Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 1 of 34
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
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`________________________________________________
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`ANOUSH CAB, INC., ARAMS INC., ARARRAT, INC., )
`ATLANTIC CAB, INC., BARLOW CAB, INC.,
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`BEDROS CAB, INC., BOYLSTON CAB, INC.,
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`BRIGHAM CAB, INC., CLEVELAND CAB, INC.,
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`DIAMOND CAB, INC., ELSIE CAB, INC.,
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`FENWAY TAXI, INC., G & A CAB, INC.,
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`JORDAN CAB, INC., JUBRAN CAB, INC.,
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`KILMARNOCK CAB, INC., LITTLE ISLAND
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`CAB, INC., LOCUST CAB, INC., LONGWOOD
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`TAXI, INC., M & AN CABS, INC., M.P.E. CAB, INC.,
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`MARBED CAB, INC., MASSIS, INC.,
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`) Civil Action No.
`MESROB, INC., N.E. CAB, INC., ORIOLE CAB, INC.
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`PETERBOROUGH CAB, INC.,
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`QUEENSBURY CAB, INC., SAHAG, INC.,
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`SOVEREIGN CAB, INC., V&A CAB, INC.,
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`VERAS, INC., VICKYS, INC., and
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`YELLOWBIRD CAB, INC.,
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`Plaintiffs,
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`UBER TECHNOLOGIES, INC.,
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`Defendant.
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`COMPLAINT
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`The plaintiffs, thirty-four Massachusetts corporations that own 362 Boston taxi medallions
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`(collectively referred to as “Plaintiffs”), complain against defendant Uber Technologies, Inc.
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`(“Uber”), as follows. With the exception of the allegations concerning Plaintiffs, which are based
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`on personal knowledge, Plaintiffs’ allegations are based on information and belief, which they
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`have reason to believe are true.
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 2 of 34
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`INTRODUCTION
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`1.
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`Plaintiffs own 362 taxi medallions in the City of Boston. Plaintiffs have invested
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`substantial capital in acquiring taxi medallions, and in complying with City rules and state laws,
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`developed over the last eighty years, that protect consumers, ensure public safety, and provide
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`reliable and non-discriminatory taxi service.
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`2.
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`Uber operates a hackney carriage service in the City of Boston, consisting of Uber
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`black cars, Uber SUVs, and unlicensed personal vehicles owned or leased by individual drivers
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`and offered through services advertised by Uber as “UberX” and “UberXL.” During the period
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`from 2011 through August 4, 2016, Uber operated an illegal and unlicensed hackney carriage
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`service that violated state laws and Boston ordinances, and competed unfairly with Plaintiffs. The
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`period from 2011 through August 4, 2016, is hereinafter sometimes referred to as the “Unlawful
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`Conduct Period.”
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`3.
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`Throughout the Unlawful Conduct Period, the Massachusetts legislature had given
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`the City of Boston authority to regulate all vehicles “used or designed to be used for the
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`conveyance of persons for hire from place to place within the city of Boston.” See M.G.L. c. 40,
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`§ 22 and M.G.L. c. 159, Massachusetts Session Laws of 1930, Chapter 392 and the Session Laws
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`of 1963, Chapter 386.
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`4.
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`Pursuant to the powers vested in it by the Massachusetts legislature, the City of
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`Boston granted authority to the Commissioner of the Boston Police Department (“BPD”) to enact
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`Rule 403, known as the Hackney Carriage Rules and Flat Rate Handbook (“Taxi Rules”), which
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`applied to all “Hackney Carriages.”
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`5.
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`Under Rule 403, “Hackney Carriages” are defined as all vehicles “used or designed
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`to be used for the conveyance of persons for hire from place to place within the city of Boston.”
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 3 of 34
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`The Taxi Rules explicitly state that they are intended to be a “comprehensive and definitive listing
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`of all regulations affecting the Hackney Carriage industry in the City of Boston.”
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`6.
