SEIBERT BAUTISTA PRESS RELEASE (For Imlnediate Release) September 25' 2015 TAXI SUES THE CALIFORNIA PUBLIC UTILITIES COMMISSION FOR EQUAL PROTECTION VIOLATIONS San Francisco's Taxi today announced that they have filed a federal lawsuit against the California Public Utilities Commission (CPUCJ for the unequal manner in which they are regulating erhajl taxi companies. The lawsuit draws attention to the fact that when these new taxi services were launched they were immediately shut down by regulators for operating illegal and unlicensed taxicabs. At the time, the claim that these new services were something other than any demand taxi services was rejected as there was no difference between requesting a taxi by telephone or with an application on a stnartphone. The CPUC thereafter, in negotiationsr allowed these services to obtain a state license that they have since used to circumvent all established municipal taxi mlesl Taxi brings this lawsuit not to stifle competition or technological innovations but to make sure all onrdemand taxi services ate treated equally under the law. Taxi: uit seeks injunctive and declaratory relief against the CPUC for the CPUC's assertion of jurisdiction over erhail taxi companies which has prevented municipal agencies from applying the same rules to erhail taxi companies that are applied to traditional taxi companies resulting in an unfair twortier system of regulation that has created an unlevel playing field tor onrdemand transportation companies. Hansu Kim President of Taxir said "Calling these new taxi services 'ridersharing' is the height ofironyl it's a type of Orwellian doublespeak intended to make people feel good about theml I mean, who is against sharing? But there isn't any sharing going on. These are venture capital backed commercial businesses trying to skirt regulatory requirements. This lawsuit is intended to make sure everyone gets to compete while playing by the same rules" Press Contact: Hansu Kim President Taxi Shannon Seibert Seibert 8L Bautista SEIBERT & BAUTISTA _______________________________________________________ 100 PINE STREET ● SUITE 1250 ● SAN FRANCISCO, CALIFORNIA 94111 TELEPHONE 415.954.9455 ● FACSIMILE 415.494.8115 ADDENDUM TO PRESS RELEASE WHAT THE CPUC DOES NOT REQUIRE OF E-HAIL TAXI COMPANIES:                       The CPUC does not regulate the number of e-hail taxis on the road. The CPUC does not regulate the prices that e-hail taxis can charge passengers and permits unlimited surge pricing. The CPUC does not require e-hail taxi companies to associate a “medallion” – which costs $250,000 in San Francisco – with each vehicle on the road. The CPUC does not require e-hail taxi companies to provide workers’ compensation insurance for all e-hail taxi drivers. The CPUC does not require e-hail taxi companies to include low-emissions vehicles in their fleet. The CPUC does not limit the age or mileage of vehicles offered as e-hail taxis. The CPUC does not require e-hail taxi companies to provide wheelchair-accessible vehicles. The CPUC does not require e-hail taxi drivers to transport service animals. The CPUC does not require e-hail taxi drivers to accept Paratransit Debit Cards. The CPUC does not require e-hail taxi companies to provide in-vehicle equipment for the visually impaired. The CPUC does not require e-hail taxis to begin and end their shift at the physical location of the e-hail taxi company. The CPUC does not require e-hail taxis to be painted with a distinguishable color and trade dress. The CPUC does not require e-hail taxis to be equipped with security cameras. The CPUC does not require e-hail taxi companies to provide a lost and found service for passengers. The CPUC does not limit the number of consecutive hours an e-hail taxi driver can drive. The CPUC does not require Department of Justice background checks or Live Scan fingerprinting for e-hail taxi drivers. The CPUC does not require e-hail taxi drivers to be commercially licensed. The CPUC does not require e-hail taxi drivers to obtain a permit from the CPUC before driving. The CPUC does not require e-hail taxi drivers to complete a certified driver training course. The CPUC does not require e-hail taxi companies to provide a telephone dispatch service to make transportation available to those without a “smartphone” or “tablet.” The CPUC does not require all e-hail taxis to operate each and every day. The CPUC