Adding to a growing number of lawsuits around the country, a Memphis taxi company has filed a class action against Uber and Lyft for unlawfully interfering with its business. The plaintiffs, Southern Transportation, Inc. and George Abraham, claim Uber and Lyft have gained an unfair competitive advantage over traditional taxi services by ignoring costly state statutes and city ordinances regulating for-hire transportation companies.

Southern Transportation claims that unlike traditional for-hire companies, Uber and Lyft do not (1) conduct background checks on its drivers, (2) pay various fees imposed on for-hire transportation companies, (3) participate in a unified carrier registration system, (4) carry adequate liability insurance, and (5) require its drivers to have appropriate drivers licenses. By ignoring these legal requirements, plaintiffs claim, Uber and Lyft avoid costly startup and operating costs paid by traditional taxi companies, allowing them to charge lower, more competitive rates.

As Ralph Patino, an attorney representing similar for-hire transportation companies in a Florida class action, is reported to have said, “the traditional drivers for-hire — can’t compete with the ride-sharing apps because they have county licensing, insurance and inspection costs that Uber and Lyft drivers do not.”[2]