Uber and Lyft won a victory at L.A. City Hall last week when the City Council failed to muster enough votes to appeal state regulations allowing ride-sharing. But away from City Hall, the battle between ride-sharing apps and traditional taxis is just getting started.
The taxi industry is appealing the state's regulations, and United Independent Taxi Drivers has taken the matter to court. In a lawsuit, UITD — one of L.A.'s taxi companies — alleges that Uber, Lyft and Sidecar pose unfair competition.
“Our business has taken a dramatic hit from these companies operating everywhere,” said Michael Giler, the operations manager for UITD. “We needed to protect ourselves.”
Ride-sharing companies allow passengers to arrange for car rides through an app on their smartphones.
The lawsuit, which was filed in July, alleges that ride-sharing companies have an unfair advantage over taxis because they pay no franchise fees and have no rate regulations.
The suit claims that Uber, Lyft and Sidecar “unlawfully and unfairly take away passengers from Plaintiffs' members and drivers, damaging their ability to provide cost-effective transportation in accordance with local regulations.”
Giler said his company has seen a sharp drop in business from weekend clubgoers in the South Bay and in West Hollywood. He estimated that the club business has dropped at least 30 percent since Uber, Lyft and Sidecar came on the scene.
Lyft's attorneys have asked the judge to throw out the lawsuit, on the grounds that ride-sharing has already been authorized by the state Public Utilities Commission. The attorneys also state that Lyft does not offer a taxi service because payment for rides is “entirely voluntary.”
“Plaintiffs apparently hope to use this lawsuit to accomplish what they could not do through the PUC rulemaking process: to shut Lyft down and stymie the development of Lyft's ride-matching community,” the attorneys wrote.
L.A.'s Department of Transportation ordered the ride-sharing companies to shut down in June. But that order has since been ignored, both by the ride-sharing companies and by the city. L.A. Mayor Eric Garcetti has expressed support for ride-sharing, and argued that taxi companies should keep up with innovation.
Giler said that UITD is doing just that.
“The taxi industry is definitely going to evolve and go completely mobile,” he said. “We will address every one of their challenges with even better technology.”
The other eight cab companies in L.A. have not joined in the lawsuit. Rick Taylor, who represents L.A. Yellow Cab, said the company is still figuring out how to approach the issue.
“We're working to get our side told a bit better,” Taylor said.