San Francisco Taxi Company Flywheel Sues Uber for Allegedly Using Low Prices to Drive Out Competition - NBC Bay Area
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San Francisco Taxi Company Flywheel Sues Uber for Allegedly Using Low Prices to Drive Out Competition

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    Flywheel's lawsuit accuses Uber of setting prices so low that other companies are no longer able to compete in the market. Michelle Roberts reports. (Published Wednesday, Nov. 2, 2016)

    A taxi company on Wednesday sued Uber for alleged predatory pricing.

    Flywheel’s lawsuit accuses the ride-sharing firm of setting prices so low that other companies are no longer able to compete in the market, and are instead being robbed of business. The suit accuses Uber of offering fares that are 10 to 45 percent below those of taxi companies.

    “When you provide service at a lower price to put competitors out of business, then that allows you to monopolize and raise the prices to whatever you want,” said Flywheel’s General Manager Greg Cochran.

    The lawsuit also alleges that Uber is using investor dollars to cover the lost profits from low pricing.

    Hailing a Flywheel taxi or requesting an Uber can both be done via cell phones. But Cochran believes taxis face much stricter rules than ride-sharing companies, and is fighting for the same regulations as those handed out to Uber.

    “A customer having a choice is a good thing for business, but we all have to be treated fairly under the law,” he said.

    Flywheel, formerly known as DeSoto Cab Co., has seen a sharp decline in ridership and driver interest, according to Cochran.

    “This is my living,” said Flywheel driver Gene Duff. “In that way, it does disturb me.”

    On Wednesday, Uber customers said they have made the switch to ride-sharing companies because they are cheaper and more convenient.

    “I think cabs will have to figure out a way to get into the battle,” Brian Sullivan said.

    For its part, Uber released a statement, which said in part: “Our technology lets us make our network more efficient over time, and innovations like uberPOOL are further lowering prices, making ridesharing more available to more people.”

    Lawyers representing flywheel say the case could take more than a year to be resolved.

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