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` At all material times there were 1,825 licenses or medallions. During the Unlawful
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`Conduct Period, only an owner, licensee or lessee of a medallion could lawfully operate a taxi or
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`hackney carriage in Boston. Furthermore, only drivers who had a “hackney license” issued by the
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`City of Boston could lawfully drive a taxi or hackney carriage in Boston.
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`7.
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`Uber is a "hackney carriage" company because its driver-partners’ vehicles are
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`“used or designed to be used for the conveyance of persons for hire from place to place within the
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`city of Boston.” During the Unlawful Conduct Period, Uber operated an illegal hackney carriage
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`service without taxi medallions for Uber cars and without complying with Boston taxi regulations.
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`8.
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`Each Uber driver-partner operated a "hackney carriage" because his or her vehicle
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`was “used or designed to be used for the conveyance of persons for hire from place to place within
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`the City of Boston.” During the Unlawful Conduct Period, each Uber driver operated an illegal
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`hackney carriage without having a taxi medallion and without complying with Boston taxi
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`regulations. During the Unlawful Conduct Period, Uber also aided and abetted the Uber drivers’
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`operation of an illegal hackney carriage without having a taxi medallion and without complying
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`with Boston taxi regulations.
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`9.
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`By ignoring and flouting these legal requirements, Uber avoided the very
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`substantial expense associated with purchasing medallions and complying with the Taxi Rules.
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`This enabled Uber to flood the Boston market with thousands of unlicensed taxis, driven by
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`thousands of unlicensed taxi drivers. During the Unlawful Conduct Period Uber had, and it still
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`has, nearly 10,000 drivers in Boston, who did not meet Boston taxi licensing rules and used
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 4 of 34
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`vehicles that did not meet Boston taxi vehicle specifications. This enabled Uber and Uber drivers
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`to compete unfairly with Plaintiffs for passengers and for drivers.
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`10.
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`The BPD also establishes the fares that may be lawfully charged a passenger of a
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`taxi in Boston (“Taxi Fares”). Under the BPD regulations, during the Unlawful Conduct Period,
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`taxis or “hackney carriages” were required to charge only those Taxi Fares, and not more or less
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`than the Taxi Fares. In violation of these rate regulations, during the Unlawful Conduct Period,
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`Uber charged substantially less than the Taxi Fares for its UberX service during most time periods.
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`This unfairly enabled Uber to lure passengers away from Plaintiffs and Plaintiffs’ drivers. In
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`addition, during periods of high demand all Uber services, including UberX, unlawfully charged
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`what Uber called surge pricing, which often exceeded the Taxi Fares. This allowed Uber and its
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`drivers to compete unfairly with Plaintiffs by increasing the revenues of Uber and the Uber drivers
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`during high demand periods, while Plaintiffs’ drivers could only lawfully charge the lower Taxi
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`Fares despite the high demand for their services.
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`11.
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`Uber and the Uber drivers also unfairly competed against Plaintiffs and Plaintiffs’
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`drivers because Uber and its drivers avoided the costs which Plaintiffs and Plaintiffs’ drivers must
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`necessarily incur to comply with Boston taxi regulations. In violation of the rules and regulations
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`governing hackney carriage services in Boston in effect during the Unlawful Conduct Period, Uber
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`used drivers for its UberX and UberXL services who did not have taxi medallions or hackney
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`carriage driver’s licenses; allowed drivers to use vehicles that did not comply with hackney vehicle
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`regulations; did not have the costly commercial insurance required for licensed taxis; failed to
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`have required equipment required of licensed taxis; and did not have the costs of joining a required
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`radio association. This enabled Uber and the UberX drivers to charge less than the Boston Taxi
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`Fares, and compete unfairly for passengers. This also allowed Uber to compete unfairly with
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 5 of 34
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`Plaintiffs for drivers because Uber drivers were able to operate a hackney carriage at a substantially
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`lower cost than the costs which the regulations imposed both directly and indirectly on drivers of
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`licensed taxis. As a result, many drivers who previously drove for Plaintiffs ceased driving for
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`Plaintiffs and opted to drive for Uber.
