CT Blue

I just heard about this, and, as a lawyer, I am mightily impressed:

Travis Kalanick, the chief executive of Uber, failed on Thursday to win the dismissal of an antitrust lawsuit accusing him of scheming to drive up prices for passengers who use the popular ride-sharing service.

U.S. District Judge Jed Rakoff in Manhattan said Kalanick must face claims he conspired with drivers to ensure they charge prices set by an algorithm in the Uber smartphone app to hail rides, including “surge pricing” during periods of peak demand.

Passengers led by Spencer Meyer of Connecticut claimed that drivers conspired with Kalanick to charge fares set by the algorithm, with an understanding that other Uber drivers would do the same, even if they might fare better acting on their own.

via Fortune

The delicious part about this is that they are taking advantage of the legal fiction that Uber drivers are truly independent contractors. By any reasonable standard they aren’t, but Uber sticks to that fiction, so that it can avoid paying decent wages and benefits. To rub salt in the wounds of the “contractors”, they also apparently lead their customers to believe that a tip is built into the pricing structure, when in fact it is not. So that’s one petard hoisted.

Why, you might ask, is the Uber CEO a defendant, and not Uber itself. Well, that’s yet another petard hoisted:

“In creating Uber, Kalanick organized price-fixing among independent drivers who should be competing with one another on price,” Meyer’s lawyer Andrew Schmidt said. “Today’s decision confirms that apps are not exempt from the antitrust laws.”

Uber was not named as a defendant, despite being valued at well over $50 billion in recent funding rounds.

Rakoff said in a footnote that Uber passengers are subject to “user agreements” requiring them to resolve various disputes through arbitration.

In other words, Kalanick is a defendant because he deprived people, by stealth, of their right to go to court against Uber but he forgot to exempt himself.

So, hats off to Andrew Schmidt, or whoever came up with this idea. It won’t happen, but it would be nice to see them truly hammer Kalanick. Rakoff might rule for the plaintiffs, but the Appeals Court will reverse.

As a side note, this tendency to deprive people of their rights to go to court (a feature, we’re told, and not a bug in the TPP) is becoming more and more widespread. It should be among the injustices people like Bernie rail against, though most people are not informed enough to resent it. It is endemic in our system right now. I recently found, buried in the fine print of an owner’s manual for a hard drive I bought, that by buying the drive I had agreed to arbitrate any disputes I might have. On closer inspection, I could have also discovered this on the outside of the box, had I Superman’s super vision. And here’s a story of hedge fund managers shifting the responsibility for their own criminal behavior onto investors who had no part in their wrongdoing, yet another way of cooking the legal books to exempt the .01% from responsibility for their crimes.