Uber Can't Shake False Advertising Claims

In a blow to Uber, another federal judge in California has refused to dismiss a lawsuit accusing the company of engaging in false advertising by promoting its ride-sharing service as safer than taxis.

U.S. District Court Judge Cathy Ann Bencivengo in the Southern District of California rejected Uber's arguments that statements touting its service were "puffery" -- meaning that they were the kinds of exaggerations that wouldn't be relied on by consumers.

The ruling came in a false advertising complaint filed last year by Delux Cab, which operates seven taxis in San Diego.

Delux pointed in its complaint to several statements by Uber, including an April 25, 2014 blog post by Lane Kasselman, former head of communications for the company. "Unlike the taxi industry, our background checking process and safeguards are consistent across the United States and often more rigorous than what is required to become a taxi driver," Kasselman allegedly wrote.

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The complaint also noted that between April 2014 and March 2016, Uber charged a $1 "safe rides fee" to people using the Uber X service.

Uber asked Bencivengo to dismiss the lawsuit, arguing that the statements weren't actionable. She rejected those arguments, noting that a different federal judge, Jon Tigar in the Northern District of California, ruled in a separate case that L.A. Taxi Cooperative could proceed with similar claims against Uber.

"As noted by Judge Tigar, many of the alleged statements do include 'specific' assertions that seem to describe 'absolute characteristics' of Uber's services that could be tested," Bencivengo wrote. "As further noted by Judge Tigar, a reasonable consumer reading these statements in the context of Uber's advertising campaign could conclude that an Uber ride is objectively and measurably safer than a ride provided by a taxi or other competitor service."

But not all judges have sided against Uber on whether its boasts amount to false advertising. U.S. District Court Judge Frederic Block in Brooklyn dismissed two taxi companies' lawsuit against Uber last September, ruling that its safety boasts weren't actionable.

"No doubt, these statements are intended to convey the impression that Uber takes the safety of its passengers seriously. But they do so in terms that clearly fall within one or more of the accepted definitions of puffery," Block wrote. "The overall tone is boastful and self-congratulatory."

Last year, Uber agreed to pay $25 million to settle a consumer protection lawsuit brought by law enforcement officials in Los Angeles and San Francisco, who accused the company of false advertising and adding extra fees to consumers' bills. The company also reached a $28.5 million settlement with consumers over claims of misleading ads and fees.

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