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`12.
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`As a direct result of its unfair and unlawful conduct, by engaging in, aiding and
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`abetting, and conspiring to provide unlicensed hackney carriage services in Boston during the
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`Unlawful Conduct Period, Uber displaced much of the licensed hackney carriage market in Boston
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`and has become the dominant participant in the for-hire transportation market in Boston. Uber’s
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`conduct has severely damaged, and continues to severely damage, Plaintiffs.
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`13.
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`In summary, as explained in detail herein:
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` Uber and its drivers operated an illegal and unlicensed hackney carriage business
`in Boston
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` Uber violated regulations establishing the Boston Taxi Fares
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` Uber unfairly competed with medallion owners for drivers
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` Uber drivers did not meet Boston hackney licensing requirements
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` Uber vehicles did not meet Boston hackney requirements concerning vehicle age,
`condition, and installed equipment
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` Uber operated an illegal dispatching service
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` Uber avoided costs associated with not serving disabled and less wealthy
`customers
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` Uber did not require its drivers to obtain commercial insurance required of
`licensed taxi drivers
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`Plaintiffs have been severely damaged by Uber’s illegal and unlicensed operations
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`14.
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`and unfair competition. The conduct of Uber and the Uber drivers described throughout this
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`Complaint was the direct and proximate cause of Plaintiffs’ substantial damages in lost revenue
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 6 of 34
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`and profits and the precipitous decline in the value of Plaintiffs’ medallions. But for the conduct
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`of Uber and the Uber drivers described throughout this Complaint, Plaintiffs would not have
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`sustained the substantial damages in lost revenue and profits and the precipitous decline in the
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`value of Plaintiffs’ medallions.
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`PARTIES
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`15.
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`Plaintiffs Anoush Cab, Inc., Arams, Inc., Ararrat, Inc., Atlantic Cab, Inc., Barlow
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`Cab, Inc., Bedros Cab, Inc., Boylston Cab, Inc., Brigham Cab, Inc., Cleveland Cab, Inc, Diamond
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`Cab, Inc., Elsie Cab, Inc., Fenway Taxi, Inc., G&A Cab, Inc., Jordan Cab, Inc., Jubran Cab, Inc.,
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`Kilmarnock Cab, Inc., Little Island Cab, Inc., Locust Cab, Inc., Longwood Cab, Inc., M & AN
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`Cab, Inc., M.P.E. Cab, Inc., Marbed Cab, Inc., Massis, Inc., Mesrob, Inc., N.E. Cab, Inc., Oriole
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`Cab, Inc., Peterborough Cab, Inc., Queensbury Cab, Inc., Sahag, Inc., Sovereign Cab, Inc., V&A
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`Cab, Inc., Veras, Inc., Vickys, Inc., and Yellowbird Cab, Inc. are all Massachusetts corporations
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`with principal offices at 60 Kilmarnock St., Boston, Massachusetts.
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`16.
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`Plaintiffs collectively own a total of 362 City of Boston taxi medallions, as follows:
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`Anoush Cab (7), Arams, Inc. (9), Ararrat, Inc. (10), Atlantic Cab, Inc. (17), Barlow Cab, Inc. (15),
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`Bedros Cab, Inc (8), Boylston Cab, Inc. (5), Brigham Cab, Inc. (17), Cleveland Cab, Inc. (17),
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`Diamond Cab, Inc. (8), Elsie Cab, Inc. (8), Fenway Taxi, Inc. (8), G&A Cab, Inc. (7), Jordan Cab,
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`Inc. (6), Jubran Cab, Inc. (7), Kilmarnock Cab, Inc. (16), Little Island Cab, Inc. (7), Locust Cab,
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`Inc. (5), Longwood Taxi, Inc. (6), M & AN Cabs, Inc. (10), M.P.E. Cab, Inc. (11), Marbed Cab,
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`Inc. (8), Massis, Inc. (11), Mesrob, Inc. (11), N.E. Cab, Inc. (12), Oriole Cab, Inc. (15),
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`Peterborough Cab, Inc. (15), Queensbury Cab, Inc. (16), Sahag, Inc. (11), Sovereign Cab, Inc.
