Uber Adds A Price Fixing Scandal To Its Growing Legal Problems

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Uber hasn’t had a good year, but even though it’s changed leadership and taken other steps to fix itself, things are not getting better. The latest news won’t help: Uber is being investigating by not one, not two, but five separate federal probes, including a price-fixing probe that’s likely to get much worse for the ride-sharing company.

Bloomberg has a long piece about the probes, two of which weren’t publicly known before:

  • A look at Uber’s attempts to track which of its drivers were also working for Lyft.
  • And, if that weren’t enough, they’re also facing a price-fixing charge. As Bloomberg explains:

    Using one tool, called Cascade, the company set fares for drivers using a longstanding formula of mileage, time and demand. Another tool called Firehouse let Uber charge passengers a fixed, upfront rate, relying partly on computer-generated assumptions of what people traveling on a particular route would be willing to pay.

In other words, while Uber was promising that the “free market” and demand for cars was setting the prices, it was really just throwing a price at you and hoping you wouldn’t notice. That’s only going to add to its legal bills, as consumer advocates will use the federal investigation as a springboard to legal action for civil suits. That’s the last thing Uber, which is worth billions but struggles to break even year to year, needs on its balance sheet. Nor does it appear that Uber has hit rock-bottom just yet, as these probes are ongoing and may uncover more issues. After all, at the beginning of the year, all Uber had to worry about was bad publicity. At this rate, switching to Lyft seems like a matter of when, not if.

(via The Verge)