## Facts

- Philadelphia’s traditional taxicab industry operated under a regulated medallion system requiring medallions and certificates of public convenience, with associated insurance, maintenance, wage, licensing, and operational restrictions.
- In 2014, Philadelphia had about 1,610 medallions, each allegedly worth roughly $545,000.
- Uber entered the Philadelphia for-hire transportation market offering rides arranged and paid for through a smartphone app; Uber did not own vehicles or directly employ drivers.
- Plaintiffs alleged Uber initially operated without obtaining medallions or certificates and therefore avoided costs borne by medallion taxicab companies.
- In 2016, Pennsylvania authorized Transportation Network Companies (TNCs), requiring licensing and certain insurance and safety compliance while allowing TNCs to set their own fares.
- Plaintiffs alleged market effects after Uber’s entry: drivers shifted from medallion companies to Uber, medallion taxi ride volume declined, and medallion values fell substantially.
- Plaintiffs sued Uber for attempted monopolization under Sherman Act § 2, alleging Uber “inundated” the market, used below-cost pricing, and recruited drivers to drive medallion taxis out and monopolize the market.

## Issues

1. Whether the complaint plausibly alleged attempted monopolization under Sherman Act § 2, including anticompetitive or exclusionary conduct, specific intent to monopolize, and a dangerous probability of achieving monopoly power.
2. Whether plaintiffs plausibly alleged antitrust injury sufficient for antitrust standing, as distinct from harm to competitors from lawful competition or regulatory change.

## Decision

- The Third Circuit affirmed dismissal under Rule 12(b)(6).
- The court held the complaint did not plausibly allege exclusionary or anticompetitive conduct; alleged conduct reflected competition that increased output, lowered prices, and offered a new service model.
- The court held plaintiffs failed to plead antitrust injury because the asserted losses (profits, rides, medallion value) flowed from increased competition and changed regulation, not harm to the competitive process.
- Because plaintiffs did not plead a cognizable antitrust injury, they lacked antitrust standing.

## Legal Principles

- An attempted monopolization claim under Sherman Act § 2 requires allegations of (1) anticompetitive or exclusionary conduct, (2) specific intent to monopolize, and (3) a dangerous probability of achieving monopoly power.
- Antitrust law targets harm to competition, not harm to individual competitors; business conduct that expands output, reduces prices, or improves consumer options is generally consistent with competition on the merits.
- Lower costs or a more efficient business model, including advantages produced by a different regulatory status, are not themselves exclusionary conduct under § 2.
- Antitrust injury requires harm of the type the antitrust laws were designed to prevent and that flows from the aspect of the conduct that makes it unlawful; losses attributable to lawful competition or regulatory change are not antitrust injury.
- Alleged regulatory noncompliance, without exclusionary conduct and competitive-process harm, does not convert a regulatory dispute into an antitrust violation.

## Conclusion

The Third Circuit concluded that plaintiffs’ allegations described a disruptive competitor entering a regulated market and gaining business through a lower-cost, app-based service rather than through exclusionary conduct, and that the incumbent medallion owners’ economic losses reflected competition and legislative re-regulation rather than an antitrust injury actionable under Sherman Act § 2.


Phila. Taxi Ass’n, Inc. v. Uber Techs., Inc., 886 F.3d 332 (3d Cir. 2018)