does not require e-hail taxi drivers to pick up passengers without regard to race, gender, disability, economic status, or geographic location. WHAT SAN FRANCISCO REQUIRES OF TAXI COMPANIES:                         San Francisco limits the number of taxis on the road. San Francisco regulates the prices that taxis can charge passengers and prohibits surge pricing. San Francisco requires taxi companies to associate a “medallion” – which costs $250,000 in San Francisco – with each vehicle on the road. San Francisco requires taxi companies to provide workers’ compensation insurance for all taxi drivers. San Francisco requires taxi companies to maintain a fleet of at least 90% low-emissions clear air vehicles. San Francisco limits the age or mileage of vehicles offered as taxis. San Francisco requires taxi companies to provide wheelchair-accessible vehicles. San Francisco requires taxi drivers to transport service animals. San Francisco requires taxi drivers to accept Paratransit Debit Cards. San Francisco requires taxi companies to provide in-vehicle equipment for the visually impaired. San Francisco requires all taxis to begin and end their shift at the physical location of the taxi company. San Francisco requires taxis to be painted with a distinguishable color and trade dress. San Francisco requires taxis to be equipped with security cameras. San Francisco requires taxi companies to provide a lost and found service for passengers. San Francisco limits the number of consecutive hours a taxi driver can drive. San Francisco requires Department of Justice background checks for taxi drivers, including Live Scan fingerprinting. San Francisco requires taxi drivers to be commercially licensed. San Francisco requires taxi drivers to obtain a permit from the city before driving. San Francisco requires taxi drivers to complete a certified driver training course. San Francisco requires taxi companies to provide a telephone dispatch service to make transportation available to those without a “smartphone” or “tablet.” San Francisco requires all taxis to operate each and every day. San Francisco requires taxi drivers to pick up passengers without regard to race, gender, disability, economic status, or geographic location. Shannon Seibefl (CBN 240317) Joe Baulism CBN 255708) SEBERT 81 BAUTISTA 100 Pine SlreeL Ste. 1250 San Francisco, CA 94111 Anorneys for Plnimiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION CASE NO.: DESOTO CAB COMPANY, d/b/a COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF Plaintiff' vs. MICHAEL PICKER: MIKE FLORIO: CATHERINE J.K. SANDOVAL: CARLA Ji PETERMAN: LIANE M1 in their official as Commissioners ohhe Public UliliKiES Commission ohhe Slaie of California: and DOES Khrough 20, inclusive Defendants COMPLAINT 1 1 2 Plaintiff DeSoto Cab Company, Inc. d/b/a Flywheel Taxi hereby complains against Defendants, and each of them, and alleges as follows. 3 4 PARTIES 1. Plaintiff DeSoto Cab Company, Inc. d/b/a Flywheel Taxi (“Flywheel Taxi”) is a 5 California corporation. Flywheel Taxi is a taxi company that maintains its headquarters and principal 6 place of business in the City and County of San Francisco, California. 7 2. Defendants Michael Picker, Mike Florio, Catherine J.K. Sandoval, Carla J. Peterman, 8 and Liane M. Randolph are Commissioners of the California Public Utilities Commission 9 (“CPUC”). The CPUC is an agency of the State of California that maintains its principal offices at 10 505 Van Ness Avenue, San Francisco, California 94102. The Commissioners are sued in their 11 official capacities only. 12 3. Flywheel Taxi is unaware of the identity of those Defendants sued as Does 1 through 13 20, inclusive, and they are therefore sued under those fictitious names. Flywheel Taxi is informed 14 and believes, and thereon alleges, that it is entitled to the relief requested in this complaint from 15 these Doe defendants and will seek leave of this Court to amend this complaint to reflect these 16 defendants’ true names and identities when ascertained. 