SAN FRANCISCO (CN) – At a Thursday hearing to determine whether California regulators gave an unfair advantage to Uber and Lyft over traditional taxi companies, a federal judge struggled to embrace the idea that cab drivers are an oppressed minority comparable to protected groups like gay and lesbian people.
“In economic regulation groups are favored all the time,” U.S. District Judge Edward Chen said. “It’s always about favoring one over the other. Animus is the purpose of harming a group, not favoring a group.”
Shannon Seibert, who represents Desoto Cab Company, now called Flywheel Taxi, was trying to argue that the California Public Utilities Commission showed animus toward traditional taxi companies by allowing ride-hailing upstart apps like Uber and Lyft to skirt the rules and regulations required of taxis by the city of San Francisco, even as they operated like traditional cab companies by picking people up curbside.
But Chen said favoritism toward Uber and Lyft does not equal the sort of hostility toward taxi drivers that would trigger heightened equal-protection scrutiny.
“The doctrine of animus is to pick out an unpopular group or target them for no other basis than the sake of bare harm,” Chen told Seibert, asking her to name one case of inverse animus. He then answered his own question.
“There is no such case. It’s about prejudice against hippies, gay people and lesbians, to harm them. It’s about undocumented students in Texas. It’s about mentally retarded people, trying to harm them,” Chen said.
With a nervous chuckle, Seibert countered: “Taxi companies are an historically unappreciated group, to put it lightly. They are a group of people that have long been looked down upon and criticized, and are not a politically favored group.”
Chen bemusedly shook his head.
“There’s a whole lot of favoritism going on, like it or not,” he said.
Flywheel, which touts itself as San Francisco’s oldest taxi service, sued the commission in September 2015, claiming that while it and other traditional taxi companies are governed by the San Francisco Municipal Transportation Agency, the commission classified Uber and Lyft as transportation network carriers – subject to much less stringent regulation.
It points to the commission’s 2013 decision creating a category of "transportation network carriers," and claiming jurisdiction over all "de facto" taxi companies in the state.
Flywheel says that all taxi companies, whether traditional or ride-hailing upstarts, should be treated equally and regulated by either local municipalities or the commission. The company says San Francisco requires traditional taxi companies to carry $1 million in liability insurance, provide ADA-accessible vehicles, offer workers' compensation coverage for drivers and limit the number of vehicles on the street, among other strict rules that are not imposed by the commission on Uber and Lyft.
Seibert said there’s an abundance of similarities between traditional cabs and transportation carrier networks, as Uber, Lyft and Flywheel all use mobile apps to prearrange pickups, allow credit card payment systems and use GPS to determine fares.
She added that in 2013 when the commission made its decision, all three companies were accepting rides off the street.
“How would that even happen if somebody doesn’t even the app loaded? How would someone hail a Lyft?” Chen asked.
“They have markers on their cars just like taxis,” Seibert said.
Chen asked, “But how would even one pay for that?”
Seibert said the riders would simply hand the drivers cash, like they would with a taxi.
Commission attorney Jonathan Koltz interjected, “I think Uber and Lyft probably had some incentive to make sure their drivers weren’t taking cash under the table. They have an interest in making sure all the rides go through the app so Uber and Lyft can get their cut.”
Chen asked, “What evidence is there that Uber and Lyft took street hails without using the app?”
Seibert said Flywheel doesn’t have any evidence of this yet, since discovery hasn’t been opened.
Chen took the arguments under submission.