SAN FRANCISCO—Uber Technologies Inc. was sued on Wednesday, November 2 by Desoto Cab Company—now rebranded as Flywheel Taxi. The lawsuit against Uber’s business tactics could be “greater than 5 million,” reported The Wall Street Journal.
Flywheel Taxi’s legal action is rooted in accusations against Uber for using “predatory pricing tactics” by means of an “uncompetitive” market resulting in a monopolization of transportation, states the SF Examiner. The lawsuit claims that Uber is charging fares lower than what a ride-hail company would normally need to operate with venture capital worth 15 million. Flywheel Taxi stated in the lawsuit, “…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.”
Flywheel Taxi accused Uber of promoting false information to customers. In June 2013, Flywheel Taxi claimed that Uber, “falsely stated to the public that UberX prices were ’10 percent lower than taxi prices’.” Flywheel Taxi states that the prices were equal in the San Francisco Ride-Hail Market. Flywheel Taxi had previously filed a lawsuit against Uber in 2015 for unfair regulations in comparison to its competitors (Uber and Lyft).
The current lawsuit alleges that from July 2016 to the present, Flywheel has seen a 65 percent decrease in ridership and a 30 percent drop of the company’s drivers, due to the “illegal business tactics” used by Uber. Flywheel Taxi states in the lawsuit that Uber’s tactics will divert many of the risks of ride-hail services to drivers and passengers, “forcing a race to the bottom.”
A spokesperson for Uber release the following statement: “We compete with lots of ways to get around, especially car ownership. Our goal is to provide a credible alternative to the private car.”
According to Uber’s website, the creation of uberPool; while it increases travel time by 5 minutes, allows passengers to split the costs of rides to promote “ridesharing” and lower fare costs.