17 4. Flywheel Taxi is informed and believes and thereon alleges that each of the 18 defendants named herein was the agent, employee or representative of each of the remaining 19 defendants and in doing the things mentioned herein, was acting in the course and scope of such 20 agency and employment. Flywheel Taxi further alleges that in doing the acts or omissions 21 complained of herein, Defendants, and each of them, acted or omitted to act in concert as agents of 22 and/or on behalf of the other defendants named herein. VENUE AND JURISDICTION 23 24 5. Jurisdiction is conferred upon this Court by 28 U.S.C. §§ 1331 and 1343 and 42 U.S.C. § 1983. Plaintiff’s claims arise under the Constitution and law of the United States, including 25 the Due Process Clauses of the Fifth and Fourteenth Amendments to the United States Constitution. 26 6. Venue is proper in this district pursuant to 28 U.S.C. § 1391. Defendants are sued in 27 their official capacities as Commissioners of the CPUC. The CPUC is located in California and 28 _________________________________________________________________________________________________ COMPLAINT -2- 1 operates under the laws of the State of California. The CPUC conducts its proceedings in this 2 District, and a substantial part of the events or omissions giving rise to the dispute occurred in this 3 District. INTRADISTRICT ASSIGNMENT 4 7. 5 Pursuant to Civil Local Rules 3-5(b) and 3-2(c), this action arises in the San Francisco 6 Division of this Court in that the events complained of herein include actions taken by the 7 Commissioners of the California Public Utilities Commission in the City and County of San 8 Francisco. INCORPORATION OF ALLEGATIONS 9 8. 10 11 12 action to the extent necessary or useful to clarify and complete each stated cause of action, to avoid repetition and redundancy. FACTS COMMON TO MORE THAN ONE CAUSE OF ACTION 13 9. 14 15 16 17 18 All of the allegations in this Complaint are hereby incorporated into each cause of Prior to September 23, 2013, in California there existed three types of regulated private for-hire ground transportation services: passenger stage corporations (“PSCs”), which are shuttles driven by commercially licensed drivers; transportation charter parties (“TCPs”), which are limousines and luxury sedans driven by commercially licensed drivers; and on-demand transportation carriers, otherwise known as taxis, which are driven by specially permitted drivers. 10. The CPUC has jurisdiction over and regulates charter-party carriers of passengers in 19 California. PSCs and TCPs are charter-party carriers of passengers (“passenger carriers”). 20 11. PSCs provide shuttle transportation service to the general public on fixed routes or 21 through scheduled service. 22 12. TCPs are hired on a prearranged basis for the exclusive use of an individual or group. 13. Charter-party carriers of passengers are required to operate on a prearranged basis. To 23 24 meet this definition, California Public Utilities Code § 5353 requires that the transportation of the 25 prospective passenger must be arranged with the charter-party carrier either by written contract or 26 telephone. 27 //// 28 _________________________________________________________________________________________________ COMPLAINT -3- 1 14. On-demand transportation services are generally referred to as taxi services in 2 California. Taxis provide an on-demand transportation service that is requested through smartphone 3 applications, telephone dispatch, and/or street hails. 4 15. The CPUC does not have jurisdiction over and cannot regulate on-demand 5 transportation services in California. Pursuant to California Government Code § 53075.5, city and 6 county governments have exclusive jurisdiction over taxi transportation services in California. 7 16. Flywheel Taxi is a taxi company that operates on-demand transportation services in 8 the City and County of San Francisco and is regulated by the City and County of San Francisco by 9 the San Francisco Municipal Transportation Agency ("SFMTA"). 10 11 12 17. In 2010, Uber began operations in California as a charter-party carrier with vehicles licensed through the CPUC as TCP vehicles. 18. In early 2012, Lyft and Sidecar began operation of on-demand transportation services 13 in California. In July 2012, Uber joined Lyft and Sidecar in offering on-demand transportation 14 services in California with its UberX line of transportation services. 15 19. UberX, Lyft and Sidecar provide on-demand transportation services that are 16 requested through smartphone applications and/or street hails. UberX, Lyft and Sidecar are not 17 charter party carriers and do not operate on a pre-arranged basis. As such, UberX, Lyft and Sidecar 18 do not fall within the jurisdiction of the CPUC. 19 20. The transportation services offered through UberX, Lyft, and Sidecar since 2012 are 20 on-demand de facto taxi services that are subject to the exclusive jurisdiction of city and county 21 governments in California. 