Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Tuesday, May 21, 2024 | Back issues
Courthouse News Service Courthouse News Service

OC Cabbies May Have Competition Case Against Uber

An Orange County taxi company can move ahead with its claim that Uber unfairly competes with authentic taxis by skirting local cab regulations, a federal judge ruled.

SAN FRANCISCO (CN) – An Orange County taxi company can move ahead with its claim that Uber unfairly competes with authentic taxis by skirting local cab regulations, a federal judge ruled.

While it went out of business in April 2016, A White & Yellow Cab Inc. still says it is owed restitution by transportation network carriers like Uber and the California Public Utilities Commission, which the agency decided it would begin regulating in 2012.

Traditional cab companies like A White & Yellow Cab are regulated by cities and counties and are subject to more stringent rules, including requirements to maintain workers’ compensation insurance for all drivers and carry a minimum level of liability insurance. Cities also impose a limit on the number of taxis that can operate.

A White & Yellow Cab says Uber didn’t have the same type of regulations imposed by the Orange County Taxi Administrative Program, since it falls under the California Public Utilities Commission’s jurisdiction.

The company claims Uber is able to operate less expensively and nab fares from John Wayne Airport in Santa Ana. While it has tried for years to expand its business, A White & Yellow Cab says it has been unable to get a permit to operate at John Wayne because of more stringent Orange County regulations.

In partially granting Uber’s motion to dismiss, U.S. District Judge Jeffrey White ruled he could not find for the cab company on its claim that Uber is running an unlicensed and unregulated taxi service because that would unlawfully interfere with the state commission. But White said the company can amend its claim if it can offer facts that would not impede the commission’s regulatory activities.

He also said A White & Yellow Cab may have a claim for unfair competition.

“Plaintiff has alleged that the Uber defendants engaged in conduct, such as charging lower rates with lower overhead, with a larger fleet of cars. According to plaintiffs, as a result of that conduct, they lost money as a result of that unfair competition,” White wrote. “While those facts may not support a request for restitution, the court finds plaintiff has alleged sufficient facts to show it has standing to pursue a claim under the unlawful or unfair prongs of the Unfair Competition Law, to the extent it can remedy the other defects identified in this order.”

Though defunct, A White & Yellow Cab Inc. still remains an active corporation. Maryann Cazzell, a Santa Ana attorney representing A White & Yellow Cab, says it’s been very hard for traditional cab companies like her client to watch Uber swoop in and begin operating without the tough regulations to which cabs are subjected.

“It’s really frustrating. If you’re a legitimate taxi company you have to jump through all these hoops,” Cazzell said in a phone interview.

She added, “We’re going to amend and I’m optimistic we can go forward. A claim like this is always tough. We have to be able to show it was unlawful or unfair because they were able to operate with a lower overhead and a larger fleet of cars while we cannot.”

She said because her client had a contract with the city of Anaheim, they might be able to show that they are entitled to restitution.

“Judge White might have been hinting that because my client went out of business and had a contract with the city of Anaheim maybe we can show there’s some right of restitution. I think we probably could as to Anaheim because they had a 20 percent market share for a while.”

In a separate ruling involving the commission’s motion to dismiss, White said the taxi company’s equal- protection claim against the commission is not barred by the Johnson Act, which blocks federal courts from enjoining public utility rates. White ruled that the Johnson Act doesn’t apply here, since A White & Yellow Cab’s lawsuit doesn’t challenge an order from the commission that affects rates.

Cazzell said she was more encouraged by that ruling.

Follow @MariaDinzeo
Categories / Business

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.