Philadelphia Magazine: Taxi Co. Sues Uber

Philly Cab Company Sues Uber for “Destroying” Taxi Business

By Victor Fiorillo, January 11, 2016

Back in 1991, Boris and Alla Kautsky left their home in Ukraine and came to the United States as refugees in search of the American dream, eventually settling in Philadelphia where they started their own cab company. But 25 years after arriving in the U.S., they now say that their dream has become a nightmare, and they place the blame squarely on Uber. Through their cab company CoachTrans, the Kautskys have filed a federal lawsuit in Philadelphia against the transportation technology company seeking at least $1.5 million in damages.

Over the years, CoachTrans purchased three taxicab medallions, which are required by law for anyone who wants to operate a cab in Philadelphia. Today, the company owns three cabs, and Boris Kautsky drives one, working 14-hour days, according to the lawsuit.

Many medallion owners, the Kautskys included, saw the medallions as an investment, and not long ago, those medallions were selling for $500,000 each. The Kautskys had hoped to retire by selling those three medallions for well over $1 million total, which wouldn’t have been too shabby a nest egg for anyone — let alone former refugees.

But then Uber happened.

Thanks to the wildly popular service — especially the cheaper-than-a-cab UberX option — the taxicab business in Philadelphia has tanked, and as a result, the value of those medallions has plummeted right along with it. Last year, three medallions sold for just $80,000 each.

It would be easy to chalk the suit up to sour grapes. After all, competition is the American way. But, as the suit rightly points out, UberX is absolutely illegal in Philadelphia, even though the service operates with near-impunity.

“There is a distinction between one business making another obsolete through competition and Uber’s conduct here, because Uber is operating outside the law,” says Connecticut-based lawyer Sergei Lemberg, who is both the Katusky’s lawyer and their son-in-law. “Many many small business owners are being crushed by the illegal operations of Uber. The way Uber has positioned the public discussion is that there is this new technology on the one hand and then there are these fat cats [the cab owners] on the other hand. Well, maybe there are fat cats out there, but my client is not one of them.”

According to the lawsuit, CoachTrans sales are down 30-percent over the last year. “While [CoachTrans] does not believe that its business should be completely immune from outside competition, Uber’s outright disregard for Pennsylvania State law has given it an extremely unfair advantage,” reads the suit. “Uber has disrupted and destroyed the market for regulated taxi medallions in Philadelphia by creating an illegal black market for taxi services.”

Original story: At the Philadelphia Magazine

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