Chilean taxi drivers lose unfair competition fight against ride-hailing apps

The union, Sindicato Chile Taxis, had denounced abuse of the dominant position of the apps through price fixing and predatory pricing, and accused Uber in particular of "executing acts of unfair competition through the infringement of rules applicable to cab drivers".

The Court for the Defense of Free Competition (TDLC) rejected the lawsuit filed by the taxi union, saying it “dismissed the claims and concluded that the plaintiffs did not provide sufficient background to prove the imputed conducts".

The verdict is deemed a victory for the ride-hailing apps, which can continue to operate in the country without new restrictions being imposed on their activities, and which will be welcomed by consumers, guaranteeing more options in the market for urban transportation.

Regarding unfair competition, the court considered that "the trial of infringements to regulations other than those of free competition requires that such infringements are known and declared by the competent authority through a final and enforceable decision, and that the evidence provided by the plaintiffs did not allow to prove such acts of unfair competition".

"In addition to the fact that the plaintiffs did not provide sufficient evidence, such accusation could not be reproached in this venue given the way in which it was raised in the complaint filed by Sindicato Chile Taxis," the TDLC said in a statement.

The ruling was reached because "dominance was not imputed to any of the defendants specifically, nor was collective dominance imputed to all of them, which is an essential prerequisite to this type of wrongdoing”, and that “the plaintiff did not provide any evidence on the elements that must be present to prove the existence of a dominant position".

The ruling backed up comments made by the TDLC’s minister Ricardo Paredes, who had earned that "abusive conduct by different companies that, without being coordinated, could abuse through such conduct, should not be ruled out a priori".

Chilean law firm Pellegrini & Rencoret acted as local counsel to Cabify and Easy Taxi, with a team led by partners Julio Pellegrini and Pedro Rencoret, and who was assisted by partner Diego Ramos and associate María Jesús Cifuentes.