New Yorkers may soon be able to hail yellow cabs with their smartphones, depending on the outcome of a state appeals court case that’s expected to be decided this month.

The Bloomberg administration and app developers Uber Technologies Inc. and Hailo Network USA Inc. thought they had finally gotten an official go-ahead to launch apps that would let pedestrians flag down one of the city’s 13,000 yellow cabs with the tap of a smartphone screen.

But after a judge gave the companies a greenlight, a coalition of livery and black car companies appealed the decision and persuaded an appellate court to put the launch on hold. A decision on the appeal is expected May 20.

The crux of their legal argument centers on whether the city regulators overstepped their authority in accommodating smartphone users.

The attorney for the livery companies, Randy Mastro, a former deputy mayor, argued in an appeals brief that the city’s taxi commission had overstepped its mandate by issuing rules to permit e-hailing apps as part of a pilot program. The new app rules are a “sweeping change” that should have been made by the City Council, not by a regulatory body like the Taxi and Limousine Commission, Mr. Mastro argued.

Mr. Mastro contends that the app rules violate the city’s administrative code, because a cab driver using an e-hail app would be able to choose to decline a fare. Under current rules, cabbies picking up customers who hail them from the street are generally not permitted to refuse rides to their customers.

TLC officials and the city Law Department, who represents the city in legal matters, say that the TLC followed all applicable laws in launching the e-hailing pilot program, and that they expect to win on appeal. Even so, the city argues that it can authorize a trial run even if the apps run up against some existing rules.

Hailo CEO Jay Bregman, in a bid to overturn the latest court order temporarily blocking the apps, argued that the technology is simply improving upon the arm flail or the doorman’s whistle.


Source: blogs.wsj.com

Smartphone apps that can hail a cab finally started operating this week in New York Citywith the blessing of the Taxi and Limousine Commission (TLC). However, an appellate judge has issued a last-minute emergency injunction, in response to a lawsuit from players in the taxi and livery industry that challenges the apps' legality.

THE FINAL DECISION IS SCHEDULED FOR MAY 20TH

The lawsuit challenged the TLC pilot program under which the apps were being introduced. It was dismissed by a lower court judge last week, but the petitioners appealed. The injunction will give appellate judges time to review the ruling from the Manhattan Supreme Court.

"This faux ‘pilot program’ is so fundamentally flawed and illegal in so many respects that it had to be stopped," Randy Mastro, the attorney for the petitioners, told Bloomberg in an email. "And now it once again has been."

"We're disappointed that there is a further delay in implementing the e-hail pilot program," Michelle Goldberg-Cahn, a city lawyer working on the case, said in a statement. "It's unfortunate that taxi riders will not be able to continue to test this innovative tool for hailing taxis."

The motion is scheduled to be submitted to the appellate panel on May 13th with a decision to be issued on May 20th. Uber and Hailo, the two companies that have received licenses from the TLC, did not immediately respond to a request for comment.

Source: theverge.com

NEW YORK — The city can experiment with letting taxi seekers hail rides electronically, a judge said Tuesday in a ruling that could clear the way for riders to summon the city's signature yellow taxis with smartphone apps instead of raised arms.

While the cabs have been prohibited in the past from taking pre-arranged rides, testing an "e-hail" system is OK to see whether it leads to a dearth of cabs or other problems, Manhattan state Supreme Court Justice Carol Huff wrote in dismissing a lawsuit filed mainly by livery cab owners.

The judge also lifted an order that had temporarily blocked the program, but it wasn't immediately clear how soon virtual hailing might begin.

Taxi and Limousine Commissioner David Yassky saluted the decision as a victory that expands riders' choices.

"The market will ultimately decide which apps rise or fall, and we have an obligation to give the riding public that choice," he said in a statement.

A lawyer for the livery cab owners, Randy Mastro, said they were considering an appeal.

"This decision is so fundamentally wrong in so many respects," Mastro said by phone, declining to elaborate.

The Taxi and Limousine Commission agreed in December to test the idea for a year, saying the city couldn't ignore evolving taxi technology. E-hail systems are in use in some other cities, and at least a dozen companies said they were ready to provide the service in New York.

One of them, Uber, applauded the court decision as a win for a city seeking to cultivate a technology-friendly reputation.

