Uber highlights legal tensions for digital apps

Uber, a popular app that allows you to request a ride via your smartphone, has rattled regulators recently and underscores the new legal gray area that many quickly evolving digital app makers are flirting with. In some cities, Uber has faced lawsuits from traditional cab companies that argue the company's pricing policies, lack of middle man and avoidance of registering with local governments before starting operations actually put consumer's at risk. Uber faced its first serious setback in New York in October, where it was to stop its yellow cab operation because of what the city said were exclusive contracts with payment processors. Uber's high price for fares ("surge pricing") during the troubles of Hurricane Sandy also faced backlash from the government, which called such practices "illegal price gauging".

An NYT article highlights this case studies significance as the digital world develops: "The battle between Uber and city governments underscores the tension between lawmakers and technology companies at a time when Web sites and mobile apps can outmaneuver old rules." Regulators say new laws are required to protect consumers from being harmed by apps like Uber. But, like so many apps that pose a sometimes conflict between managing the user benefit and the legal frontier, Uber is generally widely loved by its users who state being willing to pay extra for the app's services, particularly in locales where cabs are scarce.