Taxicab drivers in Seattle are suing Uber not because they’re scared of competition. In fact, they say they welcome it.
Rather, members of The Western Washington Taxi Cab Operators Association argue that their lawsuit is all about fairness. Their comments, in interviews with GeekWire, add more context to the suit’s clam that Uber’s service “engages in an unlawful and deceptive business practice which harms the economic interests of taxicab drivers.”
“They don’t follow the rule of law, period,” said 14-year Seattle taxi veteran Salah Mohamed. “That’s the reason we are suing them.”
UberX, which allows everyday drivers to make money by shuttling passengers around town, has technically been operating in Seattle illegally ever since it arrived in Seattle more than a year ago. The city, which did not issue a cease-and-desist letter, allowed “transportation network companies” like UberX, Lyft and Sidecar to roam around its streets until just a few weeks ago when the City Council finally decided to force these startups to abide by certain rules.
Next month, the companies will need to limit their active cars on the road, maintain proper commercial insurance and pay the city $50,000 for a license to operate, among other regulations. Uber expressed frustration with the Council’s decision two weeks ago, saying it would “absolutely keep fighting” the approved legislation.
Now, the taxi association’s lawsuit is attempting to get Uber to pay up for the past year and a half of “lost fares and tips.” They also want Uber, which now operates in nearly 80 cities worldwide, to leave town if it continues conducting its business in the same manner.
“We want something that’s fair to everybody,” said Parminder Cheema, a taxicab driver and elected member of the association’s leadership council.
A year’s worth of frustration for taxi drivers stems from the fact that they’ve had to abide by city rules — which include licensing fees, commercial insurance laws, uniform rates and a bevy of other requirements — for decades, while Uber and others have come into town and conducted business in their own manner.
“If they are legal and doing things legitimately, we have nothing to be angry with,” Cheema said.
Cheema and Mohamed both repeated that this is an issue not about blocking innovation, though many have pegged it as exactly that. In fact, they say that the Seattle taxi industry tried to introduce similar apps a few years ago, only to be stymied by city regulations.
“We aren’t against innovation,” Cheema said. “We had it and Seattle lawmakers never let those innovations take place. Now, when the innovation is coming from companies backed by Amazon and Goldman Sachs, it’s a different story. That’s why we are mad — it’s a big company doing it, and the city is bending backward to please them.”
While the taxi drivers support new technology that improves their service, they do have problems with competitors that perform identical tasks — taking people from A to B — but do not follow the same rules.
“If you want to be a taxi, if you want to be me, then be me,” Mohamed said. “Let’s compete for customers and see who wins. I don’t mind if I lose when that happens, because then they are better business people — that’s the way America is. But I don’t want you to cut my legs and make me run.”
As many taxi industry supporters have done, both Mohamed and Cheema called out UberX for its insurance gaps that could affect both UberX drivers and passengers. While the San Francisco-based startup has a $1 million coverage for driver liability if a driver’s personal auto insurance does not cover the cost of an accident, there are still questions about exactly when coverage kicks in and whether or not UberX drivers are carrying their own commercial insurance.
“They are putting drivers at risk, and they are putting customers at risk,” Mohamed said.
Mohamed conceded that the taxi industry could offer better customer service. This an area where the transportation startups often excel, which has helped to win over fans. “But it doesn’t justify them coming here and operating illegally,” he said.
“I believe that we live in a great country that is free, and part of maintaining that freedom is following the rules of law to make sure we have level playing fields,” Mohamed said. “When that is broken, I don’t think we have anything. The dream I chase is working hard and spending money on family. But now what I see is people looking for loopholes so they can break the system. It kills me to see this.”
So why are the taxi drivers attacking Uber? Why not Lyft, or Sidecar? Or why not follow the lead of taxi drivers in Chicago and sue the city, which is responsible for making sure companies don’t find those “loopholes” and set all the regulations on the taxi industry in the first place?
Suing the city is “in the pipeline,” Mohamed said. But for now, his colleagues are focusing on Uber.
“UberX is at the heart of things and is the most powerful,” he said.
While allowing companies like UberX and Lyft to operate with caps in its town, the Seattle City Council also decided to give out 200 more taxi licenses during the next two years — the first time it has done so in more than two decades.
But even that is not going to satisfy some of the taxi drivers, and especially the ones that are suing Uber. They want a level-playing field — and if not, a shutdown of companies like UberX, Lyft and Sidecar.
“They are taxi companies,” Cheema said. “They need to follow the same rules as taxi companies.”
Going forward, the city will enforce its new ordinance likely at the end of April. Several questions remain: How will the city precisely monitor how many active cars each company has on the road? When, and how, will it re-assess its 150-cap and other just-implemented rules? And will the courts side with the taxi drivers in their lawsuit against Uber?
“What’s happening right now is a fight between a regulated industry and an unregulated industry,” Mohamed said. “It’s a fight between the rule of law and anarchy.”
Uber offered this statement when asked about the lawsuit:
Uber remains focused on connecting people with the safest and most reliable transportation options in Seattle and protecting the thousands of small business jobs created by our technology platform. It is unfortunate that the taxi industry is not similarly focused on what really matters: safety of riders and opportunity for drivers.