Uber 'not to blame' for downfall of taxi booking app

A taxi booking app was already facing challenges as UberX brought rideshare to Australia with an intent to "crush" the competition, a civil trial has been told.

Taxi Apps, the company behind the app GoCatch, is suing Uber in the Supreme Court of Victoria over claims it knowingly launched UberX illegally in Australia with the intention of injuring GoCatch.

Lawyers for GoCatch have claimed "tech bros" at the rideshare giant said they wanted to crush and destroy the business, suggesting they targeted Taxi Apps, but Uber on Thursday argued the language simply equated to "out-compete".

"It's just the language of the business ... it's the way they hype each other up," Uber's barrister John Sheahan KC told the court.

"'Crushing' GoCatch is beating them. Its out-competing them at their own game."

Mr Sheahan said GoCatch and UberX effectively operated in "different dimensions" with the latter starting up in Sydney in April 2014.

Uber app displayed on a phone
Rideshare giant Uber is defending in a civil case brought by a taxi app over its business practices.

Taxi Apps' lawyers earlier pointed out peer-to-peer ridesharing did not become legal in NSW until December 2015, and then later in other Australian states.

Mr Sheahan suggested GoCatch was to blame for its financial failings, with business plans to mandate in-app payments long-delayed and evidence some taxi drivers were "gaming" the app.

GoCatch's decline in performance was not because of UberX drivers in the market, and it showed its ability to grow while UberX was around, Mr Sheahan said.

GoCatch lost market share to other taxi operators, he said.

By April 2014, GoCatch had monthly growth of about 35,000 drivers - "objectively small numbers" - and was making about 40 cents in revenue for every job, the barrister said.

The next month, GoCatch was seeking equity capital raising of up to $6 million, and there was no suggestion by that time the business thought UberX was going to destroy it, Mr Sheahan said.

"It wasn't an UberX problem, it was an internal problem with GoCatch," the barrister said.

Investor Paradice was "flamboyantly critical" of the business despite continuing to invest in it, Mr Sheahan said.

Paradice staff member Rishi Khilnani wrote in an email in August 2014 the firm had to invest more money in GoCatch because "there is literally no-one else willing to fund the business".

In April 2015, global investment firm Square Peg Capital partner Dan Krasnostein said he believed the GoCatch ship had sailed or burned.

"They had a market for the taking with a relative benign competitive dynamic for a few years - Ingogo not focused on bookings and Uber weren't doing that well yet," Mr Krasnostein said in an email shown to the court.

"It's not the idea ... it's the execution."

Traffic on the Pacific Highway.
Business issues and challenges faced by Taxi Apps have been revealed in its civil case against Uber.

There was to-ing and fro-ing about who of GoCatch's two chief executives and co-founders, Andrew Campbell and Ned Moorfield, would step down and when, Mr Sheahan said.

Mr Moorfield in a June 2014 business plan said GoCatch's growth had suffered from an ineffective management structure and lack of focus.

Executives later looked at GoCatch's driver validation processes as a potential reason behind its low conversion rates, Mr Sheahan said.

GoCatch introduced its own rideshare model, dubbed "GoCar", in NSW in 2016, according to court documents.

By August that year, though, GoCar's job numbers had flatlined, Mr Sheahan said.

Lawyers for Taxi Apps have conceded in court GoCatch had some management issues.

However, they maintain Uber tried to evade authorities' attempts to stop their illegal conduct, hacked GoCatch's computer systems and used spyware to scrape its data.

Uber is defending in the court case, and says it rejects any suggestion it should be liable for the failure of other businesses.

The civil trial before Judge Lisa Nichols is due to run for 10 weeks.

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