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`(17), V&A, Inc. (10), Veras, Inc. (11), Vickys, Inc. (6), and Yellowbird Cab, Inc. (15).
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 7 of 34
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`17.
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`Defendant Uber is a Delaware corporation with principal offices at 800 Market
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`Street, San Francisco, California. This Court has personal jurisdiction over Uber because Uber is
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`located in and does business in this judicial district.
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`JURISDICTION AND VENUE
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`18.
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`Jurisdiction is proper pursuant to 28 U.S.C. § 1332 (diversity jurisdiction), because
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`all Plaintiffs are Massachusetts corporations and Uber is a foreign corporation doing business in
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`Massachusetts, and the amount in controversy exceeds $75,000. Venue is proper pursuant to 28
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`U.S.C. § 1391.
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`FACTS
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`Regulation of Taxis in Boston
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`19.
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`The Boston taxi industry is highly regulated by state statutes and regulations, city
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`rules and ordinances, and multiple city-prescribed agreements that specify how taxi medallion
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`owners, radio associations, and drivers must operate together. These legal controls are designed to
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`protect consumers and ensure that taxi services in Boston will operate safely, reliably and in a
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`uniform and non-discriminatory manner. Plaintiffs have invested significant capital and resources
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`to develop systems and infrastructure that comply with the Taxi Rules’ numerous requirements.
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`20.
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`Under the Taxi Rules, Plaintiffs and other licensed medallion owners can lease their
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`taxis to licensed hackney carriage drivers. The Taxi Rules establish the maximum lease amounts
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`that medallion owners can legally charge licensed hackney carriage drivers, although the leasing
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`amounts can be lower. Leasing revenue is the principal source of income of Plaintiffs.
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`21.
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`Boston’s taxi regulations use four fundamental methods of ensuring that Boston
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`taxi service is safe, reliable, and fair:
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 8 of 34
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`a. First, the city issued a limited number of taxi licenses, called taxi medallions. A
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`taxicab could not operate legally in Boston without one of the 1825 city-issued taxi
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`medallions, and medallion owners must have cabs that meet strict requirements
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`concerning vehicle age, condition, and installed equipment.
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`b. Second, most taxis must be a member of an approved radio association (“Radio
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`Association”). There are currently seven approved Radio Associations. Each
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`approved Radio Association must: operate a single, GPS-enhanced radio dispatch
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`service for members of that Radio Association; create and require members to
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`adopt the same distinctive city-approved cab colors and trade names for all cabs in
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`that Radio Association; and operate from a Boston business address, with a
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`registered telephone number and registered agent for the Radio Association.
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`c. Third, every taxi driver in Boston must have a Hackney Carriage Driver’s License
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`and comply with extensive rules of conduct promulgated by the City of Boston
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`governing hackney carriage drivers.
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`d. Fourth, the City of Boston regulates the fares that taxis charge passengers. The fare
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`for every Boston taxi trip within Boston and to nearby suburbs (“Meter Rate
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`Communities”) is determined by a city-inspected and sealed Taximeter that
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`calculates the fare using uniform fares based on time and distance. Trips to more
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`distant towns are set by the Flat Rate Handbook.
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 9 of 34
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`Uber
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`22.
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`Uber is a hackney carriage service. Uber offers the following types of transportation
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`for hire vehicles to travelers in Boston: Uber black cars and Uber SUVs, which are livery car
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`services, and unlicensed personal vehicles owned or leased by individual drivers and offered
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`through hackney carriage services called UberX and UberXL.
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`23.
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`Uber dispatches vehicles for hire through its free smart phone application. Uber
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`users can summon a premium “SUV” that seats six passengers; a premium “black car” that seats
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`four passengers; an UberXL car that seats six passengers; or an UberX car that seats four
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`passengers. Using the Uber app, the user chooses the type of car he or she wants and Uber’s
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`computer system then selects an Uber-affiliated car to dispatch.
