Firms accused of colluding with Uber to keep prices high
“Uniform or near-uniform pricing”
These agreements constitute a per se violation of Section 1 of the Sherman Act. They are horizontal arrangements among direct competitors to fix prices—precisely the type of conduct the antitrust laws were designed to prohibit. The agreements are not part of a larger procompetitive endeavor. Their sole purpose is to suppress competition and inflate prices.
BRENDAN KRETSCHMER, NOVEMBER 24 COMPLAINT
BRENDAN KRETSCHMER Nov. 24 Complaint
A new proposed class action suit, filed on November 24th in the federal court in Manhattan, accuses several technology companies of violating anti-trust laws by helping Uber keep its passenger rates high.
The lawsuit alleges that a group of tech firms that make apps for taxi-hailing services colluded Uber to keep passenger prices artificially high around the United States, according to a report by Reuters News Service.
Curb Mobility, Flywheel Technologies, Creative Mobile Technologies and its subsidiary ARRO are accused of violating antitrust law through a business partnership with Uber that integrated their technology into its app.
The lawsuit alleges the arrangements have led to “uniform or near-uniform pricing” between Uber rides and taxis booked using Uber or the defendants’ apps. The plaintiff, a resident of New York, asked the court to grant class action status for potentially millions of ride-hail customers in New York, Chicago, San Francisco, Boston, Seattle and Washington, D.C.
Beginning in March 2022, according to the complaint, Uber signed a series of agreements with each Defendant that integrated their ride-hailing technology and allowed users to hail traditional taxis directly through the Uber app. Publicly presented as pro-consumer and pro-driver efforts to expand options and boost incomes after COVID-19, the arrangements in practice eliminated competition by imposing uniform or near-uniform pricing between UberX and taxis hailed through the Uber app or the Defendants’ apps. These arrangements stripped the Defendants of independent pricing authority.
In public statements and regulatory filings, the complaint notes, Uber confirmed that taxi rides booked through its app using the Defendants’ technology would be priced the same as UberX rides. That pricing alignment is expanding nationally and is already in place in cities such as Boston, Chicago,New York City, San Francisco, Seattle, and Washington, D.C.
“These agreements constitute a per se violation of Section 1 of the Sherman Act,” says the Complaint.
“They are horizontal arrangements among direct competitors to fix prices—precisely the type of
conduct the antitrust laws were designed to prohibit. The agreements are not part of a larger
procompetitive endeavor. Their sole purpose is to suppress competition and inflate prices.”
A Curb spokesperson in a statement said the company does not comment on pending litigation, Reuters notes, while Creative Mobile and Flywheel did not immediately respond to requests for comment. Uber, which is not a defendant, did not immediately respond to a request for comment.
Kyle Roche, an attorney for the plaintiff, in a statement said the lawsuit “aims to restore a fair marketplace and hold the companies accountable.”
Uber has lured away rides from traditional taxis since its launch in 2009. Regulatory changes later allowed taxis to match Uber’s pricing transparency and flexibility.
But taxi-hailing apps stopped competing with Uber and instead in 2022 merged services with the company, the lawsuit alleged.
“By doing so, the defendants traded their growing competitive momentum for access to Uber’s scale and revenue streams,” according to the lawsuit. The integration allowed Uber to “suppress competition that would otherwise have constrained prices and benefited consumers,” the complaint said.
The lawsuit asks a judge to award unspecified monetary damages and to issue a court order requiring greater competition.
