The entry of Uber into the local car-for-hire businesses around the country has created a tension between the company, its taxi competitors, and the rules that localities have promulgated to regulate for-hire-vehicles. In all of these localities Uber has attempted to create as many exemptions from the regulations for itself, claiming that it is a technology company, with drivers as independent contractors, not a car-for-hire business.

In New York, Uber is seeking to pass legislation at the state level that would give the company a legal exemption from the need to comply with the Americans with Disabilities Act and to avoid the mandate of 50% accessible vehicles that the taxi industry must be in compliance with by 2020. The Assembly bill in question AB 9730 reads as follows:

“From a public policy standpoint, repeated waves of heavy fines levied against For-Hire Bases may have helped the City’s coffers, but it has failed to benefit the disabled community which is not being properly serviced. Therefore, it is important that a program be created that efficiently and equitably provide wheelchair users with transportation service. Such an outcome will be accomplished by creating a central dispatch, controlled by the city, which will dispatch wheelchair accessible vehicles throughout the City of New York. The described program ensures that wheelchair users actually receive their transportation services.”

Put simply, Uber wants to create a system to provide accessible cars-for-hire that would absolve it of any responsibility for following the current mandate for taxis—all in the interest of the disabled, of course. This is the latest example of Uber’s attempts to resist regulatory parity because of its business model.

Legal Challenges

What a number of outstanding legal challenges have revealed however, is that the Federal courts have looked at Uber’s claims with healthy skepticism. In New York’s Southern District, an antitrust lawsuit ensued with Judge Jed Rakoff observing: “The advancement of technological means for the orchestration of large-scale price-fixing conspiracies need not leave antitrust law behind.” (http://www.nytimes.com/reuters/2016/03/31/technology/31reuters-uber-tech-lawsuit.html?src=busln&_r=2)

What this means is that Uber cannot end-run the antitrust laws in claiming that its business model permits the orchestration of artificial pricing that puts competitors at risk. Uber could avoid the danger here by admitting something they are fighting to keep secret: For all their technological sophistication, they are at bottom a taxi service company.

Federal judges in Boston and Chicago have felt the same way. In the first instance, “U.S. District Court Judge Nathaniel Gorton on Thursday ordered the city of Boston to revise its taxi regulations within six months, and to give the court a good reason why the city shouldn’t be forced to regulate taxis and other ride-hailing services in the same way.”
(https://www.boston.com/news/business/2016/04/02/judge-not-so-sure-uber-and-lyft-are-any-different-from-cab-companies)

In Chicago, “Differences in the rules that govern taxi operations and ride-sharing services in Chicago “appear utterly arbitrary,” a federal judge has concluded. In a written opinion, U.S. District Judge Sharon Johnson Coleman did not rule on the merits of allegations that the city is playing favorites by imposing more stringent requirements on taxi drivers than on their counterparts with such services as Lyft and Uber.” (http://www.chicagolawbulletin.com/Archives/2015/09/24/Taxis-Uber-Lyft-9-24-15.aspx)

What do all these legal rulings mean?

The implications from the federal judiciary are that equal protections under the law means that Uber and its imitators must be made to comply with the same rules that others in the car-for-hire business follow, irrespective of how technologically clever these companies may be.

Given the direction of the law, it should be incumbent on legislators to take the lead of insuring that all competitors follow the same rules and that fairness is imposed. Simply because a company like Uber is roughly valued at $51 billion does not mean that it should be exempted from the rules that so many of its competitors must follow.