22 23 24 21. In 2012, efforts were made by a variety of city and county governments throughout California to exercise jurisdiction over UberX, Lyft and Sidecar. 22. Nevertheless, on December 20, 2012, the CPUC instituted a rulemaking process to 25 assess public safety risks created by the operation of on-demand transportation services offered by 26 companies such as Uber, Lyft, and Sidecar. The CPUC did not provide notice to any taxi companies 27 in the State of California, including Flywheel Taxi, of the initiation of the rulemaking process. 28 _________________________________________________________________________________________________ COMPLAINT -4- 1 23. On September 23, 2013, the CPUC issued a Decision Adopting Rules and 2 Regulations to Protect Public Safety While Allowing New Entrants to the Transportation Industry 3 (the “Decision”). 4 24. In the Decision, the CPUC improperly asserted jurisdiction over de facto taxi services 5 such as Uber, Lyft, and Sidecar and created a new category, called “Transportation Network 6 Companies,” for the de facto taxi companies. 7 25. By occupying the field, the CPUC has prevented city and county agencies in 8 California generally, and in the City and County of San Francisco specifically, from regulating the 9 on-demand transportation services provided by de facto taxi companies. 10 26. In the Decision, the CPUC promulgated rules and regulations to govern the provision 11 of on-demand transportation services by de facto taxi companies. The regulations adopted by the 12 CPUC include a requirement of insurance coverage but only while a passenger is in the vehicle, 13 ineffective background checks on drivers, and a driver “training” program left entirely to the 14 companies. The CPUC did not adopt any regulations requiring the de facto taxi companies to 15 comply with the Americans with Disabilities Act, no requirements for anti-discrimination or 16 harassment training, and no requirements for the provision of workers’ compensation protections for 17 drivers. Further, the CPUC placed no restriction on the number of vehicles that can be licensed as 18 TNCs or the rates that de facto taxicab companies can charge the public for transportation services. 19 27. In contrast, the regulatory requirements of traditional taxi companies in San 20 Francisco, including Flywheel Taxi, require that the companies provide $1 million in liability 21 insurance that covers the car, driver, and third parties at all times, that they provide ADA-accessible 22 vehicles, that the companies provide workers’ compensation coverage for all drivers, that they 23 maintain a fleet of at least 90 percent fuel-efficient vehicles, that they limit the number of vehicles 24 available on the street, that vehicles may only pick up passengers within the City and County of San 25 Francisco, that all vehicles contain metered devices that are certified and approved by the State of 26 California Department of Agriculture’s Division of Measurement Standards. Additionally, the rates 27 that may be charged for transportation services provided by taxicab companies is rigorously 28 regulated and controlled by city and county governments. _________________________________________________________________________________________________ COMPLAINT -5- 1 28. Drivers of traditional on-demand taxi services are further required to be commercially 2 licensed, to submit to a thorough background check, to accept all ride requests without 3 discrimination, to submit to a rigorous training course administered by an approved third-party 4 institution, and to comply with price controls put in place by city and county agencies. 5 29. The regulatory framework and requirements placed on traditional taxi services, 6 including Flywheel Taxi, by city and county governments are far more stringent and protective of 7 the public than the regulatory framework and requirements placed upon de facto taxi companies by 8 the CPUC. 9 30. The regulatory framework and requirements placed on traditional taxi services by city 10 and county governments are far more costly to provide and maintain than the regulatory framework 11 and requirements placed upon de facto taxi companies by the CPUC. 12 31. Prior to issuing the Decision, the CPUC lacked the leadership, ability or resources to 13 adequately enforce the regulations that were previously enacted with regard to PSCs and TCPs in 14 California. The Commission was aware of these deficiencies and its inability or unwillingness to 15 enforce regulations before claiming jurisdiction over de facto taxi companies. 