Uber CEO to face price-fixing antitrust lawsuit
A US judge has cleared the way for antitrust lawsuits against Uber’s chief executive after the ride-hailing company failed to win dismissal of price-fixing charges. US District Judge Jed Rakoff ruled that Travis Kalanick must face claims he conspired with drivers to ensure they charge prices set by an algorithm in the Uber smartphone app. Rakoff said the plaintiffs “plausibly alleged a conspiracy” to fix prices in this manner and could also pursue claims that Kalanick’s actions drove out rivals such as Sidecar, enabling Uber to command 80% of US app-generated rides. “The advancement of technological means for the orchestration of large-scale price-fixing conspiracies need not leave antitrust law behind,” the judge wrote. Meyer’s lawsuit seeks class-action status on behalf of Uber passengers nationwide who have used the app, and a subclass of passengers subjected to surge pricing. Uber disputes the claims stating they “have no basis in fact.”

Summary: A New York judge said Uber CEO Travis Kalanick must face an antirust lawsuit alleging he conspired to fix prices.

Uber passengers won a victory on Thursday against the ride-sharing company’s CEO Travis Kalanick. Kalanick faced an antitrust lawsuit that accused him of scheming to drive up prices, Reuters reports.

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Passenger Spencer Meyer of Connecticut said that drivers conspired with Kalanick to ensure they charge prices set by the app’s algorithm. This alleged conspiracy to fix prices led to things such as surge pricing and driving out rivals such as Sidecar, Manhattan U.S. Judge Jed Rakoff said in his ruling.

Meyer’s lawsuit seeks class-action status for any Uber passenger around the country. His lawyer, Andrew Schmidt, said that Kalanick creating a price-fixing scheme by organizing independent drivers who should be competing with each other for price.

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Although not listed as a defendant, Uber, which is valued at $50 billion, said in a statement that they disagree with the ruling and the claims “have no basis in fact.”

Judge Rakoff said in a footnote that Uber passengers agreed to a clause in their user agreements that they would resolve disputes through arbitration. However, Kalanick did not seek to compel arbitration, and the passengers were still allowed to sue him in federal court.

As we reported back in January, the groundbreaking technology company seems to be a magnet for lawsuits with complaints from customers, competitors, and drivers. The biggest suit it is facing is a class action filed by attorney Shannon Liss-Riordan which is set to go to trial later this year. The suit accuses the company of misclassifying 160,000 employee drivers as independent contractors.

Source: Reuters

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