"You can't stop progress when the people want it enough," CEO Travis Kalanick said in a statement.

Using an app, a potential passenger requests a ride, all participating cabbies within a certain distance get the inquiry and the driver who responds first gets the fare.

Car service owners said it unfairly blurred a legal line between yellow and livery cabs, which are barred from picking up passengers on streets and so depend on prearranged rides.

The livery cab owners - and a senior citizen who doesn't own a smartphone - also envision in the suit that e-hailing will leave people standing on street corners while cabbies zip by to pick up app-arranged fares, potentially reviving concerns about discrimination against passengers based on their race, whereabouts or destination. Those concerns led years ago to measures that barred drivers from taking fares via radio dispatch and from refusing any passenger without "justifiable grounds."

The judge, however, said the e-hail plan might actually combat any discrimination, since drivers wouldn't be able to see their fares when accepting them. She didn't address whether cabbies might shun some neighborhoods to take e-hail requests elsewhere but noted the test program could examine discrimination.

She suggested the electronic system could help, rather than harm, older people by "reducing time spent standing or walking" to find a cab. She also rejected other claims, including an argument that the program was too broad to qualify as a test.

The city's chief lawyer, Michael Cardozo, said the ruling confirms the city's position that the program is entirely proper.

Meanwhile, the state's highest court, the Court of Appeals, was poised to hear arguments Wednesday over a nearly opposite initiative: a plan to let livery cabs pick up passengers on streets in upper Manhattan and the city's four other boroughs.

In that case, yellow cab owners sued. They said the plan would hurt their business. Mayor Michael Bloomberg has countered that it would make travel safer, easier and cheaper for millions of people.

The outcome could have a major impact on the city's budget, as the disputed measure is coupled with a proposal to sell 2,000 new yellow-cab permits, or medallions. Officials have estimated that could make the city more than $1.4 billion over several years.


Source: wsj.com

In 1984, the Federal Trade Commission released a report that explained why taxis could charge customers exorbitant prices for dismal service. The simple reason, according to the 176-page study: lack of competition in the market. The culprit: local governments. City agencies that regulate cabs, generally called taxi commissions, were deliberately protecting from competition the very companies they were supposed to police. With no legitimate safety- or health-related reasons for doing so, the taxi commissions artificially limited the number of cab companies competing on the streets by restricting the number of available licenses. Armed with this report, the FTC took action. It made an example of two of the worst markets, Minneapolis and New Orleans, by filing lawsuits against the local governments and accusing them of illegally colluding with private taxi companies to crush competition and fleece residents. (The results of those lawsuits were mixed—more on that in a minute.)

In 2007, two decades after those cases settled, the FTC noted that the taxi industry remained largely uncompetitive. The FTC staff also observed, however, that “telecommunications advances” might help to disrupt these uncompetitive markets.

Today, this predicted disruption might finally be on the horizon, exemplified by companies like Uber, SideCar, and Lyft that all created mobile apps to revolutionize the ride-for-hire market. But, as before, city taxi commissions are working to stifle competition.

Most recently, Las Vegas, Washington, Chicago, and Cambridge, Mass., have all tried  to ban Uber, the San Francisco-based startup that connects riders to luxury black town cars and SUVs on the fly. Other cities’ ordinances are hopelessly stacked against the company. Miami’s requires impossibly expensive minimum fares ($80), while Cambridge attempted to shutdown Uber altogether, claiming that since a national standards and measurements body had not certified the company’s use of GPS technology for taxi metering, Uber was violating the law. (Cambridge relented the following day.) New York City, which last year declared Uber illegal, is now cautiously experimenting with the company but has not fully committed to allowing it to compete.

Younger companies like Lyft and SideCar disrupt transportation in a different way: Anyone with a car and background check can provide rides to a willing rider for a suggested fee. These companies have faced their own issues. SideCar planned to offer rides during SXSW, the annual technology festival in Austin that helped launch Twitter and Foursquare into public consciousness years ago. But the city of Austin threatened to shut SideCar down and arrest willing drivers during the festival. SideCar responded by offering free rides and then filed a lawsuit against the city of Austin, arguing that their business does not violate Austin’s Transportation Code.

