Portland attorney Andrew Schmidt is taking on multibillion-dollar ride-sharing behemoth Uber, and he’s using the company’s own legal arguments against it.
In a lawsuit filed in U.S. District Court in New York on behalf of Connecticut Uber user Spencer Meyer, Schmidt writes that if the drivers are all independent contractors — as the company has aggressively argued in previous court battles — their use of common rates for passengers qualifies as collusion and price-fixing. You can’t do that under federal antitrust laws, Schmidt argues.
Uber denies any wrongdoing.
“These claims are unwarranted and have no basis in fact,” Uber spokesman Matt Kallman told The Huffington Post in a written statement. “In just five years since its founding, Uber has increased competition, lowered prices, and improved service.”
Uber has fought hard to keep drivers from organizing as unions and bargaining for employee benefits. To that end, the company reportedly agreed to pay $100 million just this week to settle a pair of class action lawsuits and maintain its right to call the drivers independent contractors.
But if the drivers are indeed independent of each other, they should be able to competitively bid against each other for customers, Schmidt is arguing.
“If Uber were to become a transportation company and employ drivers, it would be free to compete with other companies using its pricing algorithm,” the complaint reads, in part. “But Uber has refused to become a transportation company. Consequently, drivers using the app are independent firms, competing with each other for riders. They should compete on price … Instead, they have agreed to [Uber CEO Travis] Kalanick’s scheme to fix prices among direct competitors using Uber’s pricing algorithm. Uber’s price fixing is classic anticompetitive behavior.”
Schmidt writes the company’s surge pricing, which hikes up ride prices during periods of high demand, is particularly troubling given this context. An independent driver should be able to drum up extra business by offering a lower rate than others during those periods, but isn’t allowed that possibility under Uber’s program.
Schmidt’s lawsuit was only recently filed (in legal terms) and has a long way to go before the court decides its merits, but the Portland attorney already has a victory under his belt. Federal Judge Jed Rakoff denied Uber’s motion to dismiss the case and called for a November trial, according to the Huffington Post.
Uber came to Portland in 2014 and many taxi drivers opposed the company’s arrival, arguing Uber drivers would unfairly compete for customers without being subject to the same regulations. The company has since expanded ride services to a number of other Maine communities, and the state Legislature later approved a slate of insurance requirements Uber and other ride-sharing companies like it would need to comply with.