Ride-sharing app Uber Technologies Inc. has been forced to suspend operations in Nevada after a preliminary court order.
A Washoe Country District Court granted the Nevada Transportation Authority’s request for an injunction, saying the company’s refusal to comply with state laws on carrying passengers could threaten public safety, Reuters reported.
Uber spokeswoman Eva Behrend said that the court’s decision was “unfortunate” and would threaten 1,000 jobs in the state. She added that “we remain committed to working with Nevada’s leaders to create a permanent regulatory framework that affords Nevadans the flexibility and innovation offered by Uber.
The company has gathered nearly 18,000 signatures in an online petition to support its activities in the state.
Uber’s lawyers have been arguing that the company is a technology company, not a taxi company, and that therefore it isn’t covered by state law on passenger transportation. But the Las Vegas Review Journal reported Chief Deputy Attorney General Gina Session as saying that Uber is operating in all ways like a common motor carrier and so should be subject to the NTA’s regulations.
The company has lost similar battles in Europe and Asia– usually instigated by the established taxi companies that Uber is challenging–and was also banned last week by Toronto. However, this is the first time that a U.S. state has banned its operations, and the loss is substantial, given the allure of the Las Vegas taxi market.
The ban comes against a background of rising concern about the company’s business practices and culture. Public debate exploded last week after it was reported that a senior executive, Emil Michael, had advocated the use of investigators to dig dirt on journalists critical of the company. The ensuing PR storm forced Uber chief executive Travis Kalanick into a lengthy apology on Twitter.
At the same time, Uber is reportedly seeking a new round of funding to finance its international expansion. Bloomberg said the new round would value the company at between $35 and $40 billion, implying that its valuation had doubled in the six months since its last funding round.