Uber, SideCar, and Lyft are not simply a fad—they are the first indications of a transportation revolution now receiving considerable venture investment. So far, these companies have battled incumbent taxi companies city-by-city, facing off against city taxi commissions that are biased against them. But the harms they’ve suffered will only continue to grow, necessitating a decisive solution, and one from a forum that isn’t effectively controlled by the taxi industry. Three potential avenues are at our disposal: the FTC, state governments, or Congress. And they should be explored in that order.

It might seem odd to call for a federal agency like the FTC to take action in what appears to be a purely local issue. But not only does the FTC have the authority to take these cities to impartial federal courts and end their anticompetitive actions; it also has deep expertise in taxi markets and antitrust doctrines. By law, the FTC’s power to regulate “interstate commerce” is just as broad as Congress’, and that power is famously far-reaching, even covering the growing of plants at home for purely personal use. Here, as the agency noted in its 1984 cases against Minneapolis and New Orleans, the FTC could regulate local taxi markets merely because interstate travelers take taxis (and Ubers) to and from the airport when they fly across state lines. Moreover, Uber, SideCar, and Lyft are California-based technology companies competing in multiple states.

The FTC’s general antitrust authority, however, only sometimes outranks city authority. Under the Constitution, federal law trumps both state and city law. But antitrust law allows states some exceptional leeway to adopt anticompetitive business regulations, out of respect for states’ rights to regulate business. This federal respect for states’ rights does not extend to cities—they are subject to the antitrust laws unless states pass legislation absolving them. For example, Minneapolis ended up avoiding the 1984 lawsuit by acceding to the FTC and permitting more competition. New Orleans did something different: It succeeded in lobbying the state of Louisiana to authorize its anticompetitive actions, to the detriment of consumers.

Some states, including Florida, Nevada, and Texas, could argue that like Louisiana, their laws currently authorize the city governments to undermine competition in their taxi markets. Nonetheless, the FTC should test the law in these states with litigation, as the Supreme Court’s position is unsettled. Under the few Supreme Court decisions spanning the past several decades, cities can engage in anticompetitive acts only when the state legislature “clearly articulated” and “affirmatively expressed” a state policy to displace competition and replace it with an uncompetitive market. To complicate matters, the court “disfavors” interpretations of state law that permit anticompetitive city regulation, yet it still permits city anticompetitive action even it is merely a “foreseeable result” of the state law. Put all this together and the FTC can likely argue that state taxi authorizations do not foresee anticompetitive restrictions on apps like Uber and services that permit average citizens to tip one another for a ride. At the very least, Washington, D.C., is not in a state, so no state law can protect it from the FTC’s antitrust powers.

But if the FTC was unable to secure a court victory against a particular state, that state’s government could intervene. States are probably not as beholden to the taxicab industry as are local taxi commissions. Their legislatures or agencies could easily either pull back any specific authority they’ve granted to city governments, or clarify that those powers are not so broad as to block communications technologies that connect users to black car drivers or to one another. Indeed, states might feel pressure to do so, lest they appear either supportive of anticompetitive policies in their cities or powerless to change those policies.

Should the FTC or states not rise to the task, Congress can preempt all of the problematic state and city statutes by passing a one-sentence law. There is precedent for such action. For example, with respect to mobile phones, Congress declared in 1996 that “no State or local government shall have any authority to regulate the entry of or the rates charged by any” mobile phone company. The same can and should apply to taxicab services. This solution should be politically feasible: Both Republicans and Democrats can agree that more choices and lower prices in transportation would benefit consumers. Democrats would consider it “smart government” and Republicans “limited government.”

While taxi companies might prefer not to face competition, they deserve no more protection from it than did horse-and-buggy salesmen in 1905 or MySpace in 2005. Like Uber, Sidecar, and Lyft, they deserve no more and no less than a fair shot in a competitive market. The FTC, states, or Congress itself should step in to make that possible, lest city governments run competitors off the road.

Source: slate.com

Silicon Valley thinks taxi apps will be the next megabrands

Naval Ravikant is the cofounder of the startup network AngelList and a small investor in Uber, the app that lets you order a car service or taxi from your phone. He uses Uber X to get to work, Flywheel for long trips to the outer part of San Francisco, Lyft for short hops, and Uber Black for groups and special occasions. He’s selling his cars, he told The Verge.

