Uber CEO Asks for Arbitration in Rider’s Class Action Lawsuit

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On Tuesday, Uber’s CEO told a New York federal court judge that a rider’s proposed class action lawsuit alleging price-fixing should be forced into arbitration.

CEO Travis Kalanick argued that the riders who used Uber agreed to a “clear and conspicuous “arbitration provision prior to using the company’s services.

Lead plaintiff Spencer Meyer filed the antitrust claims only against Kalanick as the sole defendant, who is a non-signatory to Uber’s arbitration agreement.

Kalanick argued that since every Uber rider agrees to terms and conditions mandating arbitration of disputes, an arbitrator is the only authority who should have the final say whether he can also make use of the arbitration spelled out within the user agreement.

Kalanick argued that even if the court decides to rule on the proposed class action lawsuit, the case should still be forced into arbitration due to the claims asserted regarding the pricing of Uber rides and how Uber operates under its business model as a whole.

“In a transparent attempt to avoid the arbitration agreement, plaintiff filed this lawsuit challenging Uber’s business model as a purported price-fixing scheme, but named Uber’s CEO Mr. Kalanick, a non-signatory to the arbitration agreement, as the sole defendant, while omitting Uber, a signatory, from the proceedings,” Kalanick’s recent memorandum stated. “This procedural sleight of hand does not relieve plaintiff of his contractual obligation to arbitrate.”

The memorandum goes on to say that the proposed class action lawsuit falls within the scope of the existing arbitration agreement and that Kalanick has not waived his rights to arbitration and has the right to enforce the arbitration agreement.

Kalanick tells the court that the law is “well-settled” concerning employees who are non-signatories, saying that these employees are covered by the arbitration agreement of the employer when the employee acts as a direct agent of the employer.

Meyer originally filed the proposed class action lawsuit in December with allegations that Uber drivers conspired to fix prices for rides, with Kalanick working with drivers individually in the alleged price-fixing scheme, according to court records.

In March, U.S. District Judge Jed S. Rakoff denied Uber’s motion to dismiss the proposed class action lawsuit after finding that Meyer had sufficiently alleged that Uber drivers were all in agreement to work in collaboration where they would be assured to not be undercut by other drivers competing for rides.

Judge Rakoff also said that since Kalanick is also an Uber driver, he is also part of the alleged price-fixing scheme.

Following his previous unsuccessful attempts to dismiss, Kalanick asked to intervene and compel arbitration.

The recent memorandum in support of Kalanick’s request to intervene concluded by arguing that due to the stated reasons, the court should dismiss the proposed class action lawsuit and compel arbitration of Meyer’s claims.

Also on Tuesday, the same day of the memorandum filing, Judge Rakoff ordered Uber to submit evidence following allegations it had improperly hired a private investigator who allegedly presented as a legal writer to gather information about an attorney of Meyer’s.

Meyer is represented by Brian M. Feldman, Edwin M. Larkin and Jeffrey A. Wadsworth of Harter Secrest & Emery LLP and Andrew A. Schmidt of Andrew Schmidt Law PLLC.

The Uber Price-Fixing Class Action Lawsuit is Spencer Meyer v. Travis Kalanick, Case No. 1:15-cv-09796, in the U.S. District Court for the Southern District of New York.

UPDATE: On July 14, 2016, a private investigation firm disclosed to a New York federal judge that one of it’s unlicensed detectives lied and may have illegally recorded telephone conversations in order to uncover information about the case’s lead plaintiff.

UPDATE 2: On July 29, 2016, Uber formally denied the allegations of price-fixing made in a recent class action lawsuit and is now counterclaiming for a declaratory judgment.

UPDATE 3: On Nov. 29, 2016, an Uber rider is urging the Second Circuit Appeals Court to affirm a New York federal judge’s ruling that the ride-sharing company cannot force customers to arbitrate a putative antitrust class action lawsuit.