Uber revealed on Friday that its business more than doubled in 2016, but a pair of fresh lawsuits filed in California say that significant growth is due to a business model that relies on “predatory pricing” to drive competitors out of business.
Uber disclosed on Friday to Bloomberg that last year it doubled its gross bookings—the total of fares charged before drivers get paid—to $20 billion. And while the company takes that as a sign of encouragement that business is good, the lawsuits filed last month accuse Uber of “pricing its service below cost in order to capture market share and harm competition in the state of California.”
Uber operates with enormous losses thanks to the company’s massive private investment of about $15 billion, which helps subsidize the cost of rides while helping it gain significant market shares across the U.S.
“As a result of Uber’s below-cost pricing, traditional taxi operators have been harmed through loss of customers and fare revenue to Uber,” one suit, filed in San Francisco County Superior Court by taxi driver Eyad Ariekat, says.
Ariekat, a South San Francisco resident, has been a taxi driver in San Francisco since 2011, according to the complaint, after paying $250,000 to […]