16 32. Prior to issuing the Decision, the CPUC was aware of the regulatory efforts made by 17 city and county governments throughout California and, specifically, by the SFMTA in San 18 Francisco. The CPUC knew the regulatory standards adopted by city and county governments in 19 California, including the SFMTA, would be more stringent, more protective of the public, and more 20 effectively enforced than the regulatory framework created by the Decision. 21 33. By occupying the field, the CPUC has prevented city and county agencies in 22 California generally, and in the City and County of San Francisco specifically, from regulating the 23 de facto taxi services. 24 34. The CPUC acted capriciously and arbitrarily and without justification by claiming 25 jurisdiction over and adopting new regulations for de facto taxi companies while failing and refusing 26 to exercise jurisdiction over and regulate traditional taxi companies. 27 28 _________________________________________________________________________________________________ COMPLAINT -6- 1 35. The CPUC’s actions have led to disparate treatment of de facto taxi companies and 2 allows them to operate without regard of the rules and regulations that govern all other on-demand 3 transportation services and without incurring the associated costs of compliance. 4 5 36. CPUC is fundamentally unfair and unconstitutional. 6 FIRST CAUSE OF ACTION EQUAL PROTECTION (U.S. CONST., AMEND. XIV; 42 U.S.C. § 1983) (Against all Defendants) 7 8 9 10 11 The unequal treatment of Flywheel Taxi and the de facto taxi companies by the 37. Flywheel Taxi is entitled to equal protection of the laws pursuant to the Fourteenth Amendment of the United States Constitution. 38. The CPUC’s actions in claiming jurisdiction over some, but not all, on-demand 12 transportation services in California has deprived Flywheel Taxi of the equal protection of the laws 13 by allowing de facto taxi services to operate free from the regulations with which all other on- 14 demand transportation services must comply. 15 16 17 18 19 39. The CPUC, by adopting exceedingly lenient regulations with regard to de facto taxi services while failing to do the same with regard to all on-demand ground transportation services has deprived Flywheel Taxi of equal protection of the law, in violation of the Fourteenth Amendment to the United States Constitution. 40. The CPUC, by failing to adopt rigorous regulations with regard to de facto taxi services has denied Flywheel Taxi equal protection of the law, in violation of the Fourteenth 20 Amendment to the United States Constitution. 21 41. The CPUC, by failing to enforce existing regulations with regard to de facto taxi 22 services has denied Flywheel Taxi equal protection of the law, in violation of the Fourteenth 23 24 25 Amendment to the United States Constitution. 42. The CPUC had no rational justification for claiming jurisdiction over de facto taxi services, for adopting exceedingly lenient regulations, for failing to adopt regulations, and for failing 26 to enforce regulations of de facto taxi companies. The CPUC’s decision to exercise jurisdiction over 27 de facto taxi services, thereby occupying the field and preventing city and county agencies from 28 _________________________________________________________________________________________________ COMPLAINT -7- 1 regulating the services, was not rationally related to any legitimate governmental interest and has 2 resulted in an absence of measures to ensure public safety. 3 43. Flywheel Taxi is entitled to discovery to determine whether the CPUC’s disparate 4 treatment of de facto taxi services and all other on-demand transportation services was motivated by 5 special animus toward Flywheel Taxi or the taxi industry as a whole and/or special favoritism toward 6 the de facto taxi companies for the purposes of determining whether the CPUC has acted with the 7 intent to discriminate against the taxi industry and/or in favor the de facto taxi companies. 