Is it safe? Uber’s media statements about safety are commercial speech

Greater Houston Transportation Company v. Uber Technologies,
Inc., — F.Supp.3d —-, No. 4.14-0941, 2015 WL 9660022 (S.D. Tex. Dec. 18,
2015)
 
[Yes, I know, but I couldn’t find a relevant Taxi Driver quote.]
 
Previous opinion discussed
earlier in this space
. Plaintiffs hold taxicab permits in Houston and San
Antonio.  They alleged that Uber falsely
advertised the safety of Uber rides compared to taxis, and the superiority of
Uber’s background check process compared to that of taxis. “On April 1, 2015,
one of Houston’s Uber drivers was arrested for allegedly sexually assaulting a
passenger. The Uber driver had passed an Uber background check despite having a
criminal record.”  Earlier claims related
to statements about insurance have been dismissed, except as relevant to the
alleged safety misrepresentations, because the Texas legislature passed a
relevant law.
 
Uber argued that the targeted statements were puffery.  The court agreed in part and disagreed in
part. Uber said it had the “SAFEST RIDE ON THE ROAD—Going the Distance to Put
People First.”  It continued that its
promise meant “setting the strictest safety standards possible, then working
hard to improve them every day. The specifics vary, depending upon what local
governments allow, but within each city we operate, we aim to go above and
beyond local requirements to ensure your comfort and security—and what we’re
doing in the U.S. is an example of our standards around the world.”  The first slogan was unmeasurable,
exaggerated and unreliable puffery.  The “specifics
vary” supporting language made clear that the overall safety claim was relative
to location, and its “aim to go above and beyond” language was aspirational,
not factual.  So too with the statement, “Wherever
you are around the world, Uber is committed to connecting you to the safest
ride on the road”: given its massive scope, it was clearly unverifiable,
exaggerated, and unreliable.  “BACKGROUND
CHECKS YOU CAN TRUST” was also a blanket generalization without further
explanation, and thus puffery.
 
Plaintiffs also challenged an October 2014 post on Uber’s
blog by former Rudolph Giuliani, headlined “UBER SETTING THE STANDARD FOR
SAFETY IN RIDESHARING: Posted by Rudolph Giuliani”: “I am pleased to say that
in my opinion and that of my safety consulting team at Giuliani Partners and
our partners at Guidepost Solutions, Uber is setting the safety standard in the
ride-sourcing industry.” The court found this a nonactionable statement of
opinion attributed to a third party.  The
post also said, “we believe [Uber’s background check process] represents a
substantial improvement over the existing safety standards in the personal hire
transportation world.” The court deemed it probable that a third party’s
opinion would be irrelevant to most people (really? not more relevant because
of security expertise?), and anyway opinions aren’t facts, but nonactionable
puffery.
 
Uber’s Head of Communications for North America, Lane
Kasselman, also made statements on Uber’s website:
 
All Uber ridesharing and livery
partners must go through a rigorous background check. The three-step screening
we’ve developed across the United States, which includes county, federal and
multi-state checks, has set a new standard…. We apply this comprehensive and
new industry standard consistently across all Uber products, including uberX.
Screening for safe drivers is just
the beginning of our safety efforts. Our process includes prospective and
regular checks of drivers’ motor vehicle records to ensure ongoing safe
driving. Unlike the taxi industry, our background checking process and
standards are consistent across the United States and often more rigorous than
what is required to become a taxi driver.
 
By contrast, this statement “was clearly intended to lead
and could lead a reasonable consumer to believe that an Uber ride is
objectively and measurably safer than a taxi ride.”  The court noted the comparative nature of the
statement and deemed “consistent” and “more rigorous” to be objective claims.
 
Plaintiffs also alleged misrepresentations about the “Safe
Rides Fee,” a $1 added fee on each ride that Uber claimed “supports continued
efforts to ensure the safest possible platform for Uber riders and drivers,
including an industry-leading background check process.” The court found that
this wasn’t puffery.  By stating that a
specific amount of money charged will be going towards Uber maintaining “the
safest possible platform,” the statement could lead consumers to believe that Uber
was specifically using this fee for safety improvements.  Uber also argued that the Safe Rides Fee
statements weren’t ads because they weren’t made for the purpose of influencing
consumers to buy Uber’s services: consumers are sent a link to that statement
after an Uber ride terminates. But the webpage would have been available to
consumers either before or after an Uber ride, just by going to Uber’s site.
 
