Uber Eats' operations in Little Rock should be shut down until the company complies with city code and obtains an advertising and promotion tax permit, the Little Rock Advertising and Promotion Commission said in a lawsuit filed Tuesday.
Filed in Pulaski County Circuit Court, the lawsuit said Uber Eats first signed up with Little Rock restaurants for its delivery services on Feb. 21, 2018. Uber Eats has refused requests that it get the permit, the lawsuit said.
Gretchen Hall, president and chief executive officer of the Little Rock Convention and Visitors Bureau, said other similar companies operating in Little Rock have obtained the A&P tax permit. The bureau manages the Statehouse Convention Center, Robinson Center and the River Market.
"Prepared food sellers in Little Rock are mandated by law to comply with the 2 percent tax that Little Rock has had on the books for decades," Hall said in a statement announcing the lawsuit's filing. "Uber Eats has failed to adhere to the law, while its competitors have done so. We work to keep a level playing field in Little Rock, and Uber Eats is no exception."
Similar services are offered by Waitr, Grubhub and Bite Squad, all of which have complied with the city code and obtained tax permits, John Keeling Baker, the commission's attorney, said in a telephone interview. Another company, DoorDash, is in the process of getting a permit, Baker said.
Permits are held by companies, not their drivers, Baker said.
Uber Eats also hasn't filed papers with the secretary of state's office to do business in Arkansas and doesn't have a registered agent in the state, the lawsuit said.
The defendant is Portier LLC, a Delaware company that owns Uber Eats. Baker said the lawsuit will be served to Uber Eats' registered agent in Delaware.
The case was assigned to Pulaski County Circuit Judge Wendell Griffen.
"Our next step is go visit the judge about our request for a temporary, or ex parte, injunction," said Baker, an attorney with the Mitchell, Williams, Selig, Gates and Woodyard firm. Such a hearing can be held without the defendant's presence, and the temporary injunction can be issued -- usually for up to 14 days -- before a hearing is held on a permanent injunction, according to Arkansas judicial rules.
"Uber Eats is subject to the Prepared Food Tax," the lawsuit said, referring to a 2 percent tax on a restaurant's gross receipts. There's a similar 4 percent tax on hotels' and motels' gross receipts, with revenue from both taxes going to advertising and promotion efforts.
The permit applies to Uber Eats through a provision of the city code for "any platform, online or offline [that] advertises and offers to a purchaser prepared food and beverage and accepts payments from the purchases," according to the lawsuit.
"Uber Eats' continued transaction of business without an A&P Tax permit affords Uber Eats an improper competitive advantage over its fellow prepared food sellers," the lawsuit said.
Based in San Francisco and founded 10 years ago, Uber first came to Arkansas as a hauler of people, not food, and got crossways with the Little Rock Board of Directors almost immediately.
Uber began operating in Little Rock in November 2014 without a permit to do business in Little Rock, City Attorney Tom Carpenter said at the time. Uber contended that, as a technology company, it didn't have to follow cities' transportation codes. Both sides worked out an agreement on Uber's operations in Little Rock as a transportation company without the city filing a lawsuit.
Business on 03/20/2019