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`24.
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`Uber controls and directly manages Uber’s entire hackney carriage service,
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`including its drivers. Uber markets its hackney carriage services to passengers. Uber also markets
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`to and recruits drivers to provide the Uber hackney carriage services.
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`25.
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`Uber drivers have no control over the fares charged to passengers. Uber establishes
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`the fares using its pricing algorithm, and collects the fares from the passengers. Uber drivers are
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`paid by Uber, which splits the fares with its drivers. When Uber launched its UberX and UberXL
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`services in 2013 and 2014, Uber retained 20% of the fare and paid its drivers 80% of the fare. In
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`2015, Uber increased its share of those fares to 25%. Uber also charges a “safe rides” fee (which
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`has ranged from $1.00 to $1.15).
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`Uber’s Boston Operations
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`26.
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`Uber began its operations in Boston in 2011, with the introduction of its Uber black
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`car and Uber SUV services. When it began operation in Boston in 2011, Uber urged its customers
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`to use Uber black cars and Uber SUVs: “Our classic black car option is the default. Choose this
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 10 of 34
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`and either a high-end sedan or SUV will be curbside in minutes.” Uber’s black car and Uber’s
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`SUV services used commercially licensed and insured drivers, driving licensed livery vehicles,
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`but who did not otherwise comply with the Taxi Rules.
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`27.
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`Uber introduced its low-cost UberX service in Boston in or about March, 2013. The
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`UberXL service entered the Boston market in or about May, 2014. UberX and UberXL offered
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`hackney carriage services without complying with Boston licensing requirements and without
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`requiring the drivers of the UberX and UberXL hackney carriages to maintain commercial
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`insurance.
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`28.
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`Upon entering the market in 2013, Uber’s CEO, Travis Kalanick, expressly
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`recognized that ride-sharing drivers, like UberX drivers, could be subject to fines or criminal
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`misdemeanors for participating in unlicensed transportation for compensation. Uber also
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`recognized that Boston regulators had not approved those practices. Nevertheless, Uber entered
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`into the market without complying with, and without requiring its drivers to comply with, the
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`Boston Taxi Rules. Uber began operating its hackney carriage services in Boston knowing full
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`well that neither Uber nor its drivers were complying with the Boston Taxi Rules.
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`29.
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`In or about early 2013, Uber began promoting UberX, “the Low Cost Uber.” Uber’s
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`promotional material in early 2013 told every owner of a Prius, Camry, Altima, Taurus or Fusion
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`(2006 or later) with a Massachusetts driver’s license and a private insurance policy that they could
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`become an UberX driver simply by demonstrating “city knowledge and professionalism” and
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`completing a one-hour “on-boarding session.”
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`30.
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`Uber introduced UberXL in Boston in or about May 2014. In promotional
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`materials, Uber announced “UberXL is (you guessed it) an XL version of our UberX offering,
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 11 of 34
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`consisting of vehicles with seating for up to six passengers – think Honda Pilots and Toyota
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`Siennas.”
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`31.
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`Uber’s marketing was designed to convince consumers to see UberX and UberXL
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`vehicles as alternatives to taxis. Uber itself has admitted that the Uber vehicles function as taxis,
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`claiming to New York taxi regulators that the Uber system is a “virtual hail” equivalent to standing
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`on a street corner and flagging a cab.
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`32.
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`During the Unlawful Conduct Period there were about 10,000 Uber drivers in
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`Boston, and there are currently about 10,000 Uber drivers in Boston. Approximately 80% of
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`Uber’s drivers drive UberX vehicles. Almost all of Uber’s exponential growth in drivers has been
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`attributable to the spectacular growth since 2013 in UberX drivers.
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`Uber and its Drivers Operated An Illegal
`and Unlicensed Hackney Carriage Business in Boston
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`33.
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`Rule 403, Section 1(I)(b) defines a “Hackney Carriage” as any vehicle that is “used
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`or designed to be used for the conveyance of persons for hire from place to place within the city
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`of Boston.”
