New York Uber Drivers Protest Rate Cuts
A federal Judge has barred Uber from using in court info it obtained in a background check of a plaintiff bringing a price-fixing lawsuit. Photograph by Spencer Platt — Getty Images

Judge Denies Uber Motion to Compel Arbitration in Surge-Pricing Lawsuit

Jul 29, 2016

A federal judge on Friday denied a motion by Uber (uber) to compel arbitration in a passenger lawsuit over so-called surge pricing brought against the ride-hailing company's chief executive.

Spencer Meyer, a Connecticut passenger and the lead plaintiff who filed the lawsuit, was subject to a user agreement requiring that disputes with San Francisco-based Uber be arbitrated. Although Meyer sued only CEO Travis Kalanick, the company requested arbitration after Uber was added as a defendant to the lawsuit last month.

U.S. District Judge Jed Rakoff in Manhattan said in his decision that consumers are often "allegedly consenting to an entire lengthy set of terms and conditions ... by the mere act of accessing a service" but never explicitly asked.

He denied Uber's request for arbitration. "The Court finds that the plaintiff here never agreed to waive his right to a jury trial or to submit to mandatory arbitration," Rakoff wrote.

The lawsuit, which was filed in December and sought class-action status on behalf of passengers nationwide, alleges Kalanick engaged in a price-fixing scheme with Uber drivers to raise prices during periods of heavy demand. Uber takes a share of drivers' earnings.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions