Uber and Lyft: Goodbye Austin, hello more lawsuits

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In this week’s article we examine the Complaints in two class action lawsuits, one against Uber Technologies, Inc. [Johnston v. Uber Technologies. Inc.] and the other against Lyft, Inc.

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In this week’s article we examine the Complaints in two class action lawsuits, one against Uber Technologies, Inc. [Johnston v. Uber Technologies. Inc.] and the other against Lyft, Inc. [Thornton v. Lyft, Inc.], both pending before the United States District Court, Northern District of California, San Francisco Division. “The two lawsuits each allege that Uber and Lyft violated the (federal) Worker Adjustment, Retraining and Notification Act (WARN) when the companies fled Austin in May and failed to give their drivers 60 days’ advance notice as required of employers shuttering operations” [Rozen, For Uber and Lyft: Goodbye Austin, Hello Class Action Lawsuits, Texas Lawyer (6/9/2016)].

Terror Targets Update

ISIS Gaining Ground In World Terror

In Schmitt, As ISIS Loses Land, It gains Ground in Overseas Terror, nytimes.com (7/3/2016) it was noted that “In just the past few days, the Islamic State’s evolving brand of terrorism has revealed its deadly, shifting faces. The three deadly attacks (last week in Istanbul, Bangladesh and Baghdad) are being viewed by intelligence and law enforcement officials as proof that the Islamic State, the only terrorist group to create a state with borders, is becoming a larger, more sophisticated version of its stateless chief rival, Al Qaeda, as it loses territory under traditional military attack in Iraq and Syria. Militant volunteers that the Islamic State…began recruiting, training and sending to the West more than two years ago are now part of mature, clandestine networks, counterterrorism official(s) say. The networks are increasingly responding to calls to accelerate attacks globally as the group suffers setbacks at home”).

EU Afraid, Very Afraid

In EU citizens: ISIS to pose serious threat to Europe over next five years, www.eturbonews.com (7/6/2016) it was noted that “A majority of EU citizens believe Islamic State will pose a serious threat to Europe over the next five years and that attacks such as those that rocked Paris could happen again…The survey ‘Project 28′ conducted by the Szaradveg Foundation, an independent think-tank organization, was concluded in April this year. However, it was only published after the Brexit referendum in the UK”.

Istanbul, Turkey

In Yeginsu & Callimachi, Turkey Says Airport Bombers Were From Kyrgystan, Russia and Uzbekistan, nytimes.com (6/30/2016) it was noted that “The three suicide bombers who killed 44 people at Istanbul’s main international airport this week have been identified as citizens of Russia, Uzbekistan and Kyrgyzstan…Turkey, which has blamed the Islamic State for the attack, carried out raids across the country on Thursday, detaining 13 people, including three foreigners, in connection with the attack at Istanbul Ataturk Airport…There were 238 people wounded in the attack, and 94 of them were still in the hospital…No group has claimed responsibility for Tuesday’s attack”.

Dhaka, Bangladesh

In Manij & Anand, After Slaughter, Bangaladesh Reels at Revelations About Attackers, nytimes.com (7/3/2016) it was noted that “Bangaladesh’s capital city reeled in shock on Sunday as clues began to flood social media about the privileged backgrounds of the half-dozen attackers believed to have butchered 20 patrons of a restaurant…The men, all in their late teens or early 20s, were products of Bangaladesh’s elite, several having attended one of the country’s top English-medium private schools as well as universities both in the country and abroad… That children of the country’s upper classes appear to have joined militant Islamists in an act of such brutality highlighted the radicalization among the largely moderate Muslim population here, a process that has accelerated in recent years. The attackers intended to kill foreigners, whom they shot and then hacked with sharp weapons, blaming them for hampering the progress of Islam”.


In Steinmetz, First ever IS terror attack in Malaysia, www.eturbonews.com (7/4/2016) it was noted that “It was a terror attack in Malaysia after all. Malaysian police said…they believed that there were Islamic State in Iraq and Syria (ISIS) elements that were behind the grenade blast last week at a nightspot in Puchong, Selangor which wounded eight people”.

