Sidecar, a former competitor in app-based ride-sharing services, recently launched a lawsuit against Uber. The complaint alleges that Uber used illegal anticompetitive strategies to drive its rivals out of business so that it could monopolize the industry.
Sunil Paul, who was the CEO of Sidecar, writes on his blog that “It was never a fair fight.” He goes on to argue that customers are now stuck paying higher rates and being forced to choose Uber because of that company’s illegal practices.
Uber was established in 2009. At the time, they specialized in providing black-car rides that were summoned via an app. Sidecar began offering paid shared rides in 2012. In their complaint, plaintiffs state that their company fostered many innovations including estimations for trip duration and fares. Uber then launched UberX in 2013, which offered a similar paid ride-sharing service. This soon made up the bulk of Uber’s business.
In the complaint, lawyers note that Uber began engaging in predatory pricing practices in an effort to stifle competition. It’s alleged that the company was subsidizing passenger fares as well as driver payments.
Additionally, Sidecar alleges that Uber engaged in a campaign of fake ride requests, with these requests either being subsequently canceled or being taken by a representative of Uber who would try to convince the driver to switch allegiances. Back in 2014, Lyft made similar accusations against the ride-sharing giant. Those charges were substantiated at the time.
Sidecar shuttered operations in 2015 with its assets and technology being sold to GM. Reports suggest that GM is now using those items to develop a robot-driven taxi service. Meanwhile Uber is looking to go public in the first quarter of 2019. It’s one of the most highly anticipated IPOs to come along in recent years, and Uber executives feel that the timing of the lawsuit is suspicious at best.
After all, it’s been three years since Sidecar ceased operations, so why sue now? It may be that Sidecar’s former executives are hoping to undermine the public offering. Time will tell, but it may be difficult for Sidecar to substantiate its claims.