A federal judge signaled on Friday, April 24, he will likely advance a lawsuit claiming Uber used monopoly power to drive a competitor out of business, reported Court House News.
During a Zoom video court hearing, US Magistrate Judge Joseph Spero said he finds allegations that Uber uses its vast network of drivers and riders to stifle competition adequate to survive a motion to dismiss.
“Plaintiff has at least alleged Uber intends to decrease payments to drivers and in some cases has increased commissions and raised prices in various ways on the passenger side,” Spero said. “It seems to me those are sufficient allegations of market power.”
SC Innovation, formerly Sidecar Technologies, sued Uber in 2018, claiming the dominant ride-hailing app used anticompetitive practices to drive it out of business. Sidecar held between 10 to 15% of market share for app-based rides in San Francisco, Los Angeles, and Chicago before it shut down in 2015.
Spero previously dismissed Sidecar’s suit with leave to amend in January, finding the plaintiff failed to show Uber wields monopoly power as it shares the market with its only remaining competitor Lyft. In order to advance its lawsuit, Spero said Sidecar must show that “Uber can unilaterally raise market prices by restricting its output,” or reducing the number of rides offered.
In a 42-page amended complaint, Sidecar claims that Uber uses a vast trove of data to price discriminate, or charge riders different rates for the same type of rides, such as the company’s use of “surge pricing” when ride demand is high.
“There is no constraint on Uber’s ability to price at monopoly levels because of the network effects,” Sidecar attorney Lewis LeClair said at Friday’s hearing, referring to the impact of Uber’s large network of drivers and riders in suppressing competition.
Full Content: Court House News
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
