A federal judge in the US 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.

In the antitrust litigation, meanwhile, drivers don't compete with one another but charge passengers fares tallied by an algorithm. While the drivers charge the same, the plan allegedly violates antitrust law because Uber classifies its drivers as independent contractors—yet they don't compete on fare pricing, according to the suit.

"The fact that Uber goes to such lengths to portray itself—one might even say disguise itself—as the mere purveyor of an 'app' cannot shield it from the consequences of its operating as much more,” the judge said. The case includes allegations of surge-pricing during heavy demand and that Kalanick had destroyed rivals like Sidecar.

For his part, Kalanick said Uber doesn't have anti-competitive practices but instead has provided a "service for millions of Americans" (PDF):

Uber Technologies, Inc. (“Uber”) is an innovative technology company that connects independent driver-partners and riders through its smartphone application. As a new entrant in the transportation marketplace, Uber has vastly increased options, reduced prices and improved service for millions of Americans.1 Antitrust law has long appreciated the procompetitive benefits that come along with technological innovation and new market entry. Plaintiff’s First Amended Complaint (“Amended Complaint”) nonetheless invokes that same antitrust law to attack Uber’s innovative technology and its benefits to consumers and competition. The Amended Complaint attempts this feat by continuing to allege a wildly implausible—and physically impossible—conspiracy among hundreds of thousands of independent transportation providers all across the United States (“driver-partners”), based solely on the fact that they agreed to use Uber’s pricing algorithm, and at some point in time accepted ride requests via the Uber App. This lawsuit, if allowed to proceed, would strangle innovation, decrease competition, and increase prices—defeating precisely the behavior antitrust law is designed to encourage. For this reason—and because the Amended Complaint continues to fail to state a claim under the antitrust laws—it must be dismissed.

The six-year-old company faces a June federal court trial in San Francisco in which drivers are seeking employment status that could provide them a host of benefits, including vacation and overtime.