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.