Philadelphia Cabbies Flag Down Uber

PHILADELPHIA (CN) - Forty-five Philadelphia taxi companies piled onto Uber Tuesday, claiming in Federal Court that the company conspired to violate state taxi laws by operating without medallions.

"Not since the days of bootlegging has there been a criminal enterprise so brazen and open as to attract hundreds of millions of dollars in investment from investment bankers and to operate in blatant violation of federal and state law as Uber," the complaint begins.

Checker Cab Philadelphia et al. sued Uber, its CEO Travis Kalanick, three LLCs that financially back the company, including Google Ventures, which has put $258 million into Uber, and 18 other people.

The cabbies claim that Uber's pricing plans, based on a combination of time and distance, are so similar to taxis as to be indistinguishable and that its drivers require medallions.

"This is a conscious business model that they have undertaken across the country and indeed across the globe in a belief that their funding will allow them to outspend the regulators," the complaint states. "They have placed themselves above the law."

The complaint comes just over a month after the state's Public Utility Commission allowed UberX to operate, but admonishing that it "abandon its anarchist ways" after flaunting a PUC cease-and-desist order.

And it comes just over two weeks after Portland, Ore. sued Uber, which expanded into the city though Portland had warned it against it.

Los Angeles and San Francisco also have picked legal beefs with Uber, claiming it had misled consumers about its background checks of drivers.

The Philadelphia cabbies also accuse Uber of false advertising, by scaring consumers into believing that taxis are uninsured.

Uber allegedly tweeted on Oct. 27 that "the largest taxi insurer in Pennsylvania went bankrupt. Many uninsured taxis are still on the road; though some may have new policies, there's no guarantee that your taxi ride will be insured."

The tweet referred to the insolvency of First Keystone Retention Group, a major taxi insurer.

The Philadelphia cabbies say in the complaint that all of them obtained new coverage shortly after First Keystone's liquidation, calling the tweet "literally false."

They claim that Uber's financial backers are engaging in racketeering by profiting off of Uber's business model.

The cabbies claim that the "Illegal Taxicab Enterprise has the common purpose of obtaining illegal revenues through the collection of unlawful taxicab fares from the riding public" and that they "commit wire fraud to further their illegal scheme."

Plaintiffs seek an injunction and treble and punitive damages for unfair competition, false advertising, wire fraud and intentional torts.

They are represented by Michael Henry with Salaman Grayson & Henry.

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