As far as user experience, this wasn't a bad idea. It's fairly common in some industries (e.g., restaurants) to provide worst-case estimates of wait times, so that when customers are provided service sooner than estimated, they are pleasantly surprised. So it's not unreasonable to give the passenger one estimated arrival time, while giving the driver a route that will get there slightly earlier, barring unexpected traffic delays.
What will get them in trouble is if they have been calculating charges and payments separately, as the lawsuit alleges. Without highly-improbable macroscale quantum effects, both routes cannot be taken at the same time, so either passengers are being charged for more time and distance than they actually spent in the car, or drivers are being paid for less time than they actually spent driving. Whichever one it is, that's a pretty strong case for fraud.