According to a lawsuit filed by Connecticut taxi and livery firms yesterday in New Haven federal court, ride-sharing services Uber Technologies Inc. and Lyft Inc had been preying parasitically on established services, Bloomberg reported. The firms also alleged in the complaint that Uber and Lyft operate without any proper licenses, hat cut corners illegally, and had undermined critical safety provisions of the state taxi and livery laws.
Uber, Lyft and other "sharing economy" businesses have been facing scrutiny as of late due to their business models deemed controversial in some of the cities they have operations in, the news agency said. The two ride-sharing services, who had started operations in the state in April, usually take a portion of the fees from booked transactions. The companies partner with drivers who have agreed to be affiliated with the service firms to ferry customers to their destinations. According to the companies, they exist differently from taxi dispatchers and should not be compelled to comply with existing state regulations.
The Taxicabs & Livery Council of Connecticut Inc, along with over a dozen dozen taxi and livery companies, are seeking an injunction on Uber and Lyft's services in the state, Bloomberg said. According to the cab companies, Uber and Lyft had operated profitably by misappropriating the infrastructure of taxi and livery services existing in the city. Moreover, the complainants cited the services' disregard for safety, driver background checks and liability insurance requirements compliance.
In a statement, Uber spokeswoman Nairi Hourdajian said about the lawsuit, "This baseless lawsuit is just another example of taxi company owners trying to shield themselves from perceived competition and limit consumer choice and driver opportunity. Uber will vigorously defend the rights of drivers and riders to connect to safe, affordable and reliable transportation alternatives."
Lyft spokeswoman Chelsea Wilson said that the complaint filed against the company has no merit and that the company is looking to resolve the issue quickly and effectively.
