UBER UPDATE INTL
NYC YELLOW CABS DEALT LEGAL BLOW
New York City won a legal victory last month against three lawsuits that said it was illegal for Uber and other app companies to operate in the city, handing the decimated yellow cab industry another blow. The decision is a win for both the city and Uber - even as Mayor Bill de Blasio’s administration battled the app company over traffic con- gestion this summer and tried to cap the number of its cars on the streets. AMNY reports that the largest lender to taxi medallion owners, Mel- rose Credit Union, sued the city in the Queens Supreme Court with other credit unions. They had made almost $2.5 billion in loans for 5,331 city-issued medallions going back to 2006. The lenders argued that apps such as Uber were violating the yellow cabs’ exclusive right to pick up street hails in New York state law - and that their “illegal” operations had caused the value of medallions to drop up to 40 per cent.
The city has argued that rides using electronic apps such as Uber are prearranged trips, not hails. Judge Allan Weiss said in his rulings that the Taxi and Limousine Com- mission has the authority to decide that electronic communications between Uber and passengers are prearranged trips - and that the distinction has softened because of the apps. “Uber-type companies are a new form of black car companies, and the TLC, having the authority to promote technological innovation and new services may, where necessary, treat the new companies some- what differently from the traditional companies,” said Weiss in the court papers. “Uber-type companies may not fit neatly into the traditional black car regulatory and the TLC must be allowed a reasonable amount of administrative discretion in applying rules as new circumstances arise.” Weiss dismissed all three related suits. Todd Higgins, the attorney for Melrose Credit Union and the other plaintiffs, said they would immedi- ately appeal the ruling. “We respectfully disagree with the decision by the Supreme Court upholding, as a matter of ‘administrative’ discretion, the TLC’s blatant- ly arbitrary and capricious determination, in direct violation of New York State law,” Higgins said. The Taxi and Limousine Commission said it was good news for riders. Uber also praised the ruling. “We are pleased with the decision, and appreciate the administration and TLC’s work on this,” said Josh Mohrer, a general manager for Uber in New York City. Higgins also spoke about the decimated taxi industry, which has seen a significant drop in yellow cab trips. “A catastrophe is unfolding, as an entire industry continues to be illegally destroyed, while elected officials allow it to happen on their watch,” he said.
NYC TAXIS ARE TESTING AN UBER-LIKE APP CALLED ARRO
The battle between yellow cabs and Uber cars is about heat up. According to Techcrunch, Crains reports that in New York, a new app called Arro is being beta tested among 7,000 yellow and green taxis in the NYC area, allowing potential passengers to e-hail a regular cab instead of an Uber. The app should roll out fully in a few weeks and spread to all 20,000 green and yellow taxis in the city. The Arro app is nearly identical to Uber, letting a user set a specific location for pick-up and sending that user’s name and location to the driver. Once a nearby cab is assigned the fare, the user will receive the
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name of the driver and the car ID so they can find the right taxi. But there’s one big differ- ence between Arro and Uber: no surge pricing.
Plenty of apps have tried and failed to mimic what Uber does on the taxi side, but Arro told Crains it has a better chance due to a partnership with Creative Mobile Technologies, the technology provider that handles payments and entertainment on those little video screens in many of the cabs you see in NYC. That same tech- nology is also present in the front of the cab, which will allow drivers to pick up Arro fares without integrating a dashboard smartphone, the way Uber drivers do.
CALIFORNIA JUDGE ALLOWS DRIVERS TO SUE UBER OVER TIPS
A judge has allowed Uber drivers in California to take legal action to determine whether they are contractors or employees. Three drivers had sued Uber, arguing they were employees of the company. Being classed as contractors meant they had not been able to claim expenses or receive tips, they claimed. Uber said few current drivers would qualify for the lawsuit, while the judge estimated the number of eligible drivers could be in the hun- dreds.
BBC News reports that the lawsuit had sought to include the 160,000 drivers who had worked for Uber in California since 2009. The ruling by US District Judge Edward Chen means that Uber drivers in California can sue as a group over whether they should have received tips. Shannon Liss-Riordan, a lawyer representing drivers in the case, said that contrary to Uber’s argument, “many thousands” would be eligible to participate in the legal action. “This decision is a major victory for Uber drivers,” she said.
Lonnie Giamela, a labour lawyer in Los Angeles who has been follow- ing the case, said the ruling “sets the stage for a trial and a legal battle that will have dramatic implications for Uber’s business model as well as more generally how independent contractors are viewed under Cal- ifornia law”. Judge Chen rejected Uber’s argument that there was no typical Uber driver, saying there was little evidence for that claim. He said the drivers had much in common, including that Uber sets their pay, uses feedback from customers to evaluate them and could fire them.
The judge also found there was “no basis” to support Uber’s claim “that some innumerable legion of drivers prefer to remain independent contractors rather than become employees”. An ultimate finding that drivers were employees could threaten Uber’s business model by forcing it to make social security contributions and thus raising its costs.
Its use of contractors has kept costs low and allowed the company to undercut traditional cab operators, sparking protests by taxi drivers in cities including London, Paris and Rio de Janiero. In June, a California labour commissioner ruled that an Uber driver was an employee, not a contractor. Uber has appealed against that decision.
OCTOBER 2015
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