Failed Australian rideshare app accuses Uber of illegally operating service to gain unfair advantage

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This article was published 02/04/2024 (623 days ago), so information in it may no longer be current.

MELBOURNE, Australia (AP) — A failed Australian taxi-industry disruptor told a court on Tuesday that Uber began illegally operating its ridesharing service in Australia a decade ago to gain an unfair advantage over competitors.

Taxi Apps, an Australian startup that developed taxi-hailing app GoCatch, lodged a 196-page statement of claim in the Victoria state Supreme Court in which it alleges Uber knowingly launched UberX illegally in Australia in 2014. The San Francisco-based rideshare giant was also accused of serious misconduct including corporate espionage and hacking of competitors’ systems.

The trial, which opened Tuesday, is scheduled to last for 10 weeks and comes two weeks after Uber agreed to pay 272 million Australian dollars ($178 million) to settle a class-action lawsuit brought by 8,000 Australian taxi and rental car drivers.

The drivers had demanded compensation for losses since Uber landed in Australia in 2012, first with limousine service Uber Black, followed by the taxi service Uber Taxi, then the rideshare service UberX without professional drivers.

Taxi Apps lawyer Michael Hodge told the court on Tuesday that Uber lawyers agreed on Monday to a statement of facts similar to that behind the class action settlement.

Neither statement of facts has yet to be released by the court.

Hodge said Uber got a head start of at least 20 months over its competitors in Australia’s emerging transport app market by launching UberX when ridesharing was illegal in some Australian states.

“Uber is a company that quite deliberately set out to break the law in the hope that they could do it at such mass scale that they would ultimately be able to pressure people to allow them to then operate lawfully, and they did so intending to gain a competitive advantage,” Hodge told the court in opening his case.

“They appear to remain completely unrepentant about that and it ought, to pick up the language of exemplary damages, be something that shocks the conscience,” Hodge added.

Hodge said if Uber had complied with Australian law, GoCatch would have continued its growth trajectory, accumulated drivers and eventually launched a ridesharing product when the law allowed.

But UberX now dominates the Australian rideshare market and GoCatch, launched in 2014, departed the transport industry in 2021.

Uber lawyers have yet to address the court. But Uber said in a statement on Tuesday it would “vigorously defend the matter in court.”

“Uber firmly rejects any suggestion that we should be liable for the failure of other P2P businesses to adapt to an emerging competitive landscape,” the statement said, referring to peer-to-peer rides without professional drivers.

GoCatch co-founder Andrew Campbell said he was glad that Uber had been brought before the courts.

“Uber has never accepted responsibility for its conduct towards GoCatch. Uber’s first priority was to win at any cost using any method to destroy us as a competitive threat,” Campbell said in a statement.

“We are fortunate to be in a position to go to court as we believe that is the only pathway for Uber to be held accountable,” Campbell added.

Uber is accused of obtaining the phone numbers of GoCatch drivers through spyware and of attempting to recruit them. Emails between Uber executives reveal GoCatch was considered a major threat.

“I want to destroy them before they get too legit,” Uber’s former Australian general manager David Rohrsheim said in an email to colleagues in 2013.

“We are heading towards UberX but we need to crush GoCatch first,” Rohrsheim also wrote.

The trial will continue on Wednesday before Justice Lisa Nichols without a jury.