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.
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 Uberengaged 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.