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Uber Arbitration in Question

Tuesday, July, 12, 2016

An Uber customer has accused the company of violating antitrust laws and recently, a federal judge allowed Uber Technologies to be added as a defendant in an antitrust lawsuit against its CEO. The lawsuit is in regard to its pricing practices. The case will likely head to arbitration now. 


The decision was made recently by US District Judge Jed Rakoff in Manhattan. He called Uber a necessary party to the lawsuit filed by Connecticut passenger Spencer Meyer, and stated it had an interest in maintaining its surge pricing algorithm and its contract with drivers. 


According to Judge Rakoff, “… the plaintiff now pretends that he seeks no relief whatsoever against Uber, such an assertion is at odds with any fair reading of the… claim.” The judge also suggested Meyer might have chosen to sue only the CEO to avoid a clause in Uber’s user agreement that requires disputes with Uber be arbitrated. Essentially, he brought suit against an individual in order to avoid the company policy of arbitration. This echoed Uber’s argument that accused Meyer of “pursuing a strategic effort” to avoid arbitration. He wanted information from the company, but was only going after one individual. 


The judge believed that failing to add Uber as a defendant would bar the company from contesting antitrust liability in future lawsuits in order to pursue his case against Uber. Arbitration makes it more difficult to pursue group claims because it can be so expensive. However, this judge is unwilling to allow an individual plaintiff to manipulate the laws.