Disclosing Social Media Accounts

In Nixon, Visitors to the U.S. May Be Asked for Social Media Information, nyti.ms/297wRAI (6/28/2016) it was noted that “The federal government has proposed adding a line to forms filled out by visitors to the United States that would ask them to voluntarily disclose their social media accounts, a step that it said would help in screening for ties to terrorism. Visitors entering the country under the Visa Waiver Program, which allows citizens of some countries to visit up to 90 days without a visa, would not be required to list their social media accounts, and the forms would not ask for passwords”.

Zika Killers; Bring On The Bats, Please

In Dollinger, Devouring 1,000 Mosquitoes and Hour, Bats are now Welcome Guests as Zika Fears Rise, nytimes.com (7/4/2016) it was noted that “As mosquito season heats up, bringing with it the threat of the West Nile and Zika viruses, one Lang Island town is taking an unorthodox approach: bats. The town, North Hempstead, has approved the construction of boxes that function as bat houses in several parks at attract more bats to the area”.

Cholera Epidemic In Haiti

In The Editorial Board, The Cholera Epidemic the U.N. Left Behind in Haiti, nytimes.com (7/6/2016) it was noted that “As Haitians were reeling from the devastating Jan. 12, 2010, earthquake, United Nations peacekeepers inadvertently compounded their troubles by bringing cholera to the island. Roughly 10,000 Haitians have died from the disease, which spreads easily in places with poor sanitation”

EU Promotes Passenger Ship Safety

In E.C. Maritime News, Better regulation on EU passenger ship safety legislation, ec.europa.eu/transport (6/10/2015) it was noted “The (European) Commission has today delivered the results of a fitness check carried out on EU legislation applicable to passenger ship safety. In the report, the Commission assesses whether safety standards for passenger ships sailing in EU waters are effective and efficient and identifies how they could be improved and simplified…The Commission envisages proposing a simplified regulatory framework for EU passenger ship safety…Passenger ships play an important role for the mobility of EU citizens. On average, it is estimated that more than 400 million passengers pass through EU ports every year. 120 million of them are transported between ports within the same Member State. EU legislation on passenger ship safety has been put I place over time and mainly in response to accidents such as the sinking of the Herald of Free Enterprise in 1987 and the Estonia in 1994, which resulted in the loss of 192 and 852 lives respectively… The fitness check confirmed that the EU passenger ship safety legislation performs well. Out of the 408 accidents registered for ships sailing between ports of the same Member State (It should be noted in this regard that the accidents involving the Norman Atlantic ferry in December 2014 and the Costa Concordia cruise ship in January 2015 involved ships operating internationally and designed in accordance with international requirements) during the last 4 years, only one has resulted in the fatality of a passenger”.

Airfarewatchdog’s Annual Travel Survey

In Flier favorites, airfare misconceptions and more, www.eturbonews.com (6/15/2016) it was noted that “Airfarewatchdog today announced the results of its annual air travel survey of more than 11,000 respondents. The majority of US travelers (68%) think domestic airlines are charging unfair ticket prices, despite the fact the airfares haven’t risen when adjusted for inflation. ‘Adjusted for inflation, airfares are actually lower than they were twenty or even ten years ago, on average’ says Airfarewatchdog founder and President George Hobica. ‘And keep in mind that the product is safer than it’s ever been, which means the value of airfare today-if people value safety- is higher than it’s ever been…Price continues to be the single most important factor when booking a flight, with nearly 90% saying it’s very important. This is ahead of Number of stops (72.2%), Cabin cleanliness (59.3%0, Flight attendant politeness (56.6%) and Onboard amenities (22.6%)”.

Be Careful Of Private Jets

In Krupnick, Start-Ups Selling Seats on Private Jets Don’t Always Make It, nytimes.com (6/13/2016) it was noted that “Dannel Schwartz was agonizing over his wife’s 60th birthday gift when she proposed an idea herself. ‘She said ‘You know, I don’t want to wait on another T.S.A. line. I want a private plane’” said Mr. Schwartz, a retired rabbi who splits time between Florida and Maine. ‘We laughed. Then comes this email about how it would cost $4 a flight’. Intrigued by the all-you-can-fly model offered by BlackJet, the couple in March paid $15,000 for a membership that would allow them cheap seats on private jets with empty seats, scheduling their first trip for the weekend of April 30. But it quickly became clear that the Schwartzes would not be making the flight to New York…A few days later came…an email from BlackJet (noting that)’Recent events have resulted in abruptly ceasing BlackJet operations’”.

