A competitor's false advertising lawsuit against Uber Technologies crashed when a federal court judge in New York found the challenged claims to be nonactionable puffery.
Two black car companies, XYZ Two Way Radio Service and Elite Limousine Plus, filed a Lanham Act suit against Uber Technologies, alleging that the ride service company overstated claims about its safety and service. The challenged statements appeared on Uber's website, including "From the moment you request a ride to the moment you arrive, the Uber experience has been designed from the ground up with your safety in mind" and "We believe deeply that, alongside our driver partners, we have built the safest transportation option … around the world."
The claims also emphasized the strength of Uber's background checks, with claims that the company used "Background safety checks you can trust" and that Uber's checks are "often more rigorous than what is required to become a taxi driver."
Uber moved to dismiss the suit, arguing that the advertising constituted puffery. The court agreed.
"No doubt, these statements are intended to convey the impression that Uber takes the safety of its passengers seriously," U.S. District Court Judge Frederic Block wrote. "But they do so in terms that clearly fall within one or more of the accepted definitions of puffery. The overall tone is boastful and self-congratulatory. Many of the statements are couched in aspirational terms—'committed to,' 'aim to,' 'believe deeply'—that cannot be proven true or false. Others are vague and hyperbolic; if Uber literally set the 'strictest safety standards possible' at the outset, it could not 'improve them every day.' In sum, the Court concludes that the challenged statements cannot reasonably be understood as specific representations of objective facts."
The black car companies urged the court to take a close look at the background check claims, arguing that Uber's process could not be "more rigorous" than that of a taxi driver background check because the company does not require fingerprints, a medical clearance, or a drug test, as mandated by New York City's taxi regulator.
However, Judge Block again disagreed. Uber's statement was qualified by the term "often," he pointed out, and referred to the basic background check conducted on drivers across the country, with a proviso on the website that the "specifics vary depending on what local governments allow" for background checks.
As for Uber's claims about its relationship with partners, the court did not find a problem with the company's language even though Uber has gone to great lengths to treat its drivers as independent contractors, not employees. Nothing in the defendant's statements suggested that customers understand the use of "partners" as a legal term of art, Judge Block wrote. In granting Uber's motion to dismiss the suit, the court noted that "the term 'partner,' as used on Uber's website, reads like euphemistic adspeak devoid of any inherent meaning."
To read the memorandum and order in XYZ Two Way Radio Service, Inc. v. Uber Technologies, Inc., click here.
Why it matters: Judge Block recognized that the arrival of Uber on the New York City ground transportation market resulted in upheaval for yellow cabs and black cars in the city, but put his foot on the brakes of the plaintiffs' Lanham Act suit. "The plaintiffs have every right to demand that the competition they face from Uber be fair," the court said. "However … the Court concludes that they have failed to allege that Uber made any statements that constitute false advertising."