with drivers using their personal vehicles.” Government officials remain unimpressed by the notion that ridesharing companies are not operating as taxis, therefore getting to avoid regulation.
Thilo Koslowski, vice president and automotive practice leader at the technology analysis firm Garter, said the regulatory obstacles Uber is facing is no surprise, since the company “is still young.” Koslowski noted Uber’s expansion speed as a factor of the problems it is facing, but it is a “part of growing up.” Koslowski warned that Uber should address more than better background checks for their drivers and advises technological solutions such as “security cameras or an SOS button in each car for passengers.”
Taxicab companies are also battling ridesharing companies like Uber. Melwood Global and Interactive Strategies have been working together to represent the Taxicab, Limousine, & Paratransit Association on a campaign called “Who’s Driving You?” which blasts safety lapses within the ridesharing industry. The campaign video entices viewers with four alleged myths about Uber: (1) that Uber is a technology company, (2) insurance or uberX services keeps people safe and covered, (3) Uber is a ridesharing company that doesn’t need to follow taxi laws, (4) UberX doesn’t need regulation [because] deregulation is a good thing. Colorado Governor John Hickenlooper seems to agree with the notion of deregulation for TNCs, stating: “rules designed to protect consumers should not burden businesses with unnecessary red tape or stifle competition by creating barriers to entry.”
With all the backlash Uber is facing, is there a bright side? Yes. A new study found that taxi drivers are more prone to take risks and speed than Uber or Lyft drivers, as well as regular drivers. Zendrive, a driving analytics company, tested the driving habits of more than 1,000 San Francisco drivers and concluded that taxi drivers were 46% more likely to speed than rideshare drivers and 18% more likely to speed than average drivers. The study also concluded that taxi drivers were particularly bad at obeying traffic laws, since 60 percent of the taxi rides in the study included a safety violation (such as speeding or phone usage).
Ridesharing companies like Uber continue to remain more popular than traditional taxis as well. As for the safety pushback Uber is receiving, I prefer to take an Uber or Lyft over a taxicab any day. As soon as you open Uber’s app and start the process of getting a ride, you can see the drivers that are closest to you via tiny moving cars on your smartphone’s screen. After you choose a ride successfully, you can track the location of your ride using Uber’s map, which even offers an estimated time of arrival. Uber also provides you with the make and model of the car picking you up and a picture and name of the driver. Once you get into your Uber, you are provided with another estimated time of arrival, this time to your destination.
Over light conversation, your Uber driver gets you where you need to go in a fast and efficient manner. Uber also has a feature where you can “share” your ride information with others through a text message, so another person can track your ride as well. This is especially beneficial when you are traveling to a friend’s house, because they can track when you will arrive, what kind of car you are traveling in and who the driver is. It is like having a second set of eyes watching you. Watch for Uber’s “surge” pricing during rush hour or other popular times, however, which can make your ride more expensive.
Bottom line: ridesharing companies like Uber, Lyft and Sidecar are innovators in the technology industry. Ridesharing companies provide convenience and better availability than taxis. It is easier to catch a ride with a ridesharing company than it is to hail a cab. Passengers in ridesharing cars also only pay with their credit card via the application, which is beneficial since credit cards have become the most user-friendly method of payment. An additional safety plus, at least for me, is that ridesharing companies track everything with GPS technology using smartphones. The companies know the identity of the driver, the identity of the passenger and the location of the final destination, which is more than I can say for a traditional taxicab. Getting into a car with a stranger is more reassuring when multiple people have the ability to track your every movement.
Danielle Ardner is a second-year honors student at Valparaiso University Law School in Indiana. She has a BA in Political Science from Mercyhurst University, with a focus on Applied Politics. Danielle has a passion and perseverance for writing.
Suggested citation:: Danielle Ardner, Safety of Uber Questioned in Lawsuit Filed, JURIST – Student Commentary, Jan. 10, 2015, http://jurist.org/dateline/2014/12/danielle-ardner-uber-safety.php.
This article was prepared for publication by Yuxin Jiang, an Assistant Editor for JURIST Commentary service. Please direct any questions or comments to her at commentary@jurist.org