Each of these companies has a slightly different take, and not all will survive. But these apps could double or triple the size of the market for taxi and car services, Ravikant estimates. He did the math and found that between gas, garages, insurance, and the cost of the car, he could actually save money by using a combination of the smorgasbord of taxi apps available in San Francisco — and he can sit in the back seat on his phone instead of having to drive.

Taxi apps have become the hottest thing in tech. You may not have noticed it unless you live in the Bay area or immerse yourself in industry news, but there is an extraordinary momentum around apps for ordering rides. "It is literally the hot topic among investors and entrepreneurs," Ravikant said.

But taxi apps are doing more than making investors’ lives easier. They’re also creating the first on-demand, person-to-person commerce platform, as well as laying the groundwork for real-time delivery.

The gold rush

Hailo just raised $30 million from investors, bringing its total funding to around $50 million. Uber, the most well-known taxi app, just started signing up ordinary citizens so they can use their cars as cabs. A Danish company called Click A Taxi announced today that it is launching globally all at once, claiming to cover a billion people. "Our promise is that we aim to get a taxi wherever the user is," cofounder Nikolaj Køster said in an email. "if you're chilling in Puerto Banus in the south of Spain and pull out the app and click — you will be picked up."

For founders and investors who didn’t get in on the taxi app craze in time, there’s a secondary genre: Uber for groceries, Uber for wine, Uber for dog walking, Uber for car washes (defunct), and so on. The last company that shook an industry this profoundly was travel rental service Airbnb, but the Uber model is poised to be even bigger — or at least, that’s what investors tell us.

Why taxis?

Silicon Valley has the tendency to gang up on any new idea that seems good, but the heat around taxi apps seems... uncalled for, especially considering that it’s not a particularly easy business to go into. The industry is heavily regulated, which has caused obstacles, and it’s a shrinking business. According to the research firm IBIS World, the taxi and car industry was growing at four to five percent before the recession, but has been shrinking by one percent every year since.

"The transit market is the last bastion of really hardcore inefficiency in the modern world," said Jay Bregman, cofounder of Hailo, which found in a survey that drivers spend 40 to 60 percent of their shifts with empty cabs. "These are unbelievably large markets that have massive 50 perceThat inefficiency — drivers cruising for passengers, and riders looking for cabs — is basically money left on the table. Hailo has brought in more than $100 million in revenue in just over a year, Bregman said. Investors believe Uber will be a one billion or even five billion dollar company.
"The industry is absolutely very large and very sexy," said Matthew Kochman, an early employee at Uber who left to do consulting and entrepreneurship. "They’re actual businesses, unlike some other things like consumer-facing social apps like Instagram that are sexy for the weird reasons that I don’t personally understand."

Taxi apps can also scale quickly by converting the existing network of dispatchers and drivers, which is why the companies are racing to new cities around the globe.

New life for an old industry

The taxi and car service industry, at least in the US, is pretty analog. Drivers are still struggling to adopt a widely available device that would seem to be the most obvious thing a taxi driver could do to improve his or her life. "GPS," said Lauren Setar, transportation industry analyst at research firm IBIS World, when asked about technology trends in the industry. "More and more taxi drivers are using it."

The way Uber and most of its competitors work is by giving drivers phones that serve as a dispatcher and a GPS, alerting the driver when a passenger needs a ride and automatically guiding the way. The passenger has downloaded the app and already inputted his or her credit card information, so there is no need to take out their wallet. At the end of the transaction, either one or both parties can leave each other reviews.

While the industry may be suffering here, it is still a huge market. The taxi and car service industry in the US is estimated at $5 billion in annual revenue. Tokyo’s alone is around $25 billion. Apps also present possibilities beyond mere transit, including selling things in the cab, location-based advertising, and coordinating other person-to-person transactions in real-time.

Down the road
But there’s something else going on here. Taxi apps give us a glimpse of a future in which everything is real-time — imagine attaching a moving dot on a map to every pizza delivery driver and FedEx package.

