Judge calls Uber algorithm “genius,” green-lights surge-pricing lawsuit

(credit: Oran Viriyincy)

A federal judge is allowing surge-pricing litigation to move forward against Uber's cofounder, Travis Kalanick. The federal judge presiding over the suit, which alleges Uber's technology unlawfully coordinates fares and surge-pricing fares, agreed that Uber's algorithm was "genius."

"Defendant argues, however, that plaintiff's alleged conspiracy is 'wildly implausible' and 'physically impossible,' since it involves agreement 'among hundreds of thousands of independent transportation providers all across the United States.' Yet as plaintiff's counsel pointed out at oral argument, the capacity to orchestrate such an agreement is the 'genius' of Mr. Kalanick and his company, which, through the magic of smartphone technology, can invite hundreds of thousands of drivers in far-flung locations to agree to Uber’s terms," US District Judge Jed Rakoff of Manhattan ruled (PDF) Thursday. "The advancement of technological means for the orchestration of large-scale price-fixing conspiracies need not leave antitrust law behind."

Trial is set tentatively for November. Rakoff has yet to rule on whether the lawsuit (PDF) could grow to represent millions of US Uber passengers in a nationwide class-action lawsuit. For the moment, Rakoff's ruling allows the antitrust case of a Connecticut passenger to proceed. Uber also faces regulatory challenges and lawsuits about the classification of its drivers as contractors and not employees.

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