Boston taxi drivers fail to prove Uber is a monopolistic behemoth using unfair pricing to crush them, judge rules

A federal judge today dismissed anti-trust charges against Uber brought by medallion cab drivers in Boston, saying the drivers simply showed no proof of predatory pricing or that consumers were hurt by the lower prices Uber brought to point-to-point transportation in the area.

The ruling comes after a similar dismissal last December in a lawsuit filed against Uber by the owners of medallion cabs in Boston and surrounding communities.

However, Uber still has to defend itself against charges that its actions since it moved into Boston in 2011 violate state consumer protection laws and that, even if it isn't violating anti-trust laws, it's still being kind of a jerk and engaged in unfair competition, in suits brought by both the drivers and the medallion owners.

In his ruling, US District Court Judge Nathaniel Gorton said the drivers failed to meet the standards set by the Sherman anti-trust act to prove monopolistic actions, including that Uber had or was driving towards a monopoly position in the market, was setting pricing well below its costs to drive out competitors and was hurting anybody besides competitors..

Plaintiff does not allege that Uber's services were priced below Uber's costs. He has failed to "explain in detail" why Uber's conduct constituted an antitrust violation. See Am. Steel, 815 F.3d at 71. His second amended complaint alleges that Uber "deflated the UberX fares to below cost in order to drive out the taxi drivers" but such "threadbare recitals of a cause of action's elements, supported by mere conclusory statements, do not suffice" to survive a motion to dismiss.

Basic facts such as what an average or median "ride" in the Boston area costs Uber, or costs a taxi, are absent. MacCausland attempts to bolster the factual allegations found lacking in Malden by attaching a report from the Wall Street Journal showing that, worldwide, Uber's costs exceed its revenue. Uber's global performance does not, however, constitute a relevant allegation as to Uber's costs in the "ride-hailing market in the City of Boston." Furthermore, although plaintiff correctly notes that "Uber is a privately held company that [does] not disclose relevant financial and market information," that fact does not absolve plaintiff from meeting the required pleading standard.

Gorton continues:

In a similar vein, MacCausland fails to allege facts demonstrating Uber's intent to monopolize. A plaintiff alleging an attempt to monopolize must establish "specific intent" to destroy competition. Home Placement Serv., Inc. v. Providence Journal Co., 682 F.2d 274, 281 (1st Cir. 1982) (citing Times-Picayune Pub. Co. v. United States, 345 U.S. 594, 626 (1953)). MacCausland generally asserts that Uber

engaged in a scheme to intentionally undercut the taxi industry [and that Uber was] intent on destroying any and all competition through drastic anti-competitive pricing.

He also refers to specific statements, such as an Uber advertisement proclaiming "These fares may only last a limited time, but the more you ride, the more likely they will last." Finally, plaintiff cites a handful of unremarkable statements by Uber's former CEO made in entrepreneurial business-speak such as "I try to push the limits. Pedal to the metal." No specific facts in the second amended complaint even suggest that Uber intended to obtain a monopoly in the Boston ride-hailing market. Without an unlawful intent, "increasing sales and increasing market share are normal business goals," not verboten practices. U.S. Steel Corp. v. Fortner Enterprises, Inc., 429 U.S. 610, 612 n.1 (1977).

Equally important, plaintiff fails to show an injury to Boston consumers. That omission is dispositive, because antitrust plaintiffs must show that “defendants' actions caused an injury to competition, as distinguished from impact on themselves.” R.W. Int'l Corp. v. Welch Food, Inc., 13 F.3d 478, 487 (1st Cir. 1994). According to plaintiff's complaint, Uber's entry caused the supply in the ride-hailing market to increase and the price to diminish. Such allegations fail to demonstrate an injury to competition.

Neighborhoods: 

Topics: 

Free tagging: 

AttachmentSize
PDF icon Judge's entire order87.12 KB
Ad:

Comments

I don't particularly like

I don't particularly like uber but they simply provide a better service than classic cabs. The truth is, medallion holders should be revolting against their masters for being so slow to adapt to technology or changes in the market. Taxis aren't a public service, they exist in a consumer driven marketplace, controlled by government restrictions, which sucks for the drivers. Real capitalism allows for the little guy to start with nothing and be successful but true capitalism also means companies that are bad at what they do (looking at you, GM) atrophy and die so they can be replaced.

up
Voting is closed. 53

The real problem with the taxi system

By on

Medallions having value aside from being a license to do business.