Uber and its ilk also achieved a level of mobile immediacy that other startups have been trying desperately to capture — consider all the failed real-time Craigslist ripoffs that failed to take off. There are only two examples of success with matching people together for a real life transaction in real time: taxi apps, and Grindr, the hookup app for gay men. Only one of those (we hope) involves cash.

If you believe people like Bregman, taxi apps are the foundation for a revolution in convenience. Car ownership becomes passé, and you’ll be able to buy anything on your phone and watch it travel to you in real time.

In this scenario, taxi apps are poised to become the next titans of industry simply because they have your credit card information on your phone. Right now, it’s a land grab for cities as the companies spend millions to sign up drivers and advertise the service. But eventually the arms race will die down and a winner will emerge in each market, and then the startups can expand to mobile commerce and other tangential businesses.

Hailo will eventually be "more like Virgin than Virgin America," Bregman said, referring to the megabrand that started with a record shop and now spans everything from telecom to space travel. (Richard Branson, Virgin's founder, is an investor in Hailo.) "I don’t know where this is going to go and how far this is going to go," he continued. "But everyone knows that this is the future."

Source: theverge.com

Les New Yorkais arrivent enfin au 21e siècle : il leur sera désormais possible de commander un taxi grâce à leur téléphone intelligent.

Jusqu'à présent, le règlement mentionnait que les 13 000 taxis jaunes de la métropole américaine ne devaient accepter que les courses hélées dans la rue. Il était impossible de demander un taxi à distance.

La commission des taxis et limousines de New York a accepté d'ouvrir la voie à des applications permettant de commander des taxis dès la mi-février. Pour une période d'essai d'un an, les utilisateurs de téléphones pourront joindre une voiture située dans un périmètre de 800 mètres s'ils se trouvent dans un quartier au sud de Central Park ou de moins de 2 kilomètres et demi s'ils se trouvent ailleurs dans la ville.

Le site Internet des taxis de New York (yellowcabnyc.com) offre déjà un lien pour télécharger une application.

Les chauffeurs de taxi s'attendent également à augmenter leurs revenus grâce à cette nouvelle mesure, puisqu'ils perdront moins de temps à chercher des clients.

City officials say a company offering a smartphone app to hail taxis and limousines in Toronto is operating illegally.

The city has charged Uber with 25 municipal licencing offences, including operation of an unlicensed taxi brokerage and unlicensed limo service, since they began operating in Toronto in late summer.

The company doesn’t have its own fleet. Uber gives the smartphone, as well as the dashboard cradle it sits in, free to cab drivers from other companies who sign up.

But the company needs a licence to dispatch, says Richard Mucha, acting manager of licensing enforcement for the city.

“If you plan on running a limousine service in the City of Toronto, or a taxi cab brokerage, then you require a licence,” says Mucha. “We met with Uber’s CEO Travis Kalanick in the spring of this year and we advised him in no uncertain terms that they were not operating in accordance with the City of Toronto’s licensing bylaw. So our position should come as no surprise to Uber.”

Uber did not respond to requests for comment.

None of the charges have been dealt with in court.

Penalties range from $150 to $250 for each individual charge, but cumulatively, could go as high as $25,000. “The more convictions that are rendered, certainly the higher the fines,” says Mucha.

The Justice of the Peace who will hear the case could also stop the company from operating by issuing a prohibition order. If that doesn’t happen, the city could go to Superior Court to ask for an injunction.

Application fees for a taxi cab brokerage license are just under $370, but Mucha says Uber has never applied for one.

The company has encountered similar opposition in U.S. cities and is facing fines and lawsuits.

The company’s website says passengers are charged a 20 per cent gratuity above the metred fare. One Toronto cab driver said Uber takes a portion of that money.

That, too, is a violation, Mucha says.

“If you’re charging anything other than the meter rate then that is contrary to the city’s licensing bylaw.”

The cab driver enters the metered fare into his phone and the application automatically adds the premium. The amount is charged to a passenger’s credit card, which they provide when they download the app.

An unlicensed driver using the app has already been charged and convicted, says Mucha. As of Wednesday, Uber was still operating in Toronto.

The taxi industry has experienced a bit of a shakeup with the onset of the applications.

Hailo, which has an office at Queen St. near Sherbourne St., offers a similar app, but the company has escaped regulatory censure in Toronto because it is a licensed taxi brokerage and works with licensed drivers.

