SAN FRANCISCO -- The California Court of Appeals has upheld a lower court’s decision to dismiss a lawsuit by cab companies and medallion owners against Uber Technologies.
The plaintiffs claimed Uber charges below-market prices for rides as a way to damage or eliminate competitors.
The cab companies claimed Uber’s pricing violates the state’s Unfair Practices Act (UPA). That law makes it illegal “for any person engaged in business within this state to sell any article or product at less than the cost thereof to such vendor, or to give away any article or product, for the purpose of injuring competitors or destroying competition.”
However, section 17024(1) of the UPA states that the act does not apply to any company regulated by the California Public Utility Commission (CPUC).
Both sides in the lawsuit conceded that Uber is regulated by the CPUC. But even though the CPUC has the power to set control rates charged by Uber, it has never exercised that power.
“In short, the parties disagree as to whether the statutory exemption applies only when the CPUC has actually set rates, or applies more broadly, where the CPUC has the jurisdiction to set rates, regardless of whether it has chosen to do so,” the appeals court ruling said.
The trial judge ruled in favor of Uber and gave the cab companies the chance to file an amended lawsuit. When the companies chose not to amend their complaint, the trial judge dismissed the case.
The appeals court on March 23 affirmed the trial judge’s dismissal.
“The CPUC has rate-setting jurisdiction over Uber,” the court said. “Accordingly, the statutory exemption to the UPA set forth in section 17024(1) applies, and the plaintiffs’ UPA claims were properly dismissed.”
The ruling is similar to other recent court decisions, the appeals court said. “We reach the same conclusion as to the applicability of section 17024(1) as have three California federal district courts, two within the last year, in cases alleging identical UPA claims against Uber,” the appeals court said.
Uber Technologies Pricing Cases, California Court of Appeals, Division One, A154694