Suit saying Uber stifled rival proceeds
Sidecar, the first ridehailing company, got a federal judge’s OK to proceed with a lawsuit alleging that Uber used anticompetitive practices to dominate the market and force Sidecar out of business.
“I’m excited that we’re going to be able to hold Uber accountable for years of reprehensible corporate conduct,” said Sunil Paul, Sidecar’s founder, who has pursued the lawsuit through a successor company, SC Innovations.
“Discovery is going to be very interesting because we’ll get to discover things that were going on in secret.”
Uber declined to comment.
The case, originally filed in U.S. District
Court in San Francisco in December 2018, alleged that Uber used illegal practices to stifle competition and drive Sidecar, a much smaller rival, out of business.
The original lawsuit was dismissed. Sidecar filed a second, amended complaint on similar grounds, which Uber tried to dismiss.
But a ruling on Friday said the case could proceed, while removing an unfair practices act claim.
“At this stage, the
Court finds Sidecar’s allegations of market power to be sufficiently plausible to avoid dismissal,” wrote Chief Magistrate Judge Joseph Spero.
While not ruling on the case’s merits, Spero wrote that Sidecar’s allegation that Uber conducted “campaigns specifically to harm its only two significant competitors (Sidecar and Lyft) ... are sufficient at the pleading stage — in conjunction with the allegations of market power discussed above — to plausibly allege harm to competition.”
Paul patented the idea of mobile ridehailing over a wireless network in 2002. Sidecar offered rides by ordinary people in their personal cars starting in 2011, a year before Uber and Lyft. It pioneered other innovations such as drivers setting their own prices, passengers sharing rides to similar destinations and drivers doing deliveries.
But Sidecar raised just $35 million from investors, an amount dwarfed by what Uber and Lyft raised, and the small company never gained as much traction as its rivals. It shut down in December 2015.
General Motors bought much of Sidecar’s intellectual property, which underlies the inhouse ridehailing service that autonomous car company Cruise uses for its employees.