A great analysis of a hugely important case being heard in the near future:
The immediate threat takes the form of an antitrust class action lawsuit against its co-founder and CEO, Travis Kalanick, which will be litigated in the Manhattan courtroom of Federal District Judge Jed Rakoff starting on November 1. At issue is Uber’s mobile app, through which customers order on-demand car rides, and which customer Spencer Meyer alleges amounts to a price-fixing conspiracy. The question is whether independent Uber drivers using the app, all charging the same price and implementing “surge pricing” at the same time, are violating the Sherman Antitrust Act’s prohibition against any “combination … or conspiracy … in restraint of trade.”
The lawsuit puts Uber and other companies in the online economy on a collision course with antitrust law. It also raises fundamental questions about how American companies treat their workers. It’s not surprising that tech companies can make a great deal of money by skirting employment, antitrust, and even anti-discrimination laws. But do we want them to? Some argue that the Uber conundrum calls for the creation of a third “independent worker” category of employment that gives it the control it needs to make its business model work, while safeguarding the flexibility its drivers prize. If courts and policymakers agree, it would effectively carve out a tech-sector exception to the regulatory principles governing the economy since the New Deal and the Gilded Age.
The questions asked at the end are precisely the ones currently preoccupying me:
Are the new behemoths of the tech sector innovators that make the economy more efficient by “disrupting” antiquated business models? Or are they just the trusts of a second Gilded Age, their new-fangled apps the equivalent of the railroad networks that monopolized commerce and access to markets 126 years ago, when the Sherman Act first took effect?
Mark Carrigan 