Maryland recently became the newest legal battleground for Uber, the popular ride-sharing service that is facing unfair-competition lawsuits in at least three other states.
But the action in Maryland by nearly 30 cab companies appears to be unique because it also claims Uber violates antitrust laws by fixing prices and engaging in predatory pricing.
Several antitrust lawyers not involved in the case said they were skeptical the antitrust argument would succeed in court.
“Antitrust laws protect competition, not competitors,” said Michael F. Brockmeyer, a Washington lawyer who teaches antitrust law at the University of Maryland Francis King Carey School of Law.
Or, as Benjamin Rosenberg, chairman of Rosenberg Martin Greenberg LLP in Baltimore, put it: “Uber is acting as a disruptor to a regulatory scheme. That’s exactly what antitrust laws were intended to promote.”
The action, filed Thursday in Baltimore City Circuit Court, comes three months after a public utility law judge for the Maryland Public Service Commission determined San Francisco-based Uber is a “common carrier,” like a taxi service, and therefore subject to the same PSC oversight.
Uber, which has appealed the PSC decision, has threatened to leave the state if it faces the same regulations as traditional transportation providers.
Despite the ruling, the cab companies filed suit because they anticipate Uber will “litigate and drag out the PSC case as long as they can,” according to Dwight Kines, vice president for the Mid-Atlantic Region for Veolia Transportation, which owns and operates Baltimore-based Yellow Cab Co. and Checker Cab Association Inc., the two lead plaintiffs in the suit. (Yellow Cab and Checker own nearly all the other plaintiff companies.)
Kines said the cab companies know Uber “is here to stay” and aren’t trying to put ride-sharing companies out of business.
“We just want to level the playing field,” he said. “They don’t have very far to go to comply with common-carrier laws. That’s all we ask for.”
Uber spokesman Taylor Bennett said the company cannot comment on pending litigation but “will vigorously defend the rights of riders to enjoy competition and choice and for drivers to build their own small business.”
The Maryland action, much like federal suits filed in Connecticut, Texas and Illinois, claims Uber is “dismantling decades of laws and regulations governing the vehicle transportation industry.”
For their antitrust claim, the Maryland cab companies allege Uber fixes maximum rates “significantly below” those permitted by the PSC for cabs in Baltimore city and Montgomery County. The cab companies also allege Uber is cutting prices in an effort to put cabs and drivers out of business.
The result, the plaintiffs say, will force cab companies “into a downward spiral whereby Uber uses price-fixing to monopolize both the high and low end of the taxicab market … leaving compliant taxicab companies with a shrinking consumer base increasingly dominated by marginal consumers.”
But William E. Berlin, a principal with Ober|Kaler in Washington, said antitrust price-fixing allegations usually involve setting higher prices, not lower ones. Uber’s prices are also set by the company alone, not multiple competitors conspiring together, he said.
To prove predatory pricing, Berlin added, the cab companies would have to show Uber kept prices low until it drove rivals out of the marketplace, then raised prices to recoup its losses.
“That doesn’t strike me as Uber’s business mode,” he said.
Brockmeyer, a partner at Frommer Lawrence & Haug LLP, agreed.
“If Uber tries to raise prices, you’re going to get someone else to enter the market at a lower price,” he said.
The cab companies, along with several drivers, seek to restrain Uber “from maliciously interfering with Plaintiffs’ businesses” and require it to comply with state regulations. They also seek unspecified damages.
The case is The Yellow Cab Company, et al. v. Uber Technologies Inc., et al., 24C14004064.