And it charges the driver to use the service, not the passenger.

Since Hailo launched in September, 30,000 passengers have downloaded the app, says company president Justin Raymond. And 600 cabbies are using the driver app.

But Hailo has experienced resistance from established operators such as Beck. Some cab drivers for the company say they’ve been pressured not to use the app. The city is currently investigating complaints against the cab brokerage, although Mucha wouldn’t specify what they were.

Toronto is reviewing its licensing bylaws with regards to taxi cabs and the apps will figure in the debate.

“Certainly we’re not against technology,” says Mucha. But “there would be some opposition to having anything charged beyond the metered rate from an issue of transparency.”

Uber and the city will be in court Jan. 30 when a trial date will be set.

WASHINGTON — Summoning a taxi or car service with your smartphone feels like the future. City governments around the world can agree on that. But many are proposing rules that would run Uber, one of the most prominent ride-requesting apps, off the road.

At a recent conference, regulators and car services from the United States and Europe talked about how smartphone apps are changing the hire-a-car business. Some are integrated with car companies’ dispatching systems, while others allow drivers to directly connect with passengers, phone to phone.

While regulators discussed ways to clarify the legality of the apps, they also proposed guidelines that would effectively force Uber, a San Francisco start-up, to cease operations in the United States. Uber also faces lawsuits filed by San Francisco cabdrivers and a Chicago car service and a $20,000 fine in California.

The battle underscores the tension between lawmakers and technology companies as websites and mobile apps outmaneuver old rules. Services like Uber, Airbnb, and Craigslist can cut out the middlemen and lead to more efficient markets. But regulators say they could put consumers at risk.

Uber has an unusual approach. It first consults a lawyer in a target city on whether it is legal to operate there. It contacts local car service companies to discuss working with them; in cities where Uber works with cabs, employees put up fliers or approach drivers. Participating drivers get free ­iPhones that run Uber’s navigation software, which helps them find people nearby who are requesting rides via smartphone.

The start-up, which has raised $50 million since 2010, generally does not consult regulators. It says it’s not an actual provider of rides and isn’t subject to such regulation. To date, this has generally worked for it in 18 cities, including San Francisco, Washington, New York, Chicago, Paris, and Amsterdam.

Uber suffered its first serious setback in New York, where it was forced to cease its fledgling yellow cab operation in October because of what the city said were exclusive contracts with payment processors. But the company continues to work with luxury sedan companies and drivers there.

Matthew W. Daus, former chairman of New York’s taxi commission and president of the International Association of Transportation Regulators, is a vocal critic. With support of 15 city governments that formed a task force called the Smartphone Apps Committee, he wrote guidelines for laws that, if passed by the cities, would outlaw Uber’s operations. Daus said Uber is a ‘‘rogue’’ app and that the company behaves in an unauthorized and destructive way. He pointed to Uber’s doubling of fares in New York after Hurricane Sandy. The company calls it surge pricing, a move the start-up said was necessary to get more drivers on storm-ravaged roads.

‘‘New Yorkers deserve an apology from Uber for price-gouging them,’’ Daus said.

There are dozens of other car-summoning apps. Lyft, from Zimride, allows ordinary citizens to give rides to others in their own cars in return for ‘‘donations.’’ SideCar offers a similar service. Like Uber, these companies are facing a $20,000 fine by the California Public Utilities Commission for operating without a license.

But Uber is generally adored by customers, who say they’ll pay extra to summon a ride without much wait, especially where cabs are scarce. In ­Apple’s App Store, Uber has hundreds of five-star ratings.

Cofounder Travis Kalanick, 36, frames it as David vs. Goliath, a start-up revolutionizing a creaky business. He once referred to Cambridge, Mass., as ‘‘home to Harvard, MIT, and some of the most anticompetitive, corrupt transportation laws in the country.’’ To him, regulators are trying to stifle innovation. He says they are more interested in protecting the taxi and limousine businesses than in helping consumers.

Regardless of the motivations of taxi companies and governments, their actions stand in the way of innovation, said Daniel Sperling, a professor at the University of California Davis who directs its Institute of Transportation Studies.

