Newark cab companies file federal lawsuit over city's $10M Uber deal

by Sean Riley

Several Newark cab and limousine companies have filed a federal lawsuit against the city arguing that a $10 million deal cut with online ride-hailing company Uber violates constitutional rights of taxi drivers.

The lawsuit filed last week is the latest move by taxi groups to protest the deal they say unfairly tips the competitive scales in favor of Uber and similar companies.

Newark's cab associations have opposed the $10 million deal since it was announced in April.

The cab associations argue in the suit that Newark forces them to buy $500,000 licenses, while devaluing those licenses by letting online ride-hailing companies operate without them. 

The plaintiffs, which include Newark Cab Association and Newark Taxi Owner Association, wrote that Uber's use of a mobile app to connect drivers and riders should not exempt the company from municipal regulations.

"Because cars, drivers and passengers exist and travel in the real world, not the virtual world, the same public safety concerns exist regardless of how passenger and driver connect," the lawsuit states. "Therefore, the rules governing the activity should be substantially the same for all."

Taxi and limo companies face more costly safety regulations than businesses like Uber, the lawsuit states. Policies governing drivers' qualifications, background checks, application fees, inspections, rates and insurance differ between cab companies and ride-hailing businesses, according to the lawsuit. [MORE]