San Francisco taxi company sues Uber for “predatory pricing tactics”

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Another day, another lawsuit against Uber. This time it’s coming from DeSoto Cab, the oldest cab company in San Francisco. DeSoto, which recently rebranded as Flywheel Taxi, has accused Uber of things like monopolization, illegal and unfair practices and predatory pricing, according to a lawsuit filed in the U.S. District court of Northern California today.

“In reality, Uber has done little more than implement a business strategy that openly flouts the law while shifting many of the costs and nearly all of the risks of providing ride-hail services from itself to its drivers and passengers while forcing a race to the bottom through predatory pricing tactics — where, propped up by billions of dollars in venture capital funding, Uber will remain until its illegal strategy has forced all other competitors from the market,” the lawsuit states.

In short, Flywheel Taxi says Uber has relied on its billions of dollars in venture capital to be able to offer rides to people at a price significantly lower than what it costs to sustainably run a ride-hailing service. To be clear, Flywheel Taxi is not the same as Flywheel, which develops a mobile operating system for the taxi industry.

The suit also alleges that the taxi industry has experienced a 65 percent decline in ridership and lost more than 30 percent of its drivers as a result of Uber’s “illegal actions.” Flywheel Taxi is seeking greater than $5 million in damages.

“We compete with lots of ways to get around, especially car ownership,” an Uber spokesperson said in a statement. “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 are further lowering prices, making ridesharing more available to more people.”

The lawsuit comes at a less than ideal time for Uber. Last week, an employment tribunal in the U.K. ruled that Uber drivers are workers — not self-employed contractors. Meanwhile, Uber’s battling a nationwide class-action lawsuit that aims to achieve employee status for drivers.

Featured Image: REUTERS/Shu Zhang