Airline PreCheck Not So Fast

In Nixon, Trying to Get Past Airport Security Faster? Get in Line, nytim.ms/28PdHzl (6/22/2016) it was noted that “Officials at the (T.S.A.) thought they had the solution for long lines at airports: PreCheck, a program that allowed people to move through security without taking off their shoes or removing electronics from their luggage. It has not worked as planned. Customers who apply for the program, which requires a fee of $85 and a background check, say they continue to face long lines to obtain a PreCheck clearance. Such delays could grow worse because the number of people signing up for PreCheck has more than tripled in the last few months, climbing to 16,000 a day on average in May, agency officials said”.

Uber’s War Of Attrition

In Sorkin, Why Uber Keeps Raising Billions, nytimes.com (6/20/2016) it was noted that “If you add up all the money Uber has raised since it started in 2009-the idea was born when its founders became annoyed that they could not get a cab in Paris-the ride-hailing app company is on its way to amassing a colossal $15 billion. That’s real cash, not some funny-money, paper-based valuation. (That figure is $68 billion)… Consider this: When Amazon went public in 1997, it raised $54 million and was valued at $438 million. So what exactly is Uber doing with all that money? And what does it say about Uber-and the financial markets-that the company has turned most recently to selling the equivalent of junk bonds? Yes, Uber has to finance an all-out war to gain market share in China and India. But there is more to it than that: Uber’s money-grab is seemingly part of an unspoken strategy to mark its territory. Every time Uber raises another $1 billion, venture capital investors and others may find it less attractive to bank one of Uber’s many rivals: Didi Chuxing, Lyft, Gett, Halo, Juno. In other words, Uber’s fund-raising efforts have seemingly become part of the contest: It’s not just a rivalry over customers and drivers; it’s a war of attrition”.

Uber’s New Spokesman

In Miller, Eric Holder, Advocating for Uber, Questions Regulatory Mandates, law.com (6/16/2016) it was noted that “In one of the widest national efforts that Eric Holder Jr. has undertaken for a client since rejoining Covington & Burling last year, the former U.S. attorney general has written to lawmakers in three states on behalf of (Uber) urging them not to mandate fingerprinting for driver background checks”. This is good opening to the following Travel Law article.

Travel Law Article: The Johnston Complaint

The Complaint in Johnston v. Uber Technologies, Inc., alleges, inter alia:

The Plaintiff

“1. Plaintiff Todd Johnston is a citizen of Texas, domiciled in Austin, Texas. Plaintiff Johnston began working as an Uber Driver starting in May 2015. Plaintiff Johnston drove for Uber as his primary source of income until May 9, 2016, when Uber ‘shuttered operations’ in Austin. As a result of Uber’s mass lay off and/or closing of its Austin operations, Plaintiff Johnston’s employment with Uber has been terminated”.

Factual Allegations

“6. Uber is a San Francisco, California-based car service promoting itself as a transportation networking company (TNC). By means of its mobile application software (the Uber App) Uber provides a means to enable a person who seeks transportation to a destination via automobile (Riders) to be picked up by a nearby person who is willing to transport the Rider to his or her destination via automobile (Drivers).

“7. Uber is by far the largest ride-hailing platform and is arguably a monopoly in many of the markets it serves…Uber’s only other meaningful competitor is Lyft Inc….”.

“8. Uber began operating in Austin, Texas on or about June 3, 2014, and quickly became the dominant ride-hailing service in the Austin market”.

“9. As of May 2016, Uber officials asserted that Uber had over 10,000 Drivers in Austin”.

The Austin City Council

“10. On or about December 17, 2015, Austin City Council voted 9-2 to approve an Ordinance…requiring so-called ‘transportation network companies’ (including Uber and Lyft) to, among other things, subject their drivers to a fingerprint-based criminal background check. To afford affected companies ample time to become compliant, the Ordinance did not become effective until February 1, 2016, and both Uber and Lyft were given twelve (12) months, until February 1, 2017, to gradually phase their fleets into compliance”.

