Last Friday, the First Circuit Court of Appeals issued its decision in a case between Massachusetts taxi companies and Uber Technologies, Inc. over alleged unfair competition in entering the taxi market without medallions. The court upheld the district court’s judgment, siding with Uber on all counts.
Between 2013 and 2016, transportation network companies (TNCs) such as Uber, Lyft and Sidecar entered the scene and “upended” the taxi industry, the opinion recounted. The panel continued that there were no regulations on these companies until 2016, and in the meantime these companies were able to circumvent the standard costs of taxis by contracting workers who paid for their own expenses.
The plaintiffs alleged that “Uber competed unlawfully in the on-demand, ride-hail ground transportation market in and around Boston,” and claimed over $122 million in damages from the “unfair competition.” Anoush Cab and the other taxi companies claimed damages under Massachusetts unfair competition laws, common law, and aiding and abetting a conspiracy to engage in unfair competition. The district court ruled in favor of Uber and dismissed all claims against them.
The court found that Boston did not explicitly “inform Uber that it was forbidden from operating its ridesharing services,” and that Uber acted in accordance with standard marketplace procedures as a result. The court also concluded that they were not persuaded by the plaintiffs’ arguments that Uber violated common law unfair competition, since they were “unable to show” that taxicab regulations were “enacted to protect against unfair competition.”
For similar reasons, the counts of aiding and abetting and conspiracy were dismissed as the plaintiffs’ did not meet the heightened standard needed to plead these charges. The district court found that the plaintiffs’ damages experts were “unreliable” because they gave an “inconsistent” testimony and the court agreed; therefore, they upheld the dismissal of the final count against Uber.
The plaintiff taxi companies were represented by Shaprio, Haber & Urmy LLP, Prince Lobel Tye LLP, and the Law Offices of Christopher G. Timson. Uber is represented by Boies Schiller & Flexner LLP and Cooley LLP.