Enforcement being nonexistent.

Get rid of the medallion racket and create licenses and enforce the terms of those licenses (none of this "credit card reader is broken" nonsense any more, nor "official cabs" that are falling apart and dangerous) and they will be able to compete.

I would be more than happy to get rid of all these bike-lane driving diimwits with NH and Maine plates that turn up here if they could just make the cabs actually function properly for consumers.

up
Voting is closed. 38

cabs

By on

I might have a little sympathy for cab drivers if they weren't so transparent in their quest to screw their riders. it is embarrassing that i have to give directions to cabbies in this city. That either means they are incapable of being an effective driver in this city, or are willfully driving longer ways to inflate fares unless I direct them otherwise. GPS units are dirt cheap now, and should be a basic element of all cabs... but that will never happen and the cab industry will continue their slow plummet into the icy depths of irrelevancy.

up
Voting is closed. 53

real capitalism

By on

in 2018 apparently means one company undercuts another or buys up/stifles all competitors until it becomes an effective monopoly that is completely unaccountable to either consumer or regulators

up
Voting is closed. 34

Yeah but enough

By on

...about Google.

up
Voting is closed. 39

Yeah?

Tell that to the Uber driver I saw wildly driving down Huntington Ave last night. With the Florida plates.

And when you say "medallion owners should be revolting against their masters" who exactly would those masters be?

And when you say "real capitalism" do you mean a company started by a privileged misogynist and rape apologist that was so vile he had to be kicked out of his own company? Or one that started taking 8% commission from their drivers until they increased it as the platform grew to now 28% while barely raising rates? That kind of bait and switch capitalism?

Cabs are dying the same way the music business did, they thought they were never going away ever. Only in this case the replacement is sleazier than those they are replacing.

up
Voting is closed. 38

The great thing about Uber

By on

The great thing about Uber and Lyft is that the drivers can actually be held accountable for their behavior - be it their rudeness towards customers, their driving or their navigation. They are required to follow the GPS or the instruction of the customer. Oh, and they cannot pretend that their credit card machine “doesn’t work”.

On top of this, there is ALWAYS a record of who is the driver and customer.

You might not like the ceo of uber or other people who run the company, but it’s a way better service, regardless. Even if it weren’t for the price, I will NEVER take a cab again if I can help it.

up
Voting is closed. 42

Really?

I wish you could have been there with me and the man who only spoke Mandarin and pidgin English refusing to go the route requested by me last Saturday. Funny thing was, he looked nothing like the gentleman the app said was coming. The car was spot on, but....

And as far as records, it's been 35 years since I drove TO, but ole Stanley Parker knew who was in his cab for the twelve hour shift I did with the number clearly on the cab and my name on my hack license. And without the rape apologies.

Oh, and those broken credit card machines? They were only broken thanks to the 6% fee that the processor was charging. Several independent cabbies I know love Square and the 1.5% they take if the card is present. It's money in the bank next day guaranteed.

up
Voting is closed. 39

Right...

Tell me genius...any numbers of how many Uber and Lyft drivers have avoided paying their taxes since the inception? Any way of enforcing compliance?

up
Voting is closed. 30

Wrong.

By on

Wrong.

I accept the percentage charge to process a credit card as a business expense. I also use Square. I like it because the funds go in my account at the end of my business day. Many drivers don't like cards because it leaves them wondering if they are going to be able to put gas in their car. The company I drive for in Minneapolis has that problem figured out.

Please understand your subject matter before you make outlandish comments.

up
Voting is closed. 32

True, if you're in the cab

By on

Boston cabs were terrible. Before the Ted was open, I was dropped at South Station to go to the airport for a college semester. Cabbie didn't want a fare to the airport early in the morning, so said it was $20, flat rate. I paid it (had bags in the trunk, didn't want him driving off with them), but filed a complaint with the hack division of BPD and the money was refunded and the license was suspended (for a day). When a flight got in to Logan very late following a delay, we were pooled in to the few cabs there, and the cabbie charged the meter fare for everyone despite the longer-than-necessary trip. Having a state-sponsored monopoly meant there was no mechanism to improve service. Hell, if the cabs had come up with a decent app in 2009, Uber would be nowhere (especially if it had a good mechanism for reporting had behavior).

