Mobile Commerce

Uber CEO Faces Price Fixing Lawsuit

Uber's CEO is going to have to face the music — or, at the very least, hear it, for starters — regarding price-fixing allegations.

Reuters reports that, on Thursday (March 31), a Manhattan judge denied Uber CEO Travis Kalanick's request for dismissal of a suit alleging that he and the drivers for the ride-sharing service (Uber itself is not named as a defendant) have colluded to jack up prices.

The suit — which has been brought forth by passengers led by one Spencer Meyer of Connecticut and is seeking class-action status on behalf of Uber passengers nationwide, as well as a subclass of passengers that have been subjected to surge pricing — claims that Uber drivers have conspired with Kalanick to rely on the use of a price-determining algorithm within the Uber app and encouraged their fellow drivers to do the same, even in circumstances when doing so is not objectively within an individual driver's best interests.

Ruling that the plaintiffs "plausibly alleged a conspiracy" related to price fixing, U.S. District Judge Jed Rakoff is allowing the suit to move forward, which, Reuters notes, also alleges that Kalanick's actions have led to Uber having an unfair advantage over (one-time, aspiring) rivals, like Sidecar.

"The advancement of technological means for the orchestration of large-scale price-fixing conspiracies need not leave antitrust law behind," wrote the judge as part of a statement shared by the outlet.

"We disagree with this ruling," Uber said in response to a request for comment on behalf of Kalanick and the San Francisco-based company that Reuters additionally shared. "These claims are unwarranted and have no basis in fact."

Meyer's lawyer, Andrew Schmidt, also commented on the decision, stating: "In creating Uber, Kalanick organized price fixing among independent drivers who should be competing with one another on price. Today's decision confirms that apps are not exempt from the antitrust laws."

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