San Francisco: Uber was sued in a court by Desoto, the oldest cab company in San Francisco that recently rebranded itself as a ride-hail company – Flywheel.
In its complaint on Wednesday, Flywheel alleges that Uber used “predatory pricing tactics” to cause a “race to the bottom” in transportation services, The Verge reported.
Flywheel also accused Uber of lying about the availability, pricing, and safety of its rides, lying to drivers about the income they can earn, discriminating against disabled passengers and on the basis of gender and race, and illegally increasing fares during peak hours through surge pricing.
The company is seeking damages from Uber “greater than $5 million.”
Uber promotes itself as a disrupter. But according to Flywheel, “Uber has done little more than implement a business strategy that openly flouts the law while shifting many of the costs and nearly all of the risks of providing ride-hail services from itself to its drivers and passengers while forcing a race to the bottom through predatory pricing tactics – where, propped up by billions of dollars in venture capital funding, Uber will remain until its illegal strategy has forced all other competitors from the market.”
“Uber CEO Travis Kalanick has repeatedly stated in public speeches that Uber intends to ‘destroy’ all of its competitors and has made clear that UBER is doing so through below-cost pricing of UberX and UberXL services,” the lawsuit reads.
The ride-hail giant is arguing that Flywheel allegations of predatory pricing don’t make sense.
Flywheel is focused on a narrow portion of Uber’s business — ride-sharing — to make its accusations of underpricing, but Uber says its broader goal is to end personal car ownership, which is why it is subsidizing its rides to keep fares so low.
First Published | 3 November 2016 8:00 AM