US: Taxis’ monopoly suit against Uber hits roadblock

The Philadelphia Taxi Association’s legal fight against Uber hit a red light when a federal judge dismissed its unfair competition and monopolization lawsuit against the ride-sharing service.

Holding that the association and the cab companies behind the suit had no standing to file antitrust claims, US District Judge Juan R. Sanchez of the Eastern District of Pennsylvania granted Uber’s motion to dismiss the case Nov. 3. However, Sanchez allowed the plaintiffs to file an amended complaint, giving them a chance to jump start their case.

The association claimed Uber operates as a taxi service in Philadelphia, but does not adhere to any of the local rules and licensing requirements that cab companies do. Despite that, Sanchez said the association failed to make a valid antitrust claim.

“The court finds plaintiffs have merely alleged harm they have felt to their operations, investments and earnings since Uber entered the Philadelphia taxicab market, along with allegations that Uber’s participation in the market is illegal under state and local regulations,” Sanchez wrote in his opinion. “Such harm or violations, however, are not the type of injuries the antitrust laws were intended to prevent, and thus do not establish antitrust standing.”

In order to successfully establish an antitrust claim, a plaintiff must show that the alleged conduct affects the prices, quantity and quality of goods and services, and not just the plaintiff’s own welfare, Sanchez said.

The association and cab companies claimed they’ve taken serious hits to their business since Uber “flooded” the market. Additionally, they allege that their medallions—the licenses that allow taxis to operate in Philadelphia—have become drastically devalued. They claim that the average value of a medallion is now $80,000, down from $530,000 prior to Uber’s arrival. Medallions also serve as a type of asset for cab companies and can be used as security for creditors.

Additionally, the association alleged that Uber recruits directly from taxi companies, and has lured away roughly 1,200 drivers since it began operating in Philadelphia.

But Sanchez reiterated that losses suffered as a competitor do not give standing to file suit for monopoly.

Full Content: The Legal Intelligencer

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