Uber also made safety-related statements that were repeated
by journalists in news reports.  Were
these advertising and promotion? The court used Gordon & Breach (not needing to note that “commercial
competition” is probably gone after Lexmark,
given the competitive relationship between the parties). Uber argued that each
of its statements quoted in news articles are “inextricably intertwined with
the reporters’ coverage” in each article, citing Boule v. Hutton, 328 F.3d 84 (2d
Cir. 2003), which held that statements reported in a magazine weren’t
commercial advertising or promotion. 
Moreover, Uber argued that its statements weren’t commercial speech
because they did more than propose a commercial transaction.
 
Ony, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490
(2d Cir. 2013), found that “publication and dissemination of a scientific study
that had the effect of touting a company’s product is noncommercial speech and
was thereby immune from the false advertising provisions of the Lanham Act.”  However, Ony
treated the statements as potentially commercial; the Fifth Ciruit followed
suit in Eastman Chem. Co. v. PlastiPure, Inc., 775 F.3d 230 (5th Cir. 2014),
holding that disseminating scientific study results in a marketing campaign is
commercial speech.  The Lanham Act thus
applied more broadly than Uber claimed.
 
Here, the statements directly reached out to or addressed
consumers.  Statements reported in the
media included the claim that Uber “want[s] to assure all riders …”—a direct
quote from Uber’s website.  As in Eastman, “[e]ach of Uber’s statements
was issued by its corporate spokesperson or on Uber’s own official website as
part of a concerted campaign by the company in response to incidents that had
been publicized in the media.”  Three
were made by Uber’s Head of Communications for North America, one by Uber’s
Senior Communications Associate, and one by Uber’s Public Policy representative.  In context, this was commercial speech with a
coherent theme, as part of an effort by Uber “to influence consumers to buy
defendant’s goods or services….”  The
statements formed “a group of internally consistent statements in a manner
similar to an advertising campaign,” but using “sophisticated advertising
techniques… to transform traditional news media into a method of influencing
consumers.”  The court concluded:
 
In the modern age of hybrid
advertising and advertising in social media, Courts must remain vigilant in
order to separate commercial from non-commercial speech, regardless of the form
in which it was disseminated. Uber has previously argued for a paradigm shift
regarding its business model: asserting that it should be viewed as a software
company, not a transportation company. Likewise, here, the Court finds that
Uber’s disputed statements, although released in traditional news media,
require a paradigm shift, to evaluate the statements as commercial speech because
their predominant purpose is promotional and persuasive. The evolution in
business requires us to reevaluate the use of the media as advertising to
understand the commercial use and significant business benefits that many
companies derive from the media in today’s economy. The comments issued by
Uber’s communication executives demonstrate a careful, uniform, and
orchestrated message designed to encourage and facilitate the commercial use of
its product and service.
 
In addition, on a motion to dismiss, the court accepted that
the statements were “disseminated sufficiently to the relevant purchasing
public,” the final element of “advertising or promotion.”
 
Puffery: The statement of Uber’s Senior Communications
Associate read:
 
What I can tell you is that Uber
takes passenger safety very seriously. We work every day to connect riders with
the safest rides on the road and go above and beyond local requirements in
every city we operate. Uber only partners with drivers who pass an
industry-leading screening that includes a criminal background check at the
county, federal and multistate level going back as far as the law allows. We
also conduct ongoing reviews of drivers’ motor vehicle records during their
time as an Uber partner.
For more information on what makes
Uber the safest rides on the road, please see our website …
 
