Monday, November 7, 2016

Antitrust: Uber Sued For Predatory Pricing

A few days late getting to this.
From SF Gate, Nov. 2:

Flywheel Taxi sues Uber for antitrust violations
Flywheel Taxi, a San Francisco cab company, is suing ride-hailing company Uber for predatory pricing practices, claiming that Uber uses its billions of dollars of venture capital to undercut rivals on rides “in an effort to force all competitors from the market and establish a complete monopoly.”
The San Francisco taxi industry has lost 65 percent of its riders and 30 percent of its drivers since mid-2012, when Uber began its low-cost UberX service, the suit said.

“Once all competitors have been forced from the market, Uber, unfettered by competition, will be free to charge exorbitant prices for all ride-hail transportation in San Francisco,” Flywheel Taxi said.

The federal lawsuit also alleges that Uber has misled the public about its availability, pricing and safety; lied to drivers about their earnings potential; discriminated against passengers on the basis of disability, race and gender; and illegally raised fares during peak hours. Uber has faced similar allegations for years and has settled some prominent cases .

“This lawsuit is about holding Uber responsible for their unlawful practices,” said Flywheel Taxi CEO Hansu Kim. “It is not about stifling competition or technological innovations. We want all on-demand taxi services to be treated fairly under the law, and competing on an even playing field. The public is served when there are choices in services.”

Uber said that consumers enjoy plenty of choice among transportation options.

“We compete with lots of ways to get around, especially car ownership,” Uber said. “Our goal is to provide a credible alternative to the private car. Our technology lets us make our network more efficient over time, and innovations like UberPool (shared-ride service) are further lowering prices, making ride sharing more available to more people.”

Law professor Mark Lemley, director of the Stanford Program in Law, Science and Technology, said Flywheel will have an uphill battle making its case.

Courts, including the Supreme Court, “have deliberately made it extremely hard to prove predatory pricing,” he said. “The complaint that a competitor charges too little money is usually not evidence of a secret conspiracy to drive everyone out of the market and then raise prices; it’s usually (made by) someone who is failing to compete in the market and is upset about it.”...