San Francisco's largest cab company filed a federal lawsuit against rival Uber Technologies Inc., alleging the ride-hailing firm purposefully prices its trips at a loss in an effort to squeeze competitors out of the market and create a monopoly.
The suit, filed Tuesday by DeSoto Cab Company Inc. in the U.S. District Court for the Northern District of California, also claims that Uber flouts public safety measures, promises wages it cannot deliver and raises fares illegally as part of its "surge pricing" practices during peak travel times. DeSoto said it is seeking at least$5 million in damages.
The suit alleges that Uber Chief Executive Travis Kalanick has said his company works to assert market share over competitors "through below-cost pricing."
An Uber spokesman declined to make Mr. Kalanick available. Regarding the suit's central allegation that Uber is anticompetitive, he said "we compete with lots of ways to get around, especially car ownership. Our goal is to provide a credible alternative to the private car."
Uber's service, particularly its UberPool carpool offering, is "further lowering prices, making ride-sharing more available to more people," he said.
The rise of Uber, Lyft Inc. and other companies that pair riders and individual car owners has created something of an existential crisis for traditional cab companies in much of the world. The immediacy of digitally hailing a ride from an Uber driver, as well as the speedy fare collection through its app, has been difficult to replicate for cab operators, which still typically use centralized dispatching.
Ride-hailing firms, for their part, have faced resistance from entrenched taxi commissions as they enter new markets, and have faced questions over their driver vetting and pricing practices.
DeSoto last year rebranded itself as Flywheel, as part of a partnership with Flywheel Software Inc., whose mobile app allows users to summon yellow cabs, similar to how it is done in Uber's app.
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(END) Dow Jones Newswires
November 02, 2016 21:05 ET (01:05 GMT)
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