Uber’s business model is not making the taxi industry in major cities happy because it competes directly against them. Uber has seen resistance in Washington D.C., San Francisco, New York, and Boston. Now Chicago is jumping in on the blame-Uber-for-everything bandwagon by filing a lawsuit against the company despite the endorsement from FCC chairman Julius Genachowski.
This past April, Uber had started going from offering black cars in Chicago to starting to offer taxi services through their mobile app. Through the Uber app, riders can see which taxi cabs are near them on a map. The way it works is by setting your exact location and what time you want to be picked up. You receive a message when the taxi arrives at the location too. Uber was recruiting taxis on a driver-by-driver basis.
Uber is being accused of violating multiple Chicago and Illinois laws that relates to public safety, consumer protection, and fair practices. The taxi industry is also alleging that Uber is using deceptive business methods to confuse customers.
Uber is being accused of not inspecting taxis for make sure that they comply with city and state regulations and for working with “fleet partners.” There are claims in the lawsuit that state that Uber charges a 20% gratuity for all taxi rides. Uber said that riders to pay a 20% gratuity, but this goes through the driver. Drivers pay Uber a service fee per ride.
More on this story as it develops.