East Bay taxi drivers join class action lawsuit against Uber
on March 4, 2015
California taxi divers face a new frustration: booming competition from companies like Uber and other app-based taxi companies that have recently entered the market with new services, systems and often better cars.
Standing close to his cab in a taxi garage, Ben Ezeokoli, a driver who works at the Oakland Airport, says he has been in business for nearly 30 years. Back when he started driving his taxi, the business was paying off—there were a lot of customers and few taxis. But now private cars are also joining the market.
“Sometime you see the cabs parked and waiting, but suddenly you see a private car comes by,” says Ezeokoli, 55. He used to think that these private cars had drivers there to pick their family members or friends. “But now you know these are Uber drivers,” he said.
By last fall, Business Insider was reporting that Uber was recruiting about 50,000 drivers a month nation-wide. And some of those new drivers work at the Oakland Airport, too. The Uber cars are newer than most taxis, and ride sometimes costs less, and you can get one within 3 to 5 minutes. That makes it hard for Ezeokoli and his peers — the traditional taxi drivers — to make a living.
Now, Ezeokoli has joined a class action lawsuit against Uber Technologies, Inc., accusing Uber of not following the regulations that taxi businesses in East Bay cities must follow. The suit represents at least 500 taxi drivers and owners in Oakland, Emeryville and Berkeley.
The taxi industry is highly regulated by both the state and cities, in order to protect consumers and taxi drivers. There are a limited number of medallions that are issued to taxi drivers, so that there can be fair competition among them, and so that taxi drivers are able to make a living wage.
To operate in the city of Oakland, Ezeokoli had to obtain a fleet management permit, a vehicle permit and an operating permit. According to the lawsuit, in Oakland, getting an operating permit also requires providing many other forms of paperwork, including proof of insurance, a business tax certificate, valid registration with the Department of Motor Vehicles, proof that a certified taximeter has been installed, and proof of the installation of working equipment such as two-way radio and brakes. The rates taxi drivers may charge are set by the city council via an ordinance.
The suit, which was filed in November, 2014, by the Oakland firm of Aiman-Smith & Marcy, accuses Uber of alleged unfair competition in violation of California’s Business and Professions Code, as well as of allegedly interfering with other taxi drivers’ business relationships with their passengers in a way that has resulted in economic damage to them.
Among the allegations, the lawsuit claims that: “Uber provides more cars, above and beyond the limited number of taxicabs permitted by the cities. Uber’s ‘lower cost of transportation” is made possible by Uber not paying any of the fees associated with taxicabs to the cities, by providing an abundance [of] cars so that each individual ride can be charged a lower rate, and by not complying with the meter requirements that taxicabs must follow by the cities’ codes.”
Further, the suit continues, “Uber’s business model cuts corners illegally and undermines critical safety provisions of the taxi laws in the cities and state of California. Its transportation system only succeeds because, unlike lawfully competing taxicabs, it prays [sic] parasitically on established taxi services without paying for them and without obeying the laws designed to protect taxi customers. Uber owns no cars, no permits, no radio associations, and employs no drivers—preferring to pay nothing for infrastructure and profit from the investment of permit owners and radio associations.”
“As a result of Defendant’s unlawful, unfair and fraudulent conduct,” the lawsuit contends, “Plaintiffs and the Plaintiffs class suffered injury in fact and lost money and property to which they were entitled and business expenses that drivers were required to pay.”
In other words, the suit argues, by allegedly violating the rules, Uber creates problems for traditional taxi drivers: They now have more competition, but still have to pay lots of money to obtain a number of permits, licenses and insurance policies. That means they are making less money overall.
“With Uber out there, some of the drivers say they have lost up to half of their fares,” says Hallie Von Rock, an attorney with Aiman-Smith & Marcy, the employment class action law firm that filed the suit for the taxi drivers. “They felt like they were doing everything that was required of them, then suddenly Uber comes in and basically is stealing their fares by not going through any of the same regulations.”
She estimated the lost potential revenue as up to $30,000 or $40,000 a year per taxi.
The lawsuit requests that the court order Uber to make financial restitution, order a permanent injunction to prohibit them from engaging in the practices the lawsuit alleges, and that Uber make compliance reports to the court to show that it is following the injunction.
The lawsuit is in the beginning stages, said Von Rock. The complaint has been filed and the firm intends to amend the complaint to more precisely state its allegations against Uber. “Uber will likely file a motion asking the court to dismiss the complaint before any discovery is done,” said Von Rock. “It’s a typical action that Uber does in most of the complaints that are filed against them,” she continued. “Not this time. We are going to stand and see this class action to the end.”
When asked for comment, Uber’s legal representatives referred questions to the Uber press office. The press office did not respond to multiple requests for interviews.
