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San Francisco & LA Sue Uber

There’s more bad news for Uber. The company was sued yesterday in a joint action by San Francisco and Los Angeles. San Francisco is the online ride sharing company’s headquarters.

The lawsuit lists several areas in which the DAs for both cities claim the company acts illegally. For starters, it misleads its customers about the extent of background checks its drivers undergo, while charging UberX passengers a “Safe Rides Fee” of one dollar related to those checks. In addition, the suit claims the company’s rates are set without the required approval of state agencies and that it operates illegally at state airports while charging special airport fees that are not turned over to the airports.

At a press conference yesterday, San Francisco District Attorney George Gascon said that Uber claims to have an “industry-leading background check process,” which he said is far from the truth.

“At the end of the day, you cannot conduct the most comprehensive background check possible if the information you have obtained has nothing to do with the person that is signing on with you to be a driver,” he said. “It is completely worthless.”

In Los Angeles, at a separate press conference, LA District Attorney Jackie Lacey said the purpose of the lawsuit wasn’t to put Uber out of business but to force the company to comply with California law.

“Californians and California lawmakers all agree,” she said, “Uber is an integral, safe and established part of the transportation ecosystem in the Golden State.”

Originally the two prosecutors were going to also sue Lyft, another online ride service, but that suit was settled for $500 thousand, half of which will be waved if the service complies with all terms of the settlement. Among other things, Lyft has agreed to obtain permission from airports in advance of offering service to them. Currently, Lyft and Uber only have permits for San Francisco International Airport. Lyft has also agreed to quit making false claims about the background checks it makes on its drivers.

Although the lawsuit against Uber allows it to continue operating, a loss could be mighty expensive. District Attorney Gascon pointed out that the law allows fines of up to $2,500 for each violation and added “…there are tens of thousands of violations…” However, Uber is cash rich and thought to have a value of around $40 billion.

This is not the first bad news for Uber this week. On Monday, Portland, Oregon filed suit against the company and on Tuesday, courts in Thailand and Spain ordered the service shuttered in those cities. New Delhi, India also ordered the service shut down there, after allegations that a woman passenger was raped by an Uber driver. Officials in Portland say there is currently a sting operation in that city to catch and fine Uber drivers.

One Comment

  1. Lizbeth Lizbeth December 10, 2014

    at a loss at what this has to do with foss…

Comments are closed.

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