Francis Shwe, left, directs ride-hail drivers to a parking lot where We Drive Progress, an organizing group for Lyft and Uber drivers, is distributing masks, hand sanitizers and gloves in June. The state Supreme Court recently allowed a ruling to stand that said taxi companies can’t sue Uber and Lyft for undercutting their prices.

The state Supreme Court rejected an appeal by taxi companies Wednesday of a ruling that shields Uber from claims of illegally cutting prices in order to damage its cab-driving competitors.

Lawsuits in 2017 by Yellow Cab and Friendly Cab Cos., and a proposed class-action suit by a San Francisco taxi driver, accused Uber of violating a 1937 California law that prohibits setting prices below the cost of service “for the purpose of injuring competitors or destroying competition.”

The law, however, does not apply to any product or service “for which rates are established under the jurisdiction of the (California) Public Utilities Commission.”

Uber is considered a transportation network company under state law. The state utilities commission has jurisdiction over its rates and has been studying the ride-hailing company’s rate-setting procedures for the past seven years, but has not acted to regulate those rates or announced any intention to do so.

A state appeals court ruled in March that the law giving the state commission authority over Uber’s rates had the effect of barring suits by competitors over those rates. The companies and the taxi driver appealed to the state’s high court, but the court said Wednesday that only Justice Mariano-Florentino Cuéllar had voted to take up the case, three short of the majority needed for review by the seven-member court.

The appellate ruling is now binding on trial courts statewide.

In its March 23 ruling, the First District Court of Appeal in San Francisco cited three previous decisions by Bay Area federal judges in suits by other competitors of Uber. While not binding precedent, the rulings were persuasive, the court said.

In one of those rulings, dismissing a suit by a limousine company challenging Uber’s rates, U.S. District Judge Edward Chen of San Francisco said in June 2019 that those rates are “established under the jurisdiction of [the] CPUC irrespective of whether the CPUC actually exercises its rate-setting authority.”

In deciding whether rate-setting is in the public interest, Chen said, the commission considers whether its abstention would damage competition or harm consumers.

The appeals court also noted that the rates of publicly owned utilities are exempt from price-cutting suits under state laws, even if those rates are not set by the state Public Utilities Commission. Protecting companies like Uber from such suits will “ensure that privately-owned and publicly-owned public utility corporations are treated the same” under the law, Justice Kathleen Banke said in the 3-0 ruling.

Lawyers for the taxi companies and Uber were not immediately available for comment.

The order was issued in Uber Technologies Pricing Cases, S251906.

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @BobEgelko

Original Article

LEAVE A REPLY

Please enter your comment!
Please enter your name here