However, what the current system lacks is a mechanism for people outside of the cab to report bad behavior on the part of the operator. Seinfeld was on this back in the '90s, but Uber makes it worse. If a cab parked in a bus stop or hydrant, made an illegal or dangerous U-turn, or assaulted you (yeah, this happened too, c 2012 cab decided to try to run me, a cyclist, off the road and then call me a faggot) you could report that to the city. Now? Good luck. Lyft/Uber don't care. And the same idiots who drove the cabs (and didn't use turn signals or, all to frequently, headlights) now drive these unidentifiable cars, often from Rhode Island or New Hampshire or elsewhere, on roads they've never really seen, so whoops they wind up in the left lane when they're supposed to be going right and have to cut across three lanes of traffic. Meanwhile the rider is in the back seat, buried in their phone, ready to give five stars to the driver, no matter how many red lights they run or pedestrians they try to run down at crosswalks.

The medallion system was pretty terrible. But the current system of unaccountability isn't much better.

up
Voting is closed. 31

Uber and Lyft do take reports seriously

By on

I have reported several of them and gotten quick responses, including "we have terminated that driver".

Guys probably had other complaints on them.

They have stickers now and they are aware that many cyclists and pedestrians are also customers.

up
Voting is closed. 33

Uber is not a "little guy"

By on

Uber is not a little guy starting with nothing. It has huge capital investment that it uses to subsidize operating costs that are higher than revenue. Just becaus the cab driver suit didn't provide the required numbers for the boston area doesn't mean uber isn't pushing prices below cost. Uber's main innovation was finding a way to legally (for now) pay their workers less than minimum wage, and shift costs like fuel, insurance, and regulatory compliance onto individual 'contractors' rather than corporate.

up
Voting is closed. 41

Taxis are literally and

By on

Taxis are literally and legally a public service in most areas. That's why they're regulated by Public Utility Commissions, i.e. a public service.

up
Voting is closed. 29

The Uber Myths Live On!

By on

Robert Paulson is like a multitude of other gullible souls who actually believe the Uber crap.

No, Uber does NOT have a way to deliver ride services that represents a major improvement over what traditional taxis were doing before.

It is true that, in many big cities where Uber has a solid presence, they can provide a vehicle at a particular location faster than traditional taxis can.

That is not an indication of how good their technology is, it is simply a reflection of how many cars they have on the street. (Technology doesn't determine that, regulations do.)

San Francisco allows a maximum of 1,800 traditional taxis (and imposes a host of regulatory burdens on them). There are now somewhere between 45,000 and 65,000 Uber/Lyft vehicles working the same territory and competing for exactly the same business.

When the measure of service is how fast you can dispatch a car to a given place, and when one company is given a 25:1 advantage in number of cars, how hard is it to figure out who's going to win that race most of the time?

It has nothing to do with technology, it has to do with physical logistics. If you gave traditional taxis that kind of numerical advantage over the rideshares, the perceptions would be turned upside-down.

People are impressed with the "apps" only because they deliver good service, but that quality of service is related entirely to the huge number of vehicles on the road.

Uber LOVES people like Mr. Paulson. The rideshares have built their mythical empire on the faith and eagerness of people like him to be a part of what's happening at the perceived "cutting edge."

If only he had a clue in hell . . . .

up
Voting is closed. 29

Wait, the businesses granted

By on

Wait, the businesses granted a legal monopoly (the medallion system) were accusing a free market competitor of being the monopoly?

You can't make this shit up.

up
Voting is closed. 54

My beef: not enough tickets

By on

This applies to both taxis and ride shares...

My beef: not enough tickets written. Loading/unloading in a bike lane? Ticket. Last vehicle in the queue with your left rear quadrant hanging out in traffic? Ticket. Dangerously aggressive driving? Ticket.

Get the drivers to behave. That's my request.

up
Voting is closed. 53

Uber

By on

should be wiped from the earth unless they agree to get rid of that "continue without seeing fare" silicon-hipster wet dream bullshit......I have better things to get angry at but that shit gets me every time

up
Voting is closed. 28

Huh?

