US Court Judge Refuses To Reject Lawsuit Filed Against CEO of Uber

A US court judge has rejected the claim by Kalanick that conspiracy involving a large number of drivers was impossible

On April 1, 2016, a US federal judge Jed Rakoff in Manhattan refused to reject an antitrust lawsuit against CEO of Uber, Travis Kalanick, which accuses the algorithm used by Uber for driving partners to calculate higher fares, according to reports.

Jed rejected the claim by Travis that a conspiracy involving many drivers was “physically impossible,” and “wildly implausible”, a claim filed by the official since the lawsuit was filed in December. In December, the lawsuit, which seeks class-action status, doesn’t name the transporter as a defendant.

The judgment allows Spencer Meyer, who belongs to Connecticut, to go ahead with his assertion that the algorithm used by the company to charge fares breaches antitrust rules used to defend customers from the manipulation of fares. On the behalf of a large number of people who were charged high fares, Spencer’s litigation seeks class-action status and damages.

Surge pricing is a terminology used for high prices, in some cases, several times more than the normal prices, which are charged at certain times like bad weather, holidays, or heavy traffic. While not driving any owned taxis, the company earns a commission from driving partners for every ride called by its app.

The organization faces regulatory challenges and lawsuit in many regions around the globe, including its home country United States where drivers have raised a demand to be identified as workers instead of contracted employees, the subject of class-action lawsuit up for trial in California in June.

The organization was the center of focus in protest launched by conventional taxi drivers in many places, including the United Kingdom, Italy, France, Canada, Brazil, France, and recently, Indonesia. In recent fundraising rounds, Uber has been given a valuation of more than $60 billion.

The lawsuit has opened a new series of legal battles on sharing-economy companies. The company contended that the lawsuit is flawed because Travis would need to personally compete with the organization’s driving partners for rides in order for the kind of conspiracy alleged in this case to be true.

Attorney General of New York, Eric Schneiderman and other regulatory bodies have also criticized the pricing algorithm of the company, which ensures standard fares under normal conditions. Uber promised to cut down the rises in emergencies, according to a contract with Schneiderman two years ago.

Meyer accused in his complain that Travis designed the organization “to be a price fixer” because Uber drivers “do not compete” but instead charge prices determined by the cab service’s algorithm.