In an Oakland airport taxi parking lot, some taxi drivers are standing, chatting while waiting for their turn. Others are playing dominoes to pass the time. Like Ezeokoli, most of these taxi drivers have been in business for more that 20 years, and they are worried about their competition from Uber.
Some of the Uber drivers tell other taxi drivers, “You guys are wasting your time,” said Ezeokoli. They don’t have to pay all the fees that taxi drivers do, yet they make more than the drivers, he said. “So it’s not a fair competition,” Ezeokoli said. But he thinks that if the court rules that Uber must use the same regulations and the same rates as taxi drivers do, “I don’t think they will beat us,” he said.
“Well, we don’t have a choice right now,” said Nana Yow Osei Bansu, a taxi driver who is thinking about getting his own car. “If we can’t beat Uber, we all have to make a decision to join them.”
But Ezeokoli disagreed. The issue is that younger people and students are more “cost conscious,” he said, “and more into the technology.” What they don’t realize, Ezeokoli thinks, is that Uber prices go up and down according to rush hour and event pricing, while taxi fares remain constant.
Still, he has his loyal customers whom he trusts, and he thinks it’s all a matter of time before people realize cabs are the way to go. “I don’t think cabs are going to go away, no matter how high the competition is,” he said.
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East Bay taxi service is deplorable. They deserve to be put out of business by Uber and Lyft.
Between the horribly maintained cars, the rude drivers, and difficulty of calling to request one, they have no excuse. The last time I tried to take a taxi, eight drivers refused to take a credit card for a $30+ ride. I told them to suck it and had an Uber pick me up 2 minutes later.
That was the last time I ever used an East Bay taxi.
I second that.
We love the free market … except when our crappy and outmoded business models are pushed aside by something better, more reliable, more profitable, easier, and less expensive. Then we want the courts to do something about it.
Cry me a river. Bay Area taxis – maybe with the exception of DeSoto in San Francisco – are AWFUL. Rude, mean, not knowledgeable of the area, and they refuse to take people to certain neighborhoods. Lame.
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For the most part, the people taking Uber or Lyft are the white upper class with feelings of entitlement who are making money and could care less about any regulations or work ethic. They look down on cab drivers and are the same people who are making the Bay Area a horrible place to live with regard to expense.
This has got to be so frustrating for traditional taxi drivers like Ezeokoli who has years of experience driving a taxi. Hopefully states like California can create regulations that keep traditional taxi drivers in business, while still creating these new jobs by Uber. I do agree with Ezeokoli in the end, this is unfair business and it is monopolizing the taxi world.
iam sorry for the business loss …but seriously guys the cab drivers were taking advantage….ive been living in bay area for ten years …so many times i have been late to class because the taxi decides not to show up because.my college is only five minutes away ….also if i have called to go to work …first question i get asked is where you going if.the distance is two miles they never show up …they only want long distance jobs….i know it is hard for those drivers now …it is sad …but guys if u cant beat them just join them….
First of all, I felt sorry for the cab owners and drivers for losing customers, business and opportunity to grow. Instead of becoming a crying baby, these cab owners and drivers should start improving, first and foremost their customer service. Let me say this once and for all, MAJORITY of cab DRIVERS are rude people! Only a few dozen are respectful to their customers.
Also, MAJORITY of cab OWNERS are greedy! They keep emphasizing that they have been in the business for more than 20, 30 or even 50 years and yet in spite of hundreds of thousands of dollars or maybe even a million profit they DID NOTHING to improve their system. If ONLY these cab companies and owners invested a little bit of money, they should have been the one reaping the fruits of their labor. Key to progress is INVEST in Technology. These cab owners were blinded by the cost of their MEDALLION which sooner or later will not even worth a penny anymore.
Lastly, you CANNOT beat EVOLUTION because it’s part of the progress! Deal with it!
Taxi drivers you have yourselves to blame for your loss of money and business, I have had so many customers complain about taxi drivers such as taxi drivers being rude, stinky vehicle, being kicked out of the vehicle for giving directions to the driver for shorter route, drivers only wanting cash no credit card and even getting in customers face and cursing at them for not having enough cash, and taxi fares being too expensive. If you want to make more money and save money then Join Uber and Lyft, stop complaining and accept the fact that times change we are in the future where technogies are very advanced and new and improved businesses, so either make changes or quit.
I have to say I have been using a company called Yellow Sunshine Cab for a long time. The owner actually drives one of the cabs. She has always been so nice and provides great customer service for all customers.
I have been using Yellow Sunshine Cab Co. for a while. It is owned by a woman who actually drives her own cab. Her service is great and she is courteous and very knowledgeable. She is never rude and always on time. If more cabs were like her they would have more business.