Uber and Lyft Called Unlicensed Cheaters

HOUSTON (CN) - Houston and San Antonio cabbies sued the ridesharing app-providers Uber and Lyft in Federal Court, seeking an injunction against the unlicensed services they claim are "skimming only the profitable trips."

Lead plaintiff Dawit Sahle operates Adulis Cab Co. in Houston, and owns eight city-issued taxicab permits.

Sahle's co-plaintiffs include most licensed taxicab services and limo drivers in Houston and a "substantial portion" of San Antonio's licensed cabbies, the complaint states.

Uber's app service connects people looking for a ride to people willing to offer a ride for a fee.

Customers provide Uber with a credit card number, which Uber charges for the transportation services, so that no cash changes hands between the rider and the driver.

Lyft's app lets people who need a ride request one from its designated drivers who don't charge fees, but accept "donations."

Uber and Lyft came to Houston in February and to San Antonio a month later.

Sahle claims Uber and Lyft drivers in Houston are openly defying city licensing requirements even in the face of mounting citations from police.

City of Houston administrator Tina Paez issued a letter to city officials Wednesday, stating that Uber and Lyft have been issued 11 tickets for illegally charging for rides, and their drivers have received 15 tickets, according to Houston Chronicle blogger Charles Kuffner.

Plaintiffs' attorney Martyn Hill told the Chronicle the Houston taxicab companies filed suit because the increase in tickets in recent weeks hadn't scared off Uber and Lyft.

Sahle claims the app providers are trying to skirt licensing requirements for cab drivers in Houston and San Antonio by holding themselves out as "ridesharing" services.

"The defendants seem to think that by self-designating their operations as

'Ridesharing' they are somehow precluded from regulation, and further, that they may convince unsuspecting consumers that they are something they are not," the complaint states. "In reality, the defendants are offering on-demand transportation services for compensation and subject to all the same regulations as the plaintiffs."

Sahle says the companies mislead consumers about the legality of their services.

"When asked directly about their approval status, Uber is dishonest towards consumers about their illegal transportation service, instead giving misleading responses like 'We're Here!'" the complaint states.

Lyft is similarly deceptive, Sahle adds, as it "repeatedly represents on its website that drivers are required to follow state and local regulations."

But Sahle says Lyft tells drivers on its website that "although they 'should never decline a ride based on a discriminatory reason,' they 'always have the right to decide if [they] feel comfortable picking up a passenger.'" (Brackets in complaint.)

Sahle says that instruction violated a Houston ordinance that states: "It shall be unlawful for any driver of any vehicle for hire to refuse to transport a passenger on a basis of race, color, religion, sex, national origin, age, or disability."

Uber and Lyft also benefit unfairly from not paying permitting fees required of licensed cab and limo drivers, Sahle says.

"By operating illegally with non-permitted vehicles, the defendants are skirting applicable regulations and paying zero dollars in permit fees to San Antonio

and Houston," the complaint states.

"Their actions violate both state and federal laws, and result in the realization of illicit profits to the detriment of the plaintiffs, while at the same time depriving the plaintiffs of profits they would otherwise obtain."

The cab and limo drivers want the app providers' services declared illegal in Houston and San Antonio, and an injunction.

They also seek damages under the RICO and Lanham Acts, and for unfair competition under Texas law.

They are represented by Martyn Hill with Pagel, Davis & Hill of Houston.

Follow @cam_langford

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.

Email *

Submit