U.S. judge orders Uber customer to arbitrate price-fixing claims



NEW YORK (Reuters) – A U.S. judge ruled that Uber can force an unhappy Connecticut customer’s price-fixing case against the ride-service company into arbitration, after the customer said the proposed class action belonged in court because he never agreed to arbitrate.

FILE PHOTO: A man arrives at the Uber offices in Queens, New York, U.S., February 2, 2017. REUTERS/Brendan McDermid/File Photo

In an order dated Wednesday, U.S. District Judge Jed Rakoff in Manhattan also dismissed claims by the customer, Spencer Meyer, against former Uber Technologies Inc [UBER.UL] Chief Executive Travis Kalanick, unless Meyer wished to arbitrate.

Rakoff, long a critic of mandatory arbitration, said he would explain his reasoning later. Reuters obtained a copy of his order, which was not available in online court records.

“We are awaiting the court’s opinion and will consider all options as to how to proceed,” John Briody, a lawyer for Meyer, said in an email on Thursday.

Uber said in an email: “We are pleased with the court’s decision.” Lawyers for Kalanick did not immediately respond on Thursday to requests for comment.

Arbitration clauses are often buried in lengthy terms of service that customers never see or would struggle to read.

Critics say the clauses, which often forbid class actions, dissuade many people from pursuing claims at all.

Meyer had accused San Francisco-based Uber and Kalanick of conspiring with drivers, whose earnings are shared with Uber, to charge “surge pricing” fares during peak demand periods.

He said he never agreed to arbitrate because a keypad had obscured a hyperlink to Uber’s terms of service, including the arbitration clause, when he signed up with his smartphone.

Uber countered that Meyer had an unobstructed view of the hyperlink, and waived the keypad issue because he could have raised it sooner. The lawsuit began in December 2015.

Kalanick said claims against him must be dismissed because he was no longer Uber’s chief executive. He resigned in June after a shareholder revolt.

On Aug. 17, the federal appeals court in Manhattan had reinstated the arbitration provision, overturning a July 2016 ruling by Rakoff that found it unenforceable.

Later that month, the appeals court said Rakoff may consider new evidence about how long Uber customers could see the hyperlink, including when entering credit card information.

Internet companies and the U.S. Chamber of Commerce have argued during the litigation that a loss by Uber could inhibit e-commerce and threaten the enforceability of online contracts.

The case is Meyer v. Kalanick et al, U.S. District Court, Southern District of New York, No. 15-09796.

Reporting by Jonathan Stempel in New York; Editing by Jonathan Oatis and Dan Grebler

Our Standards:The Thomson Reuters Trust Principles.


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