The Political Action Committee

“11. Instead of complying with the new Ordinance, Uber and Lyft created a political action committee (PAC) called Ridesharing Works for Austin. Uber and Lyft invested approximately $8.6 million into the most expensive political campaign in Austin history in an attempt to defeat the Ordinance. Upon information and belief, Defendant Uber gave significant amounts of money…to politically conservative right-wing PACs and individuals described as ‘experienced Republican operatives’ in efforts to both defeat the Ordinance and to personally ridicule and politically attack Austin City Council members in support of the Ordinance, including specifically Austin City Councilwoman and Democrat Ann Kitchen. For example, in November 2015, before the City Council took up the Ordinance, Uber debited ‘Kitchen’s Uber’ on its App, offering a mock horse-and-buggy ride service carrying the message that Kitchen wants to ‘impose 19th Century regulations on 21st Century technology’”.

Proposition 1

“12. Having secured the requisite 20,000 petition signatures, a public referendum occurred on Saturday May 7, 2016. Proposition 1 (to repeal the Ordinance and supported by Uber and Lyft) was rejected by Austin voters, 56% of whom voted against Proposition 1″.

Uber Shutters Operations

“13. On Monday May 9, 2016, at 8am, Uber indefinitely terminated its Austin operations. As explained in a statement distributed by email to Uber’s Austin Riders and Drivers ‘[disappointment does not begin to describe how we feel about shuttering operations in Austin”.

“14. The result is that thousands of Austin Uber Drivers have lost their jobs and incomes. As stated in the Huffington Post (ironically, Arianna Huffington sits on Uber’s Board of Directors), ‘the real ‘losers’ in this situation are the thousands of full-time drivers in Austin who have just been put out of work with less than 48 hours’ notice’. None of these Drivers was provided with adequate WARN Act notice of Uber’s decision to ‘shutter[] operations’ in Austin”.

Affected Employees

“15. The WARN Act contains its own sui generis definition of ‘affected employees’ who are entitled to WARN Act notice. Affected employees are defined as having a reasonable expectation of suffering an employment loss due to a plant closing or mass layoff…while an ‘employment loss’ means any one of the following: (A) termination without cause, voluntary departure or retirement; (B) a layoff exceeding 6 months; or © a reduction in work hours of more than 50 percent during each month of any 6-month period…”.

“16. Plaintiff and putative class members…are ‘affected employees’ because they suffered an ‘employment loss’ as a result of Uber’s ‘plant closing’ and/or ‘mass layoff’ in Austin, Texas”.

“17. Moreover, Plaintiff and putative class members are employees of Defendant Uber pursuant to common law…”.

Violations Of WARN Act

“21. (WARN Act) requires that certain employers give employees sixty (60) days’ notice prior to effectuating either a ‘plant closing’ or ‘mass layoff’…”.

“22. A violation of the WARN Act occurs when an employer does not provide the proper notice within the proper timeframe…”.

“24. The principal remedy for WARN Act violations is back pay for up to sixty (60) days for all eligible

“26. Defendant Uber’s Austin Drivers constitute ‘affected employees’ or ‘aggrieved employees’ pursuant to the WARN Act as well as employees pursuant to California law”.

“27. Defendant Uber’s, in its own words, ‘shuttering [of] operations in Austin’ constitutes a covered event under the WARN Act as either a ‘plant closing’ or a ‘mass layoff’ as those terms are defined in the Warn Act”.

Analysis Of Johnston Lawsuit

In Rozen, Ex-Uber, Lyft Drivers Must Identify Worksite to Win Lawsuits, law.com (6/16/2016) it was noted that “Labor lawyers on both the employer and employee side of the aisle predict some heavy lifting for Austin, Texas-based former Uber and Lyft drivers targeting the ride-hailing companies with twin class-action lawsuits…The odds are slim that the drivers will prevail on their claims, and not only because Uber and Lyft insist that all their drivers are independent contractors and therefore not covered as employees under federal law, according to lawyers familiar with this type of litigation…the former drivers must identify, according to (WARN) Act, the federal statute upon which they based their claims, a specific geographic location where Lyft or Uber drivers all showed up to report to work, the labor lawyers said”. Stay tuned.

Justice Dickerson has been writing about travel law for 39 years including his annually updated law books, Travel Law, Law Journal Press (2016) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2016), and over 400 legal articles many of which are available at nycourts.gov/courts/9jd/taxcertatd.shtml. Justice Dickerson is also the author of Class Actions: The Law of 50 States, Law Journal Press (2016). For additional travel law news and developments, especially in the member states of the EU, see IFTTA.org.

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