Uber Lawsuits & Controversy
Uber is an extremely successful user-based “ride sharing” mobile application. The startup has risen meteorically over the past couple of years; the company could be worth as much as $50 billion. The growth of the “sharing economy” however, has not been drama-free. Uber faces a slew of controversies and lawsuits that place it in an interesting position in the American political landscape. The main thrust of the controversies associated with the company revolve around labor and regulatory concerns. It has become a hot-button topic that politicians are beginning to comment on, and the outcomes of these conflicts will likely have far-reaching consequences. Here is a brief rundown of some of the recent conflicts and controversies the company faces:
Uber vs. Taxi Drivers
Perhaps obviously, Uber has a fraught relationship with traditional taxi services. The convenience, comfort, and decreased fare have made Uber an alluring alternative to calling the iconic yellow taxi. This shift in taxi service consumption has dramatically affected traditional cab companies; San Francisco taxis, for example, experienced a nearly 65% drop in rides between 2012 and July 2014 (Uber was introduced to the city in October of 2012). Many taxi drivers have objected to Uber’s inauguration into their cities because they feel that Uber is exempt from many of the regulations affecting established companies, which allows them to skirt labor regulations and drive down prices.
Various cities have tried to limit Uber’s influence to protect taxi companies: Toronto cab drivers recently filed a $300 million (U.S. dollars) lawsuit against Uber to keep the service out of the city. Taxi-dense New York City recently backed down from a Mayor DeBlasio-supported initiative to reduce the amount of Ubers on the road.
Older, established taxi companies and newer services like Uber and Lyft have contributed money to government lobbyists to advocate their respective interests: the Los Angeles Times reports that since 2013, eight taxi companies have spent $595,500 in L.A., while Uber and Lyft have spent $392,000. Uber alone has spent upward of $200,000 so far in 2015.
Uber vs. Uber Drivers
The status of Uber employees has become another issue garnering a lot of attention. Uber drivers are currently classified as independent contractors. A lawsuit filed in San Francisco by three former employees hopes to change this. One of the key aims of the lawsuit, which was filed by three former Uber drivers in San Francisco, is to change the status of Uber drivers from independent contractors to employees. The plaintiffs argue that Uber should cover employee costs such as gas mileage and vehicle maintenance. Potentially, Uber would be required to pay fees like Social Security and unemployment. Uber’s development into a $50 billion company over the last six years has in part been due to the costs it has saved by hiring independent contractors. A representative for the plaintiffs told Time that Uber uses its status as a mobile application to dodge labor laws and regulations that have been in place for decades.
For its part, Uber struck back in an attempt to decrease the scale of the suit by filing a motion opposing the suit’s classification as a class action. In its filings, Uber challenged the legitimacy of the class suit, noting that its 160,000 California drivers potentially encompassed by the suit “have little or nothing in common.” In its filings, Uber noted that a different employment model would force the company (and others like it) to undergo massive structural readjustments. Furthermore, the flexibility currently afforded to drivers under the independent contractor model could become dramatically limited.
In its filings, Uber noted that a different employment model would force the company (and others like it) to undergo massive structural readjustments. Furthermore, the flexibility currently afforded to drivers under the independent contractor model could become dramatically limited– drivers could have set schedules and be limited from working for rival companies such as Lyft (which also faces a lawsuit next March).
Uber Vs. Cities it Serves
In addition to conflict with traditional taxi services, Uber has experienced difficulties with law enforcement in cities. The company recently settled a wrongful death lawsuit in San Francisco that involved a 6-year-old getting struck and killed by an Uber driver on New Year’s Eve.
A group of Uber drivers recently accused the Los Angeles Police Department of entrapment after they got caught giving rides to non-Uber users. The drivers allege that a woman flagged them down (on behalf of the LAPD) and they picked her up, thinking she could benefit from downloading the app (Uber drivers are forbidden from soliciting rides; all rides are requested through the app). One of the drivers felt that the woman may have needed help, and all decried the LAPD for the set-up and making them appear like criminals, despite their overall good ratings on the app.
Uber (along with its arch-rival, Lyft) have campaigned for airport access (traditional taxi hotspots), and it seemed that the companies made a breakthrough in Los Angeles; the companies were slated to be granted access to LAX this August. However, City Council voted to double down and reevaluate the decision, despite Mayor Garcetti’s support and consumer interest.
These are just some examples of problems and drama facing the mobile app, with a new Uber controversy making the news almost daily.