Uber Technologies Inc. and its co-founder Travis Kalanick will have to defend a lawsuit that accuses them of running an antitrust scheme by using an app to set high surge fares.
A Connecticut man can move forward with a claim that the company sets prices through an illegal algorithm, US District Judge Jed Rakoff in Manhattan ruled on Thursday. Spencer Meyer is vying to seek damages on behalf of millions of riders nationwide.
Meyer’s lawsuit opens a new line of legal attacks on sharing-economy businesses. Uber, the world’s largest ride-hailing company, faces other lawsuits and regulatory challenges over its business model, including demands that its drivers be classified as employees instead of independent contractors.
New York Attorney General Eric Schneiderman and other regulators have also complained about Uber’s pricing algorithm, which ensures standard fares. In certain situations, such as bad weather or on holidays, the fares rise sometimes to many times their normal rate in a practice known as surge pricing The company pledged to limit the increases in emergencies under an agreement with Schneiderman in 2014.
Full Content: Bloomberg
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