‘‘Transportation has been one of the least innovative sectors in our society,’’ he said. ‘‘When I look at these new mobility companies coming, where they’re using information and communication technology at a very high level, it’s long overdue and should be embraced.’’

Source: bostonglobe.com

ontinuing with Uber’s recent legal woes, Attorney Gary Oswald, who represents San Francisco cab drivers, has filed a class-action lawsuit against the transportation startup due to unfair business competition and for violating California Statutory and city regulatory mandates. This news is especially troubling, as Uber is now facing legal trouble on its home turf. According to Oswald:

Uber is brazenly violating this statutory scheme without even bothering to offer a pretext for their overtly illegal actions just as they have in New York City, Chicago and elsewhere.  By ignoring the law, Uber is putting at risk the livelihoods of hardworking men and women who drive safely and follow the rules.

Behind the lawsuit The basis of this lawsuit is that Uber’s drivers aren’t licensed as a limousine service or a taxi company. Oswald claims that by partnering with “unauthorized and unpermitted drivers” enables it to “unlawfully compete and take fares from law-abiding taxicab drivers.” It alleges that Uber acted to cover up its true nature in order to avoid all regulation governing taxicab companies and is apparently “intentionally interfering with the drivers’ relationship with the public through their illegal acts.”

Also at the center of this lawsuit is the unauthorized rates and what Oswald and the plaintiffs claim are illegal metering devices. According to the complaint, because consumers cannot pay by cash, this is in violation of San Francisco code. Furthermore, because the fares are measured through the Uber app, which “utilizes GPS enabled iphones [sic] in Black Cars or gypsy cars to determine distance and fares”, it violates SF code because the GPS devices are illegal meters for taxi service. This is the same argument that the company faced when Massachusetts regulators ordered it to cease and desist.

The company is already facing an investigation by the California Public Utilities Commission and the San Francisco Municipal Transportation Agency over its operations and have been issued cease-and-desist orders.

In San Francisco, riders can choose to get picked up through one of the service’s many options, including its traditional black car service, an SUV, by a hybrid (UberX), or even through Uber Taxi — which interestingly enough, is not a private cab, but rather a normal one that just so happens to use the Uber platform.

How does the lawsuit define a taxi company? So why does Oswald and the plaintiffs think Uber is a “taxicab company”? According to the complaint, because Uber receives requests for taxi service from a customer, transmits (dispatches) the request for cab service to an independent partner in a Black Car that has entered into a service and revenue agreement with the company, and that the driver renders transportation services, that makes it a cab service.

The lawsuit says that the plaintiffs have “suffered unproductive taxi lease expenses, increased taxi fuel expenditures, and other related out-of-pocket costs” as a result of Uber. They are seeking to stop the company from operating in the city as well as an undisclosed award of damages.

Uber’s been here before Uber isn’t a stranger when it comes to legal challenges to its service. From the infamous Uber Amendment being considered in Washington, DC to facing hostile crowds in Boston, Chicago, and in New York, the company has still remained focused on what founder, Travis Kalanick, says is industry corruption and that the company would continue to fight the good fight.

During his talk at Y Combinator’s Startup School last month, Kalanick said that he’s focused on building an “urban logistics fabric” and that the older the industry being disrupted, the more it is protected by government or corruption, or both.

So far, the company has raised nearly $50 million in funding from many of the tech industry’s prominent investors, including First Round Capital, Lowercase Capital, Jason Calacanis, Mashery’s Oren Michels, Shawn Fanning, Naval Ravikant, Benchmark Capital, Amazon’s Jeff Bezos, Goldman Sachs, CrunchFund, Gary Vaynerchuk, and Menlo Ventures.

This complaint was filed earlier this month in the Superior Court of California in San Francisco and is Case Action number CGC-12-526017.

Source: thenextweb.com

In Washington, D.C., the taxi commission recently proposed new rules that would block Uber’s sedan business and the company was forced to shut down a trial taxi service in New York City in October.

In Toronto, the city’s Municipal Licensing and Standards division has investigated Uber — which arranges rides for its clients through a mobile app installed on both customer and driver smartphones — for failing to register as either a limousine or taxi brokerage.

Andrew Macdonald, general manager of Uber’s Toronto office, maintains that the company offers a technology service not covered by current bylaws.

