Uber retains counsel in antitrust litigation, is granted extension in Philadelphia federal court

By Nicholas Malfitano | May 9, 2016

PHILADELPHIA –Uber Technologies, Inc. has been granted a two-week extension to respond to an antitrust lawsuit filed against it in March by the Philadelphia Taxi Association.

On May 3, Judge Juan R. Sanchez of the U.S. District Court for the Eastern District of Pennsylvania stipulated Uber had an additional 14 days to prepare an appropriate response to the litigation, moving the response deadline from May 5 to May 19.

Uber requested the brief extension since its counsel was recently retained on April 22, from the firm of Morgan Lewis & Bockius, in both Philadelphia and San Francisco, Calif.

Uber’s counsel from Morgan Lewis & Bockius referred comment on the litigation to Uber’s media relations office.

The Horsham-based Philadelphia Taxi Association filed an antitrust lawsuit March 15, charging San Francisco-based Uber with violating both the Sherman Antitrust Act and the Clayton Antitrust Act through operating a monopoly for public service transportation in Philadelphia, and intentional interference with contractual relationships and unfair competition.

The plaintiffs now seek to recover funds they claim they have lost and continue to lose due to Uber’s alleged unfair business practices.

Uber, a transportation service, utilizes mobile app technology for users to plan and create trip routes, which are then distributed to Uber drivers. The drivers then use their own vehicles to transport the fares they pick up.

The plaintiffs charge the defendant with circumventing the City’s mandatory system of certificates of public convenience, medallions and legal compliance, which license and authorize the operation of all taxi cabs operating within the city.

Further, the lawsuit states Uber “intentionally sought to evade the statutory provisions and regulations” of the Philadelphia Parking Authority (PPA), by owning no vehicles and employing no drivers – instead, utilizing people using their own vehicles without the proper commercial insurance needed to transport members of the public.

In the process, the lawsuit says Uber avoided substantial costs that would have been due to meet the City’s compliance standards.

The suit adds over the past 20 months Uber has operated in the City of Philadelphia, it has engaged in “predation” by offering monetary compensation and other bonuses to lure drivers from the plaintiffs to Uber.

The plaintiffs claim 1,200 drivers (roughly 17 percent of the city’s 7,000 drivers from medallion cab owners) have left their employ and gone to work for Uber, along with taxi medallions valued at $550,000 in October 2014 now being worth only $80,000, as a result of these same predatory business practices.

The suit says 15 percent of Uber’s competitors have now left the market due to financial harm, with the plaintiffs suffering a 33.8 percent decrease in ridership and 25 percent decrease in earnings over the preceding comparable time frame.

Uber has faced a number of legal challenges worldwide, relating to licensing of its drivers and user safety, among other issues.

Uber communications representative Craig Ewer previously issued a statement on the lawsuit.

“This antitrust suit is the result of the taxi monopoly facing actual competition for the first time – not just from Uber, but from the widespread adoption of ridesharing services throughout Pennsylvania. For years, taxi medallion owners took advantage of their monopoly, leading to poor services for riders and poor conditions for drivers. The charges in this lawsuit are clearly without merit and we will vigorously contest them,” Ewer said.

The plaintiffs seek the Court to declare Uber’s business practice as a monopoly under the Sherman Act, enter judgment for damages for the plaintiffs under the Clayton Act, award other relief for the plaintiffs as deemed just and proper, award compensatory damages in excess of $75,000, plus punitive damages for an amount significant enough to prevent similar conduct from occurring in the future.

The plaintiffs are represented by John F. Innelli of Innelli Law and Stephen R. Bolden of Fell & Spalding, both in Philadelphia.

The defendant is represented by R. Brendan Fee, Steven A. Reed, Brian C. Rocca and Sujal J. Shah of Morgan Lewis & Bockius, in Philadelphia and San Francisco, Calif., respectively.

U.S. District Court for the Eastern District of Pennsylvania case 2:16-cv-01207

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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