8 9 10 44. declared unlawful, to have the CPUC’s claimed jurisdiction vacated, and to have the determination of regulation of de facto taxi companies remanded to city and county officials for determination. SECOND CAUSE OF ACTION DUE PROCESS (U.S. CONST., AMENDS. V, XIV; 42 U.S.C. § 1983) (Against all Defendants) 11 12 13 14 15 16 Flywheel Taxi is therefore entitled to have the CPUC’s September 23, 2013 Decision 45. Flywheel Taxi was entitled to due process of law in connection with the CPUC’s establishment of jurisdiction over on-demand transportation services through the Decision. 46. The CPUC did not provide notice to Flywheel Taxi, or to any other taxi companies, of its intent to establish jurisdiction and occupy the regulatory field over some, but not all, on-demand 17 transportation services. 18 47. The CPUC’s failure to provide notice to Flywheel Taxi of its intent to establish 19 jurisdiction and occupy the regulatory field with regard to de facto taxi companies deprived Flywheel 20 21 22 23 Taxi of the opportunity to respond to the CPUC’s claimed jurisdiction prior to the CPUC’s actions. 48. The CPUC’s establishment of jurisdiction over de facto taxi companies without notice to Flywheel Taxi has deprived Flywheel Taxi of property in the form of lost profits and income. 49. The CPUC’s establishment of jurisdiction over de facto taxi companies without 24 developing a proper evidentiary record has violated the due process rights of Flywheel Taxi and of all 25 taxi companies in California. 26 27 28 _________________________________________________________________________________________________ COMPLAINT -8- 1 50. The CPUC’s establishment of jurisdiction over de facto taxi companies based on an 2 arbitrary and incorrect interpretation of the term “prearranged” has deprived Flywheel Taxi of 3 property in the form of lost profits and income. 4 51. Flywheel Taxi is therefore entitled to have the CPUC’s September 23, 2013 Decision 5 declared unlawful, to have the CPUC’s claimed jurisdiction vacated, and to have the determination of 6 regulation of de facto taxi companies remanded to city and county officials for determination. PRAYER FOR RELIEF 7 8 WHEREFORE, Flywheel Taxi prays for judgment on all causes of action as follows: 9 1. 10 11 Declare that the CPUC does not have jurisdiction over companies providing on- demand transportation services, including de facto taxi companies Uber, Lyft, and Sidecar; 2. Declare that by exercising jurisdiction over de facto taxi services while declining to 12 exercise jurisdiction over other on-demand transportation services, the CPUC has violated Flywheel 13 Taxi’s equal protection rights, in violation of the Fourteenth Amendment to the United States 14 Constitution; 15 3. Declare that by implementing lenient regulations for de facto taxi services while 16 failing and refusing to implement similar regulations for other on-demand transportation services, the 17 CPUC has violated Flywheel Taxi’s equal protection rights, in violation of the Fourteenth 18 Amendment to the United States Constitution; 19 20 21 22 23 24 25 26 4. Declare that by issuing the September 23, 2013 Decision, the CPUC violated Flywheel Taxi’s due process rights, in violation of the Fifth and Fourteenth Amendments to the United States Constitution; 5. Vacate the September 23, 2013 Decision in which the CPUC created a category of Transportation Network Carriers and claimed jurisdiction over all de facto taxi companies in California; 6. Enjoin the CPUC from exercising or attempting to exercise jurisdiction over companies providing on-demand transportation services, including de facto taxi companies Uber, Lyft, and Sidecar; 27 28 _________________________________________________________________________________________________ COMPLAINT -9- 1 2 3 7. Declare that all de facto taxi companies in California, including Uber, Lyft, and Sidecar, must be regulated as taxi transportation services by city and county authorities; 8. Award Flywheel Taxi its costs of prosecuting this action, including its attorneys’ 4 fees, pursuant to 42 U.S.C. § 1988. 5 Dated: September 23, 2015 SEIBERT & BAUTISTA 6 7 8 9 /s/ Shannon Seibert Shannon Seibert Attorneys for Plaintiff 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _________________________________________________________________________________________________ COMPLAINT - 10 -