Uber Safety Claims Will Be Put to False Ad Test

Ride-hailing service Uber Technologies has said it offers the safest rides on the road and now must face false advertising claims by competing taxi companies unhappy with the suggestion they are more dangerous.

A federal judge Friday that the companies could proceed with the lawsuit on the False Advertising Law claim but he granted Uber’s request to dismiss the portion that referred to claims based on protected speech in the media and state Unfair Competition Law claims.

Some 19 taxi companies, including Bay Area fleets of Yellow Cab, the LA Taxi Cooperative, San Diego area cabs, Big Dog Cab and Royal Taxi sued in March 2015.

Uber had argued the entire case should have been thrown out because all the challenged ad claims were “non-actionable puffery” and exaggerated advertising slogans that consumers do not usually rely on.

But Uber charges riders an extra $1 on each ride as part of its “safe rides fee” and has made statements that customers who pay the fee using UberX, the lower cost service, get safer rides, according to the lawsuit.

“At this stage of the litigation, the court cannot conclude that the challenged statements, considered together, are all ‘exaggerated advertising, blustering and boasting upon which no reasonable buyer would rely,” wrote U.S. District Judge Jon Tigar.

Uber has advertised that it has “safe pickups” and “no more waiting alone on a dark street hoping you can hail a taxi.”

Uber relies on software that is a smartphone app that consumers download and may contact Uber drivers in the area looking for a ride.

More Regulatory Troubles

The company has been plagued with legal troubles, including a ruling last week by an administrative law judge for the state Public Utilities Commission that Uber should be suspended from operation in California and fined $7.3 million.

The ruling found that Uber failed to comply with state law that it complies with requirements that rides be fairly provided to all passengers no matter where they live or who they are.

Uber was required to report to the PUC the number of requests for rides it receives from people with service animals or in wheelchairs and how many such rides were completed, as well as ride logs by zip code and the dates and times of the raid.

Uber has raised $5.9 billion in venture funding so a suspension from service would be a serious setback.

The company also has a raft of lawsuit pending against it by drivers contending they are employees and not independent contractors, as Uber currently classifies them.

Case:  LA Taxi Cooperative v. Uber, No. 15-1257JST


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