Our biking directions are based on a physical model of the amount of power your body has to exert given the slope of the road you're biking on. Assuming typical values for mass and for wind resistance, we compute the effort you'll require and the speed you'll achieve while going uphill. We take this speed into account when determining the time estimate for your journey, and we also try hard to avoid routes that will require an unreasonable degree of exertion. Sometimes the model will determine that it's far more efficient to make you ride several extra blocks than to have to deal with a massive hill.
So far I find many of its suggestions sub-optimal, but not too far off from reality-as-I-recall-it. I like that it sometimes offers alternate routes, too -- I hadn't noticed that maps started doing that.