Uber's Boston T party – and T is for taxi: City's cabbies sue app maker
An admittedly terrible headline for a terrible company
Uber faces yet another antitrust lawsuit brought by cab companies, this time in Boston, Massachusetts.
Fourteen Boston area taxi companies filed a complaint [PDF] against Uber on Monday in a district court alleging that the ride platform provider violates state laws and city ordinances and deceives passengers about the safety of its vehicles and drivers.
"Uber's business plan and activity illegally undermine critical safety provisions of the municipal Taxi Rules," the complaint states. "Uber's UberX transportation system preys parasitically on established taxi services without paying for them and without obeying the laws designed to protect taxi passengers."
The taxi companies contend that Uber controls an estimated 80 per cent of the low-cost, on-demand ride-hail market in their area.
Uber, famous for flouting regulations in order to expand faster than competitors or regulators can respond, has become a lawsuit magnet. This latest complaint is the sixth civil case filed against the company in US federal court during the month of February. It was the target of nine civil lawsuits in January and 11 in December.
In November, San Francisco taxi companies filed an antitrust lawsuit against Uber, making claims similar to the Boston taxi companies. There's another antitrust case against Uber in New York. And Uber's attempt to pay $100 million to settle a California lawsuit over its classification of drivers as independent contractors has been stalled as related cases elsewhere around the country work their way through the courts.
The Boston cab companies complain that "Uber profits by taking parasitic advantage of a transportation system in which all other players must comply with safety and consumer protections rules established by state and city laws."
But profits continue to elude Uber. As the taxi complaint states, "Uber has lost and continues to lose money on each and every UberX ride provided in the Boston ride-hail market."
Uber is estimated to have lost about $3 billion in 2016 as it trades profitability for market share. According to finance blog Naked Capitalism, Uber passengers pay only 41 per cent of the actual cost of their trips. The remainder of the cost is subsidized by Uber's investors, an arrangement that cannot continue indefinitely.
"In adopting this approach, Uber has deflated fares of UberX to prices below cost in an effort to drive competitors of UberX (all taxis) from the market in the hope of recouping its losses once Uber's competition has been destroyed," the complaint says.
Uber in an email to The Register declined to comment. ®