Adomni, a Las Vegas based marketing company, is demanding Uber pay at least $50 million, in a lawsuit accusing the rideshare operator of numerous violations of a contract for digital billboards atop taxicabs and other vehicles across the U.S., and then allegedly disparaging them to other clients when the marketing firm pushed back.
Adomni filed suit against Uber Technologies in January in Los Angeles County Superior Court. The case was transferred to San Francisco County Superior Court on May 26.
The lawsuit comes amid an apparent breakdown of a business relationship that launched with fanfare about three years ago.
According to the complaint, Adomni, which specializes in so-called out-of-home (OOH) ad tech, first contracted with Uber in 2020 to power Uber’s new OOH business. According to reports published at the time, the venture with Adomni marked Uber’s first foray into the OOH business.
By 2021, Uber had expanded its business, inking deals to place video billboards atop thousands of taxicabs in New York. According to a press release in 2021, Uber OOH was also operating in Atlanta, Boston, Dallas, Los Angeles and Phoenix.
Uber expected to take its campaign into other U.S. markets by the end of 2021.
According to Adomni’s complaint, the partnership was lucrative, with Uber collecting 80% of all proceeds from the ads under the revenue sharing agreement with Admoni.
“To put it mildly, Adomni made and paid Uber a tremendous amount of money, with no out-of-pocket expenses,” Adomni said in its complaint.
However, according to the complaint, the partnership with Uber ultimately soured, as Adomni said its relationship with the rideshare operator allegedly proved to be something of a one-way street.
Adomni said, for instance, that its contract with Uber unwittingly caused them to be pulled into a trademark court fight between Uber and another company, known as Uber Inc., costing Adomni big money in legal bills with no support from Uber.
Further, Adomni asserted Uber began building an inside sales team to sell its own advertising, despite allegedly initially assuring Adomni at the start that “Uber is a rideshare company with no intention of having an in-house Ad Sales Team or selling their own ads for Uber tops.”
Adomni said Uber refused to share the ad space with Adomni for self-promotion, which Adomni said violated their contract.
“One of the key reasons the Agreement appealed to Adomni was because Uber promised that Adomni would have exclusive rights to selling the ad plays on the car toppers,” Adomni said in its complaint. “Unfortunately, Uber would take Adomni’s ads down and run their own ads.”
And Admoni asserted Uber repeatedly failed to provide “working hardware” to run the ad displays.
According to the complaint, Adomni attempted to “reset” its relationship with Uber. But instead, Adomni asserted Uber responded by “strong-arming” Adomni and allegedly falsely claiming Uber terminated its relationship with Adomni because Adomni had allegedly failed to live up to its financial performance promises.
“The very fact that Uber purported to terminate Adomni – and thereby destroyed streams of revenue into which Adomni had heavily invested – caused substantial financial harm to Adomni,” the ad company said. “Making matters worse, Uber disparaged and libeled Adomni to the entire market, virtually destroying any chance Adomni had of a resurgence, or soliciting any investors.
In all, Adomni estimated it had suffered at least $100 million in damage to its business from Uber’s alleged false and misleading statements concerning Adomni’s performance under the contract.
Adomni’s complaint lodges multiple counts against Uber, including allegations of breach of contract, fraudulent concealment, interference with Adomni’s business, and libel.
Adomni is seeking at least $50 million in actual and compensatory damages, plus unspecified punitive damages, pre-judgment and post-judgment interest and attorney fees.
Adomni is represented in the case by attorneys Christopher L. Frost and David Ching, of the firm of Weinberg Gonser Frost LLP, of Los Angeles.