Why We are Suing Uber
And What it Means for Innovation and Competition
--
Today, we filed an antitrust lawsuit against Uber. As an entrepreneur, a champion for transportation innovation for two decades and an advocate for consumer choice, I feel a responsibility to hold Uber accountable for its anti-competitive behavior.
We do not take this action lightly. I co-founded Sidecar in 2011, and we were the pioneers of ride-hailing. Sidecar operated in eleven U.S. markets and completed millions of rides before selling assets to GM in 2016. We fought hard in the marketplace, and were the first company to introduce a number of cutting-edge features that are now a part of every ride-hailing app. If Uber had won the ride-hailing market on a level playing field, we would have been disappointed, but that’s something we could have lived with. That’s not what happened.
Instead of competing on the merits, Uber used a number of tactics that are against the law to drive Sidecar out of business. The specifics are described in our complaint, which is available here and at the bottom of this post. Uber took illegal steps to undermine Sidecar and other competitors, while it planned all along to raise prices for consumers once it had secured a dominant market position.
Uber targeted us with anticompetitive tactics. Uber used “predatory pricing,” which has a legal definition and is spelled out in detail in the complaint. In plain English, it means Uber subsidized rides and driver payments to drive Sidecar and competitors out of the market, so they could raise prices later. And it looks like their plan worked. We shut down in December 2015 and ever since Uber has been raising prices for passengers and lowering payments to drivers.
Uber also intentionally interfered with the performance and quality of competing ride-hailing apps by using clandestine campaigns to send fraudulent ride requests through competitors’ ride-hailing apps, including Sidecar’s.
It was never a fair fight. That’s why Sidecar failed. And it’s also why both drivers and passengers are left with higher prices and fewer choices today. Now it is clear that Uber’s predatory and anticompetitive strategy worked.
That’s why we decided to sue Uber. They need to be held accountable for anticompetitive behavior and we believe this lawsuit is the way to do it.
Sunil Paul is CEO of SC Innovations, the successor to Sidecar Technologies, Inc, which pioneered ride-hailing and many of the innovations common in the ride-hailing market today.
