Uber Atlanta Facing Lawsuit

On Tuesday, September 9th, Atlanta Taxi Cab drivers announced a lawsuit against the popular ride share service Uber, citing unequal business practices that allow the services to skirt around the regulations that transportation companies and cab drivers must abide by in order to conduct their business. The court case has been filed in the Fulton Superior Court, and the cab drivers are seeking to file against individual Uber drivers in addition to the company.

Cab drivers in Atlanta – as well as several other major U.S. cities and states, including New York City, Chicago, Los Angeles, and the state of Maryland – are submitting complaints, organizing protests and filing multiple lawsuits as a backlash to ride share services Uber and Lyft. Traditional taxi cab companies and drivers are aligning against the vastly popular Uber and Lyft because they provide competition without having to comply with regulations of traditional taxis, and are therefore undercutting the traditional business model of taxi services. Although these traditional companies have shown discontent at the competition, Uber and Lyft have garnered large public support.

Popular ride share services such as Uber and Lyft have recently reshaped the contours of the taxicab industry by allowing individuals with a car, a license, and liability insurance to give rides to anyone that has the free phone app necessary to submit a request. In order to ensure that their drivers have sufficient insurance coverage, Uber does provide liability insurance to drivers and riders en route. Ride-sharing often costs much less than hailing a traditional taxi and money is exchanged through a credit card over the phone so drivers do not have to carry cash. Every driver is also rated by the riders so that riders only choose trustworthy drivers. Costs are much less for ride share rides because the ride share services are not required to pay for expensive medallions, train their drivers to drive taxis, or deal with a lot of the overhead that comes with running a traditional taxi service. Cab companies criticize Uber and Lyft and claim that because they do not have to purchase the certificates and medallions that allow them to practice, provide commercial insurance to their drivers or undergo regular vehicle inspections, they are unfairly taking away business. The criticism is now escalating into legal action.

Previous attempts to regulate ride share services in Georgia have been met with ardent opposition. During the 2014 Session, House Bill 907 was introduced to require ride-share services and ride referral services to comply with the same restrictions that the state currently places on the taxicab industry. It would have imposed on them the same medallion, training, taxing, and insurance requirements imposed on the taxicab industry, which would undoubtedly increase the cost of ride sharing. HB 907 received tremendous pushback from not only Uber, but citizens in the Metro Region, who were surprised at the attempt to regulate a service that, based on many reviews and comments, was far superior to the traditional taxi cab model.

The future feasibility and cost effectiveness of Uber and other ride-share services could also be affected by a House Study Committee created this legislative session by H.B. 1805. The Study Committee is tasked with examining the for-hire transportation industry in Georgia (among other things) – in essence, it will again look at Uber, under the guise of public safety, and potentially propose to regulate their services much like the traditional taxi service is regulated today.

Bills to regulate Uber are also up for consideration in other state legislatures. Two bills are being considered for approval in the state legislature of California, where Uber was started in 2009. A.B. 2293 aims to dismantle to two-tier system of insurance that Uber and Lyft currently work under and force the companies to provide commercial insurance. Supported by taxi cabs lobbyists, A.B. 612 aims to impose stricter regulations on Uber such as drug testing drivers, background checks, and vehicle inspections that traditional cab companies must provide.


While Uber considers itself a communication company connecting riders to drivers rather than a transportation company, it does provide insurance to drivers and riders when en route. Uber and Lyft have similar two tiered insurance systems: When the Uber App is off, the driver is covered under personal insurance. When the app is turned on, the driver is now covered by personal auto insurance supplemented by contingent liability coverage. During a trip, or when a rider is in the car, parties are covered by commercial insurance. Advocates of taxi cab companies are seeking to eliminate this system, which seems to be working smoothly now. Drivers and companies are fighting the newcomers, claiming that it is only fair that they adhere to the same rules; however the reality is that these innovative companies are essentially self regulating with user reviews and specific details in the palm of your hand.

Cloaking themselves in the guise of safety, these bills establish roadblocks in the paths of Atlanta and other cities to becoming supporters of innovation. The birthplace of many start-ups including Scoutmob, MailChimp, and AirWatch, Atlanta has began to establish itself as the tech capital of the Southeast. While Uber and Lyft are San Francisco-based companies, they are both considered to be on the cutting edge of ride-share technology.

This lawsuit against Uber Atlanta comes at a crucial time and will most likely be influenced by the House Study on for-hire ride sharing.

When asked for a comment on the litigation, the General Manager of Uber Atlanta, Keith Radford sent the Council this statement: “While we can’t comment on active litigation, I can tell you that Uber will vigorously defend the rights of riders to enjoy competition and choice, and for drivers to build their own small businesses.”

The Council will continue to monitor this issue and keep Council members informed of new developments.