By on

Just click the button to see the fare. It's not difficult.

up
Voting is closed. 40

Have you used uber in the

By on

Have you used uber in the last two years? They give you an upfront fare now. It's also worth pointing out that taxis never did (and still don't) tell you the fare in advance, just the rate... like uber used to.

up
Voting is closed. 36

So rather

By on

So rather than improve service, they are just gonna fight it in court.

They are real smart. Sue to continue to provide crappy service.

Uber and Lyft offer a better product so people flocked to them. Cabbies should have noticed.

The thing that gets me is for years before Uber/Lyft cabbies fought any sense of improvement. This included better cabs, credit card payments, etc etc

Then a few years later Uber comes to town and beats them at their own game. No surprise. Now they still don't want to change. It's time for cabbies to realize they need to or they will go the way of the dinosaur

up
Voting is closed. 52

I honestly don't know how

By on

I honestly don't know how they could change significantly enough for me to use them. Unless Uber jacks up rates considerably, cabs are toast.

up
Voting is closed. 29

So we've got a cartel pot

By on

So we've got a cartel pot calling a semi-monopoly kettle black.

up
Voting is closed. 33

Equally important, plaintiff

By on

Equally important, plaintiff fails to show an injury to Boston consumers.

There are side concerns about whether we should go after monopolies even when they benefit consumers (e.g. Amazon)

but, this is a big point for this lawsuit. How did they expect to show that Uber is injurious to Boston consumers?

up
Voting is closed. 28

laugh at Taxi's now

By on

So Uber came to town and got no state license no city approval and let people drive whatever they wanted. Taxis are regulated and monitored by the state and the city and have a myriad of rules. I understand people don’t like some of the taxi drivers but I know if you complained to the Hackney division there are consequences. You will miss taxi’s when they are gone. Everyone is okay with the" free market" until it cost them money or their job.

up
Voting is closed. 38

LOL

By on

I know if you complained to the Hackney division there are consequences.

That is the funniest thing that I have heard all day!

up
Voting is closed. 44

Hackney

By on

laugh all you want but they do suspend drivers and discipline cab owners. could they do more and should they have down more , heck yes.
BTW all those upgrades to technology cost money and the cost gets passed down to the drivers. one of the reasons many drives quit is because they could not make money. This was pre Uber. Now it is really impossible.
its a thankless job.

up
Voting is closed. 34

No, they don't

By on

They laugh at you, insult you for reporting a bad driver, and then refuse to file anything because you're just making work for them.

That has been MY EXPERIENCE of trying to report misbehaving cab drivers and dangerously unmaintained cabs. You must be sleeping with someone over there or delusional that anything ever happens when reported by an endangered citizen.

Uber, on the other hand, responds well to pictures of their stickered vehicles doing the stupid.

up
Voting is closed. 32

i have been using ride shares

By on

i have been using ride shares for 3 or 4 years now, and i can say that i've yet to have one bad driver or car in disrepair. i can't say that for the 10+ years I was dependent on cabs that were more often than not falling apart at the seems and filthy.

up
Voting is closed. 34

Aren't those cabs restricted

By on

Aren't those cabs restricted from picking anyone up outside of Somerville?

up
Voting is closed. 31

No.

If the call comes from another town, they can pick up there. I spent many a night in a Green Cab, as they were the only ones that played the BH projects.

up
Voting is closed. 29

Another reason to lyft/uber

By on

as they were the only ones that played the BH projects

This bullshit, right here.

up
Voting is closed. 33

At the time of the busing...

Boston cab companies got a pass for not going into the projects and Green Cab was more than happy to pick up the slack. Shit, I had to call a cop to get get a cabbie at the stand at Wash and Bromfield to take me and an infant to the projects back then.

up
Voting is closed. 33

The traditional cabs

are pathetic and rotten in a host of ways, notably the medallion system, and the gaming of fares.

The ride share companies are pathetic and rotten in a host of ways, notably their desire to destroy public transit, and paying "contractors" less than minimum wage when costs are factored in.

The T is pathetic and rotten in a host of ways, notably the patronage hacks and state legislators who have driven it into the ground, and the union that is willing to destroy its own long-term prospects for short-term gain.

The roads and highways are just a sick joke.

In other words, it's a big doo sandwich, and we've all gotta take a bite.

up
Voting is closed. 30