BOSTON (CN) — The First Circuit ruled Friday that Uber was not illegally competing with Boston cab drivers in the years prior to a statute that would help regulate ride-sharing.
“We are faced with the narrow question of whether Uber's entrance and conduct in the transportation market during a period of regulatory uncertainty violated the statutory and common law governing the commercial marketplace,” Judge Gary Katzmann said. “We conclude that it did not.”
Over 30 cab companies — all owned by the Tutunjian family which controls 362 of the more than 1,800 taxis in the city — sued Uber in 2017 claiming that when the company dropped in the city in 2013 it devastated the taxi industry.
Prior to 2016 when Massachusetts enacted a law that would help regulate transportation network companies, or TNCs, such as Uber, ride-sharing apps were not held to the same rules as taxi cabs. Specifically, Uber was able to skirt the thousands of dollars in medallion fees that were the standard for all ride-for-hire services in the city because Uber was not required to have medallions.
The cabs say the lack of regulation caused unfair competition and lost them millions.
A federal judge sided with Uber in 2019 saying they did not act egregiously and that they relied on city officials who approved their ride-sharing app to operate in the city.
In December the cab drivers took their appeal to the First Circuit hoping for a reversal, but that was shot down Friday in a unanimous ruling.
Writing for the three-judge panel, Katzmann said the federal judge made the right call, agreeing that Uber's actions were not bad enough to meet the requirements of unfair competition.
Katzmann, who usually sits on the Court of International Trade, remained unpersuaded by the cabs’ argument that Uber violated certain taxicab legislation.
“While protection from competition need not be the only purpose, the plaintiffs have not shown that the taxicab regulations allegedly violated by Uber were enacted to protect against unauthorized competition,” the 52-page opinion stated.
The court Friday also denied the cabs’ request for over $122,000 in damages, simply putting that damages could not be given because they failed to show Uber was liable.
Still Katzmann, an Obama appointee, pointed out it is still up for debate on whether or not ride-sharing apps have helped or hurt society.
“There has been vigorous argument whether the new world created by TNCs has been good for the transportation industry as a whole or for the larger public; dispute regarding the impact of TNCs on road congestion and public transit usage; questions whether TNCs are being regulated appropriately in the best interests of public safety; and debate whether the legislature acted sufficiently, or should have acted, to protect the interests of taxicab owners who were affected by the TNCs,” said Katzmann. “These are no doubt important issues of public policy. “
The cab drivers were represented by Michelle Blauner of Shapiro Haber and Uber was represented by Karen Dunn of Paul Weiss. Neither party immediately responded to emails seeking comment that was sent after business hours.
U.S. Circuit Judges O. Rogeriee Thompson, an Obama appointee, and Chief Judge Jeffrey Howard, a George W. Bush appointee, joined Katzmann on the ruling.
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