Taxi firms sue Uber for false advertising

Nineteen taxi companies sued Uber Technologies Inc. in federal court in San Francisco Wednesday, accusing the transportation network company of false advertising when it claims it has “the safest rides on the road.”

The lawsuit alleges San Francisco-based Uber’s website and blog advertisements are false and misleading because its driver background checks and training are less rigorous than those of taxi companies.

The claims in the federal lawsuit are similar to those in a state court case filed against Uber in San Francisco Superior Court in December by district attorneys George Gascon of San Francisco and Jackie Lacey of Los Angeles County on behalf of the people of California. But while the district attorneys’ suit emphasizes alleged harm to the public, the new lawsuit cites harm to taxi companies.

The lawsuit contends the alleged false advertising has cost taxi companies lost profits, lost drivers, decreased value of shares, reduced number of cabs in service and “significant reputational harm.”

It alleges:

“Uber’s false and misleading advertisements convince customers that UberX offers a safer ride than plaintiffs’ taxi cabs. Accordingly, as a result of these representations, customers opt for taking UberX rides instead of taxi cab rides with plaintiffs.”

The lawsuit claims Uber’s background checks of drivers are less rigorous than taxi companies’ because they don’t track crimes committed after an initial background check. Uber also doesn’t require drivers to take a safety training course or a written examination, unlike taxi companies, according to the lawsuit.

The lawsuit claims Uber is violating the federal Lanham Act, which bars false advertising, and California’s False Advertising Law and Unfair Competition Law. It seeks an injunction again Uber and financial compensation for the taxi companies.

The plaintiff companies include San Francisco-based Royal Taxi and Citywide Dispatch and 17 other firms based in Southern California. Uber spokeswoman Eva Behrend said in a statement:

“This frivolous lawsuit is simply without merit. “As riders across the country know, Uber’s multilayered driver screening includes county, federal and multistate checks, and the rating system and traceability of the Uber platform gives riders and drivers unprecedented transparency. … This lawsuit was filed by an industry that for decades has ignored the safety of riders and drivers.”