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`34.
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`All Uber vehicles are “hackney carriages” under Boston’s regulations, and could
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`not, during the Unlawful Conduct Period, operate legally without a taxi license known as a
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`“medallion” and a licensed hackney driver. The Boston Ordinance provides as follows:
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`In the City of Boston, no person, firm, or corporation driving or having charge of a taxicab
`or other private vehicle shall offer the vehicle for hire for the purpose of transporting,
`soliciting and/or picking up a passenger or passengers unless said person is licensed as a
`hackney driver and said vehicle is licensed as a hackney carriage by the Police
`Commissioner.
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`(City of Boston Code 16-15.05: Vehicle for Hire Ordinance) (Appendix I to Taxi Rules).
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 12 of 34
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`35.
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`During the Unlawful Conduct Period, no more than 1,825 medallions could legally
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`operate in Boston.
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`36.
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`Uber, and its UberX and UberXL drivers, do not own or lease any medallions.
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`Notwithstanding the legal limit on the number of medallions issued by the City of Boston, Uber
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`flooded the market with thousands of illegal hackney carriages, driven by nearly 10,000 drivers.
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`Uber, and its UberX and UberXL drivers, also did not comply with licensing requirements for
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`hackney drivers, fare regulations, equipment standards and requirements, commercial insurance
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`requirements and rules governing the enrollment in a Radio Association, all of which govern the
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`hackney carriage business in Boston.
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`37.
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`During the Unlawful Conduct Period, Uber operated an illegal "hackney carriage"
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`company as the term is defined by Rule 403, Section 1(I)(b), because its services were “used or
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`designed to be used for the conveyance of persons for hire from place to place within the city of
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`Boston,” without meeting the required medallions and licensing requirements, and without
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`complying with applicable hackney carriage regulations.
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`38.
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`During the Unlawful Conduct Period, Uber’s drivers illegally operated "hackney
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`carriages" as the term is defined by the Taxi Rule 403, because they drove vehicles that were “used
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`or designed to be used for the conveyance of persons for hire from place to place within the city
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`of Boston,” Rule 403, Section 1(I)(b), without meeting the required medallions or licensing
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`requirements, and without complying with applicable hackney carriage regulations.
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`39.
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`To comply with all the hackney regulations, Plaintiffs invested in medallions,
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`equipment, training, licenses and insurance, and charge only prescribed fares. Uber illegally
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`invaded the Boston taxi market by having unlicensed and illegal UberX and UberXL cars function
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`as hackney carriages driven by unlicensed hackney carriage drivers. Uber’s hackney carriage
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 13 of 34
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`service penetrated the Boston market because it unfairly competed with licensed medallion
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`owners, including Plaintiffs, by operating an unlicensed and illegal hackney carriage operation, by
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`ignoring both the requirement and legal limit on the number of medallions, by signing up an
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`unlimited number of Uber vehicles and unlicensed drivers, and by linking them to customers in
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`direct competition with taxis and in direct violation of Boston’s Taxi Rules. By operating an
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`unlicensed hackney carriage business in violation of applicable rules and regulations governing
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`the taxi industry, Uber also avoided substantial expenses associated with legal hackney carriage
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`operations and failed to abide by the legally mandated Boston Taxi Fares, giving Uber an unfair
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`advantage over Plaintiffs and other licensed medallion owners.
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`40.
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`During the Unlawful Conduct Period, Uber drivers defied the Taxi Rules. Uber
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`drivers were recruited by Uber to compete unlawfully and unfairly against licensed Boston cabs
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`by ignoring the Boston Taxi Rules and Boston Taxi Fares. By ignoring regulations and avoiding
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`the associated costs required to legally operate a taxi in Boston, Uber drivers competed unfairly
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`with Plaintiffs.
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`41.
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`As a result of their unfair competition, Uber and its drivers diverted revenue from
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`Plaintiffs and lured both taxi drivers and passengers away from Plaintiffs’ taxis, causing Plaintiffs
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`substantial damages in lost revenue and profits and causing a precipitous decline in the value of
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`Plaintiffs’ medallions.
