Ridesharing Company Uber Banned from Operating in LAX

Joe Goldman |

Uber drivers began receiving citations at LAX thanks to pressure from the taxi industry.

Popular ridesharing service uberX has stopped picking up passengers from LAX because some of its drivers are receiving citations from local authorities. This is just the latest hurdle in Uber's relatively long history of legal objections.

Uber is a new company that connects private car owners with individuals seeking a ride. Smartphone users simply open the Uber app, select a towncar, SUV, or economy car, and Uber will send a car usually in around 10-15 minutes or less to the person’s exact location. Uber also stores credit card information so transactions are cashless and tips are included in the rate.

Just about everyone is happy with Uber. Consumers love the convenience and affordability, drivers earn more business, and Uber is making money hand over fist. However, taxi drivers are furious because ridesharing companies like Uber, Lyft, and Sidecar are eating away at their business. Therefore, they are pressuring lawmakers to ban ridesharers, or at least make business significantly more difficult for them.

Drivers of uberX, which is Uber’s taxi-equivalent, started receiving citations from local authorities for failing to have proper permits. The action has compelled uberX to stop making pickups at LAX, although Uber Black and SUV cars are still operating.

“Although we look forward to working with the authorities to resolve these issues quickly, this unwarranted action by authorities to punish drivers and riders cannot continue. That’s why we’re temporarily halting uberX pick ups at LAX effective immediately,” said an Uber spokesperson via Blogspot.

Uber has previously received cease and desist orders from local municipalities, but it hasn’t significantly effected their business. The company is legally allowed to operate nationally, but it will in all likelihood continue to face local battles from taxi drivers and authorities.

Uber is still on track for $125 million in revenue this year, a number that is growing quickly. Consequently, the company earned a $3.5 billion valuation by All Things D in 2013.

Travelers, consumers, and techies are all hoping that Los Angeles and other cities begin to recognize the value of Uber. Their methods are atypical but innovative, and ridesharers are revolutionizing the transportation industry in a positive way.

For ridesharer comparisons, their legal situations, and the future of transportation on demand, check out Equities.com’s previous article on the ridesharing industry.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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