Uber, recently embroiled in a scandal involving not-so-veiled threats against unfriendly journalists, accused of operating illegally by the city of Portland, banned in Delhi, and ordered to halt operations in Spain and Thailand, has more trouble to contend with on the home front in California this week.
Just this afternoon San Francisco District Attorney George Gascón and Los Angeles County District Attorney Jackie Lacey announced their filing of a civil consumer protection action against Uber something they hinted they'd be doing back in September. The company, they say, has misled consumers and has engaged in a variety of business practices in violation of California law. The action alleges that the transportation network company:
- Makes untrue or misleading representations regarding the quality of the background checks it performs on drivers and the measures it takes to ensure customer safety;
- Charged its UberX customers a $1.00 “Safe Rides Fee” and falsely told those customers that part of that money was paying for an “industry-leading” background check process;
- Uses the Uber app to calculate customer fares based upon a measurement of time and distance without obtaining approval of the technology from the California state agency that ensures such fare-measuring technology is accurate, reliable, and does not facilitate fraud;
- Unlawfully conducts commercial operations at California airports without obtaining authorization from the airport authorities;
- Fraudulently charged a $4.00 “Airport Fee Toll” to customers who used its UberX service for a trip to or from San Francisco International Airport even when the UberX drivers weren’t paying anything to the airport because they did not have permission to operate there.
The two DAs' offices originally sent warning letters to Uber, Lyft, and Sidecar on September 24 promising injunctive relief and civil penalties if the companies didn't change policies and practices "quickly." It seems Uber wasn't moving quickly enough.
Lyft, as Gascón notes, settled for $500k, and has agreed to refrain from misrepresenting its driver vetting process to resolve similar allegations.
Will the company now valued at $40 billion be able to get through a suit like this in one of their biggest U.S. markets unscathed? Will other cities start following suit in a domino effect of litigation? Only time will tell.