Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Uber hit with predatory pricing, price fixing claims, (Jul 11, 2014)

By Greg Hammond, J.D.

Uber Technologies, Inc.—a global company that connects riders and drivers through a smart phone “App”—continues to face fierce opposition from cab companies and associations. Recently, a group of 29 cab companies and associations in and around Baltimore have filed suit against Uber, claiming that the company has and continues to violate Maryland’s antitrust laws through predatory pricing and anti-competitive price fixing. The complaint was filed in the circuit court for Baltimore County on July 3 (The Yellow Cab Co. v. Uber Technologies, Inc., Case No. 24C14004064).

According to the complaint, taxicabs in Baltimore must charge uniform rates that are set by the Maryland Public Service Commission (PSC). However, the plaintiff cab companies contend that Uber does not follow these regulations for its transportation services. Rather, the cab companies allege that Uber’s “high-priced” UberBLACK and UberSUV services and “below-market” uberX services create a “high-low” impact on their businesses. Specifically, the companies allege that Uber’s high-end services cherry pick the best fares in the most lucrative areas, while failing to offer services in lower income areas. In addition, they assert that Uber’s “low-end” services charge below-market predatory rates that cab companies cannot compete with.

“Uber’s unregulated actions will create a socially-repugnant ‘class system’ for transportation,” the companies asserted, “one class of high income credit card holders (‘the haves’) who use Uber in affluent areas of the state, and another class of less-affluent customers (‘the have nots’) who pay cash, rely on taxicabs as a principal method of transportation and utilize taxicabs in lower income areas.”

Consequently, the cab companies allege that Uber violates the Maryland Antitrust Act in three ways: (1) through the UberBLACK and UberSUV services, Uber requires that its drivers charge mandatory and uniform prices not approved by the PSC or the Montgomery County Department of Transportation; (2) through the uberX service, Uber requires that its drivers charge mandatory and uniform prices so far below the market rate that it constitutes illegal predatory pricing; and (3) through its services, Uber uses unregulated “surge pricing” that results in uniform prices that the cab companies cannot legally charge for the same services. In addition, the complaint alleges that Uber’s uniform rates are an unreasonable restraint of trade in violation of the state’s Antitrust Act and “constitutes a well-planned effort to monopolize that industry and destroy competition from lawful transportation companies and providers such as Plaintiffs.”

The cab companies are therefore requesting that the court enter a permanent injunction preventing Uber and its drivers from using or charging set rates, illegally fixing prices, and engaging in predatory pricing through the uberX service. In addition, the companies seek actual and treble damages, “in an amount to be proven at trial.”

Attorneys: George F. Ritchie and Jonathan Montgomery (Gordon Feinblatt LLC) for plaintiffs.

Companies: Uber Technologies, Inc.; The Yellow Cab Co.; Checker Cab Assn., Inc.; Sun Taxicab Assn., LTD; Select Cab Co., Inc.; Superior Cab Co., Inc.; Serene Cab Co., Inc.; Sentinel Cab Co., Inc.; Scout Cab Co., Inc.; Yellow Cab Assn., Inc.; Safety Cab Co., Inc.; Coast Cab Co., Inc.; Service Cab Co., Inc.; Circle Cab Co., Inc.; Sunrise Cab Co., Inc.; Classic Cab Co., Inc.; Cordial Cab Co., Inc.; Choice Cab Co., Inc.; Champion Cab Co., Inc.; Skyline Cab Co., Inc.; Central Cab Co., Inc.; Belle Isle Cab Co., Inc.; Secure Cab Co., Inc.; Colonial Cab Co., Inc.; Century Cab Co., Inc.; Green Tomato Cars DC, LLC; Barwood, Inc.; Supertaxi, Inc.; Tashin Farida, Inc.

News: Antitrust MarylandNews