Newark’s Taxi Cab Drivers Launch Lawsuit Over $10M Uber Deal

NEWARK, NJ — Newark’s recent $10 million mega deal with rideshare service Uber won’t go unopposed, reports say.

Multiple Newark cab and limousine companies recently filed a federal lawsuit against the city alleging that the city’s deal violates local taxi drivers’ constitutional rights, NJ.com reported.

The groups representing the incensed drivers – which include the Newark Cab Association and Newark Taxi Owner Association – charge in the lawsuit that the city is essentially forcing them to purchase a $500,000 license while giving their competitors at Uber and Lyft a different, more beneficial deal.

An Uber spokesman offered a reply to the lawsuit to NJ.com, pointing out that multiple states have enacted legislation similar to Newark’s law.

“Our agreement with the City of Newark helps meet the overwhelming demand for affordable, reliable rides and provides expanded economic opportunity for thousands of Newark residents,” the spokesman stated.

Newark city officials and Uber announced details of the $10 million deal in April, labeling it the first such deal in New Jersey.

• See related article: Newark, Uber Megadeal: More Details Released

The agreement will grant license for Uber to operate at Newark Liberty International Airport for the next decade. In return, Uber must:

• Pay $1 million a year over 10 years to the City of Newark for operating at Newark Liberty International Airport.
• Provide $1.5M of commercial liability insurance coverage for all transportation network company drivers operating on the platform.
• Conduct background checks on all drivers through a nationally-accredited, third-party provider. These checks will examine county, state and federal records, as well as motor vehicle records, sex offender registries and terror watch lists.
• Enforce a zero tolerance policy for drug and alcohol use by drivers using the UBER app.

In addition:

• Uber drivers may not stand in areas set aside for taxi waiting and will wait at an off-airport dispatch location to receive calls through the Uber app.
• Uber drivers are prohibited from staying at Newark terminals to receive dispatches.
• Even if a state-wide law is passed regulating Uber, the company will remain obligated to pay the $10 million.
• Newark may audit Uber’s compliance with this agreement annually.
• Uber will provide $1.5M of commercial liability insurance coverage for all drivers operating on the platform.

Photo: Flickr Commons

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