“We’re in ongoing discussions with the city. I don’t think anyone wants to see this play out in the courts,” he said. “Our view is that we’re bringing a technology to the table, engaging and partnering with drivers who are already licensed for business in the City of Toronto.”

The city doesn’t share his view. In August it laid charges against Uber for breaches of the Municipal Code related to its failure to get a limousine brokerage licence. The case is due back in court in January.

Bruce Robertson, director of licensing for the City of Toronto, said his department is still investigating Uber’s taxi service, which launched in September and will take enforcement action related to that business as well.

“The city’s position is simply it’s just a different way of people contacting a service. So a licence is required, because they’re arranging service between the public and somebody,” Mr. Robertson said.

Clashes pitting entrepreneurs touting new technology against regulators and traditional taxi and limousine fleets are not unprecedented in the transportation world, said Joshua Gans, chair of technical innovation and entrepreneurship at the Rotman School of Management.

“You can go back all the way to the introduction of the automobile and we had similar issues way back then. All manner of people tried to put restrictions on cars,” he said. “This happens time and time again. It’s very hard to change these sorts of industries.”

“Uber have taken this view that they can’t just apply to the regulatory offices and say, ‘Can you change decades of protection of the taxicab industry?’ ” Mr. Gans said.

“Their strategy has been instead to basically enter, do stuff that looks like it’s within the letter of the law — although there might be some ambiguity — and the consumers will love it and so when the inevitable backlash comes from the taxi lobby, the politicians will listen because the consumers really want it.”

Other technology developers have taken a more conciliatory approach with both the taxi industry and the city.

Toronto-based Winston Inc. first tried to compete with a cab-hailing app of its own before deciding to use its technology to build “white-label” apps for existing taxi fleets, landing Toronto’s Diamond Taxicab Association Ltd. as its first major client.

Co-founder and chief executive Aidan Nulman said part of the reason for the switch was that he felt the new services weren’t improving things for the drivers, who pay a fee to Uber or other app companies used to get fares.

“You’re replacing part of the infrastructure with something that’s only marginally better,” he said.

U.K.-based Hailo Network Holdings Ltd. meanwhile, was the first app-based company to get a taxi brokerage licence in Toronto.

But it has come into conflict with established taxi brokerage Beck Taxi, which Hailo Network Canada Inc. president Justin Raymond alleges has been instructing drivers of Beck branded cabs not to use the app, a complaint he has brought to the city.

Kristine Hubbard is operations manager at Beck, which works with 3,500 drivers in 1,700 cars branded with its orange and green colours.

Asked whether she would demand Beck drivers not use Hailo, she said, “I think I would pose it as a question: ‘Are you making more money? Is this something that’s in your best interest?’”

“The allegation that we’ve been threatening or bullying is just so opposite of the truth.”

The city is investigating Hailo’s complaints about specific incidents but Mr. Robertson said, “We have not determined that there’s been any violation of a bylaw. Until we do, we won’t take action.”

He added that the bylaw is silent on the issue of drivers working for more than one brokerage.

Beck itself is embracing technology, with an in-house iPhone app it launched in May, allowing users to hail a taxi to their location using the GPS in their phone. Unlike Uber and Hailo, the calls go through Beck’s existing dispatch system in the order they are received and not to a driver’s smartphone.

“I’m not afraid of competition; I encourage competition,” Ms. Hubbard said. “No one wants to be the only game in town.”

Mr. Gans said Uber in particular is putting the issue of technology in the taxi and limousine industry on the agenda and “really pushing that.”

“The problem for Uber is that it’s also pushing that for any of its follower competitors as well,” he said. “But Uber are betting on the fact that they will be first, they will be known for what they’ve done and so they will have a better position in the market as a result.”

Neither Uber nor Hailo will share their user figures, but both say customer reception has been good, while Ms. Hubbard said 30,000 users have downloaded Beck’s app and the brokerage gets 800 orders a day on average.

As the jockeying for space on the home screen of every Torontonian’s smartphone continues, Mr. Robertson noted that none of the complaints the city has received have been from the public. Rather, they have all come from licensed participants with a stake in the industry.

“It’s a new way to obtain service but it’s still only a slice of the world out there that uses cabs that uses these apps,” he said.

Source: financialpost.com