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`Uber Violated Regulations Establishing the Boston Taxi Fares
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`42.
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`The fare for every Boston taxi trip is set by an inspected and sealed Taximeter or
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`the Flat Rate Handbook. Charges for trips to Meter Rate Communities must be displayed on a city-
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`inspected and sealed Taximeter that calculates the fare based on time and distance. Trips to more
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`distant towns are set by the Flat Rate Handbook. Since 2013, the basic metered Boston Taxi Fares
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 14 of 34
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`have consisted of an initial charge of $2.60, a rate per mile of $2.80, and a rate per minute of $0.47
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`while a taxi is stopped in traffic.
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`43.
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`Uber made no pretense of obeying the Boston Taxi Fares, charging instead varying
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`fares, which it set and collected, consisting of a flat rate plus additional charges per-mile and per-
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`minute, depending on the car’s speed, based on Uber’s pricing algorithm. Uber’s fares violated
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`the City of Boston’s regulations requiring uniform, non-discriminatory charges for taxi services.
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`44.
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`Uber black cars, Uber SUVs and UberXLs unfairly competed with Plaintiffs and
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`their drivers by failing to comply with these legally-mandated fares. Fares are set by Uber’s
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`proprietary algorithm.
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`45.
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`UberX unfairly competed with Plaintiffs and their drivers by establishing itself as
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`a low cost alternative to taxis, charging substantially less than the legally-mandated Boston Taxi
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`Fares as reflected in Table 1 below. Although UberX’s fares were initially higher than the Boston
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`Taxi Fares, by October, 2013 Uber had set its fares below the Boston Taxi Fares, and by mid-
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`2014, UberX had aggressively undercut the Boston Taxi Fares.
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`Table 1
`
`
`
`UberX (3/2013)
`UberX (10/2013)
`UberX (5/2014)
`UberX (8/2015)
`UberX (current)
`Boston Taxi Rate
`present)
`
`Base
`Charge
`$5.00
`$2.50
`$2.25
`$2.00
`$2.00
`$2.60
`
`Mileage
`Charge
`$2.60
`$2.05
`$1.45
`$1.24
`$1.24
`$2.80
`
`Charge Per
`Minute1
`$0.60
`$0.40
`$0.28
`$0.16
`$0.20
`$0.47
`
`Safe Rides
`Fee
`
`
`$1.00
`$1.00
`$1.15
`
`
`(2013-
`
`
`1 Uber charges the “per minute” rate whether or not the car is moving; The Boston Taxi Fares charge the “per minute”
`rate only while the taxi is stopped and idling.
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 15 of 34
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`46.
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`Uber also charged special fares to lure customers away from taxis. In June 2014,
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`Uber advertised that it had "dropped UberX fares by 25%, making it nearly half the price of a
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`taxi…these fares may only last a limited time, but the more you ride, the more likely they'll last."
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`In August, 2014, Uber advertised that it was "Dropping UberX fares by 15%, making it 40%
`
`cheaper than a Boston Taxi."
`
`47.
`
`In October, 2014, Business Insider reported that a typical taxi ride in Boston cost
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`1.5 times more than the cost of an equivalent UberX ride. When a tip is factored in, the Boston
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`taxi ride costs 1.8 times more than the cost of an equivalent UberX ride. With its further reduction
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`in fares in 2015, Uber unlawfully undercut the Boston Taxi Fares even more.
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`48.
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`Uber was able to charge those low fares for UberX in part because those fares were,
`
`in effect, subsidized by Uber’s “surge pricing.” When demand for car services increased, due to
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`the time of day, particular events occurring in the City, bad weather, etc., Uber would implement
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`increased fares or “surge pricing” (calculated by Uber’s algorithm), which were substantially
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`higher than the lawful Boston Taxi Fares. UberX’s surge pricing model allowed for fares as much
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`as ten times (10x) the standard Uber fare to be charged during periods of high demand.
