Uber Has Been Compared To Silk Road

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Uber frequently finds itself in the news and many a time for the wrong reasons. The latest beating that it took was when a judge recently, during the course of the hearing (in an antitrust case being heard out at New York), compared Uber to Silkroad, the now defunct online black marketplace.


BN-GD837_skuber_P_20141224020938The allegations were made against Travis Kalanick, the CEO of Uber and other Uber drivers as regards their price-surge policy. A class-action suit was filed as a violation of the Sherman Antitrust Act (Section 1). The acts were seen as a conspiracy in illegal price fixing by the accused.

How illegal the whole case may be, there are interesting facts that make up the case. Uber is known to organize meet-ups called “partner appreciation,”wherein the participants agree to reinforce their commitment to the agreement that may in fact be illegal or unlawful. All Uber drivers sign an agreement as part of the terms of employment, which purportedly gathers the implicit agreement of the signees to support price-fixing. As such, it was easy to get the drivers to agree to the cab company’s terms and policies. Further, there are other pending lawsuits and regulatory offences charged against the company and its business model that await legal hearing.

Uber, however, counter-argued that the drivers are being accused of conspiring with Travis to increase the fares and this just does not make any sense. At this instance, Uber’s argument was dismissed and a comparison was drawn with the now defunct darknetsite Silkroad. The judge compared the case with the Silkroad creator, Ross Ulbricht, currently serving a life sentence in prison.


ross-ulbrichtIn the Silkroad case, the government accused Ross Ulbricht as the ultimate leader of a single conspiracy that was responsible for all the vendors included in Silkroad who sold any type of narcotic substance. Judge Jed Rakoff compared this to Travis and the Uber drivers. The digitally decentralized Uber app was in many ways similar to Silkroad. The Uber app resembled a marketplace that was used by Travis to hatch a conspiracy along with all of the Uber drivers.

Another point of comparison that was drawn was that Silkroad was not just a website or platform that sold drugs. The vendors along with the Silkroad site owner had conspired to sell drugs using the Silkroad façade. Similarly, the price surge did not just happen on the call-a-cab platform, all the Uber drivers purportedly conspired together to create the price surge. To be fair, the judge concerned cited many other cases where they weren’t Tor-hidden websites like Silkroad and the group conspiracy angle was absent. However, things do not look rosy for the Uber head Travis Kalanick. The litigation is well on its way and a trial has been scheduled for the 1stof November this year.

With Judge Jed Rakoff of the U. S. District Court in Manhattan denied a bid to dismiss a class action suit against Travis Kalanick which alleged that Uber’s smartphone app was being used to coordinate high surge prices with hundreds of drivers all over the world, this case, opens a new line of allegations and legal attacks on many businesses that function on the sharing-economy models.