This statement contained specific, measurable and concrete
factual assertions that could be falsified: a factfinder could determine
whether Uber used the screening described and conducted ongoing reviews of
records.  Similarly, another statement
claiming “Our driver partner background checks are more thorough than those of
taxi [sic] in most cities and include county, state and federal screens going
back seven years” was falsifiable: it mentioned specific procedures and made an
explicit comparison to taxis.  Moreover,
the context made its seem more fact-like: it was released to news media because
of the public interest in Uber’s safety, meaning that “it would be more likely
to be viewed as objective and verifiable information by the public.”  Similar statements, “We’re confident that
every ride on the Uber platform is safer than a taxi,” and “We’re confident
that every ride on Uber is safer than a taxi,” were also potentially
quantifiable, despite the “we’re confident” intro.  “[S]tatements as to the comparative safety of
a product are specific and measurable, and thus frequently considered
actionable.”
 
Uber’s public policy representative also said: “Uber works
with Hirease to conduct stringent background checks going back seven years,
which all drivers must undergo and clear to partner with Uber. This driver [who
killed a child] had a clean background check when he became an Uber partner.”
These were objectively verifiable statements on which consumers could rely.  Similarly, responding to news that an Uber
driver in Chicago had been previously convicted of a felony but had not been
screened out by Uber’s background check process, Uber wrote: “[W]e have already
taken steps to prevent this from happening again, by expanding our background
check process to set new industry-leading standards … We are sincerely sorry
for this error, and want to assure all riders that we are taking the necessary steps
to fix it and build the safest option for consumers.”  The first part was factual, while the second
part was mere puffery.
 
For the same reasons, Texas common law unfair competition
claims survived.
 
Uber’s related motion for summary judgment on the surviving
claims failed.  Plaintiffs argued literal
falsity and introduced expert testimony and official reports creating genuine
issues of material fact on falsity/misleadingness.  For example, plaintiffs’ background check
expert, the former Deputy Director of the Department of Homeland Security,
Alonzo Pena, affirmed that background checks employing fingerprinting are
inherently superior to background checks that do not employ fingerprinting. “[N]o
statement of relative safety or of the superiority of Uber’s background checks
could be true if a trier of fact found that Uber employs fundamentally inferior
background check and safety practices.” 
Likewise, an official Houston report suggested that Uber’s background
check process fails to search across all states and counties, and leaves large
gaps where criminal background information would not be detected, including Delaware,
Massachusetts, South Dakota and Wyoming.
 
The court also didn’t rule on materiality; literal falsity
would allow a jury to find materiality without further evidence, and also I can’t
imagine that comparative safety is immaterial to consumers even if communicated
implicitly.
 
Uber, inexplicably, disputed
whether its advertised goods or services “travelled in interstate commerce.”  There was no disputed fact issue on the
interstate nexus here. Uber “use(s) smartphones, mobile communications, credit
card processing transactions, bank to bank payments, and transfers of funds to
receive payments from customers and provide payments to their employees and/or
drivers.” Uber’s challenged statements were published on the internet, reaching
across state lines to a national and international audience.  Uber’s own interstate background checking process showed that its business
involves interstate commerce, not to mention its interstate and international
operations.  (Well, that’s at least $400
of lawyer time wasted.)
 
Injury: injury to plaintiffs could be presumed from a false
or misleading comparative ad.
 
The court also refused to dismiss plaintiffs’ request for
permanent injunctive relief.  Irreparable
injury could be presumed from a showing of likely confusion, so that relief
remained on the table.  (This will be
cited by many a plaintiff!)

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One Response to Is it safe? Uber’s media statements about safety are commercial speech

  1. Jennifer Condie says:

    There is Regulatory Capture, but Uber right off the bat mastered the art of #MediaCapture. Serious news outlets like the LA Times, NY Times, and Wall Street Journal would print every word that came out of an Uber reps mouth with ZERO fact checking(ex; “600 murder rapist cabbies passed a Taxi fingerprint check in California yet failed Uber’s background screen in Cali” to spin LAX murder rapist UBER drivers that WAS fact checked. Every single News outlet and TV station reported Ubers PR spin claim as fact. Yet not a single Taxi drivers name was ever released nor was Uber’s claim fact checked or proven as legitimate.

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