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`49.
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`Thus, Uber and the Uber drivers generated substantial additional revenue during
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`periods of high demand. Surge pricing was an additional, unlawful violation of Boston Taxi Fares,
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`by which Uber unfairly competed against Plaintiffs, whose drivers could not, and did not, charge
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`more than the fares prescribed by the Boston Taxi Rules, no matter how high the demand for car
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`services at any particular time. The extra revenue generated by surge pricing, and the avoidance
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`of substantial costs of complying with the Boston Taxi Rules, allowed Uber to price its UberX
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`service at non-peak, non-surge time periods substantially lower than the Boston Taxi Fares. This
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 16 of 34
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`unfair competition significantly diverted revenue away from Plaintiffs and their licensed taxi
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`drivers and decimated the value of Plaintiffs’ medallions.
`
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`Uber Unfairly Competed With Medallion Owners for Drivers
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`Plaintiffs’ primary business is owning medallions and the taxi vehicles which
`
`50.
`
`conform to the Boston Taxi Rules, and leasing them to drivers who have a Boston hackney license.
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`Accordingly, a very significant aspect of Plaintiffs’ business is attracting and retaining licensed
`
`taxi drivers to lease and drive Plaintiffs’ licensed taxis.
`
`51.
`
`Plaintiffs compete in the job market for licensed taxi drivers to lease and drive
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`Plaintiffs’ licensed taxis. By its unlawful conduct described herein, Uber unfairly competed with
`
`Plaintiffs for drivers, which resulted in many people driving for Uber and not leasing Plaintiffs’
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`taxis.
`
`52.
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`As Uber acknowledged in a January 2015 report, there are “low barriers to entry”
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`for UberX drivers. This is because Uber did not require its UberX drivers to follow Boston Taxi
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`Rules governing medallions, hackney driver licensure, insurance, motor vehicle and equipment
`
`standards, and participation in Radio Associations. Thus, Uber easily attracted new drivers for its
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`UberX service. Uber flooded the market with new drivers, including thousands of drivers who did
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`not have a Boston hackney license and who drove their personal, unlicensed vehicles which did
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`not have the insurance or equipment required for licensed taxes, enabling them to enter the market
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`at virtually no cost and compete unfairly with licensed taxi drivers who operate licensed vehicles
`
`leased from Plaintiffs.
`
`53.
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`Uber also lured drivers away from Plaintiffs. According to a nationwide study
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`conducted by Benenson Strategy Group in 2014, (a) approximately 18% of Uber’s drivers
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`16 
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`Case 1:17-cv-10142-NMG Document 1 Filed 01/26/17 Page 17 of 34
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`previously drove taxis or black cars (in Boston, that would translate to approximately 1,800
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`drivers), (b) among the Uber drivers who previously drove taxis, 88% no longer drive for a taxi
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`company; and (c) among those Uber drivers who were formerly taxi drivers, 59% reported that
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`they made more take-home money driving an Uber than a taxi.
`
`54.
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`Uber unfairly competed with Plaintiffs for drivers. The reason that former taxi
`
`drivers switched to Uber is two-fold: first, Uber drivers did not incur the required costs associated
`
`with the legal taxi industry infrastructure that taxi drivers must incur directly or indirectly through
`
`their lease payment; and second, Uber flooded the market with cars that did not have medallions
`
`and which charged less than the Boston Taxi Fares, making it unfairly difficult for licensed taxi
`
`drivers, driving medallion licensed taxis, to compete for passengers.
`
`55.
`
`As a result of Uber’s unfair competition, Plaintiffs have been unable to lease their
`
`taxis for many taxi shifts, leaving many of their taxis underutilized or not used at all. This has
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`caused Plaintiffs significant loss of leasing revenue.
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`Uber Drivers Did Not Meet
`Boston Hackney Licensing Requirements
`
`Boston Taxi Rules require all drivers to hold a Hackney Carriage Driver’s License,
`
`
`56.
`
`which is only gran