Los Angeles and San Francisco District Attorneys have flashed a glaring red light to Uber’s ridesharing operations in California, filing a lawsuit Tuesday that claims the company committed multiple business practice violations including misleading passengers on the safety of their rides.
The suit, filed in San Francisco Superior Court, said Uber touted its background checks as “industry leading,” yet the San Francisco company did not subject its drivers to fingerprint tests. Passengers were then charged $1 “safe ride fees” based on what district attorneys said were substandard background checks.
Uber is also accused of calculating ride fares without state approval, an oversight process that prevents companies from overcharging its customers. The suit goes on to claim Uber operated at California airports without proper authorization and committed fraud by charging passengers $4 toll fees for rides in and out of San Francisco International Airport – fees that are owed to the airport, but that were never paid out.
“Uber continues to misrepresent and exaggerate background checks on drivers,” Los Angeles District Atty. Jackie Lacey said at a news conference in Los Angeles. “It’s not our goal to shut them down. What we’re saying is their advertising is false.”
Uber, which drove into the Los Angeles market in 2012, has hit countless roadblocks as it has expanded to other cities worldwide. Portland, Ore., sued the company on Monday for illegally operating without the consent of authorities. India, Thailand and Spain are the latest countries to put the brakes on the service. India banned Uber in its capital territory, Delhi, after a driver who had previously been arrested for sexual assault allegedly raped a female passenger.
The car service company has long fielded accusations of faulty business practices, which range from instructing staff to sabotage competitors by repeatedly booking and canceling rides and promoting campaigns to dig up dirt on journalists who are critical of the company.
But Uber’s questionable hardball tactics don’t seem to have fazed investors. The company recently announced a $1.2 billion funding round that valued it at $40 billion.
“Californians and California lawmakers all agree – Uber is an integral, safe and established part of the transportation ecosystem in the Golden State,” Uber spokeswoman Eva Behrend said in a statement. “Uber has met with the district attorneys to address their concerns regarding airport operations, the uberPOOL product, background checks and operation of the app. We will continue to engage in discussions with the district attorneys.” (UberPOOL is a carpooling feature offered by the company.)
The L.A. and San Francisco district attorneys had been negotiating with Uber and rivals Lyft and Sidecar since warning the companies about illegal business practices in September. Prosecutors announced Tuesday they would not take Lyft to court after the company agreed to pay $500,000 and change some of its business practices. Prosecutors are still in talks with Sidecar.
Staff reporter Melissah Yang can be reached at [email protected]. Follow her on Twitter @MelissahYang for the latest in L.A. tech news.
