Rider Resists Arbitration in NY Uber Fare Overcharge Suit

An opposition filed late last week in the ride overcharge suit against Uber Technologies Inc. argues that the company has no right to force the plaintiff’s claims to arbitration. The filing asserts that based on Uber’s publicly aired grievances against the American Arbitration Association (AAA), its rider contract’s delegation clause and its entire mandatory arbitration provisions are unconscionable.

The suit was filed in December 2021 and alleged that the company deceived New York riders into paying more for some rides than advertised in a bait-and-switch scheme. The complaint stated claims under New York’s General Business Law and for unjust enrichment.

Instead of filing a motion to dismiss, Uber moved to compel arbitration. It defended on grounds that the suit fell squarely within its arbitration provision as did any question relating to the case’s arbitrability. The ride-hailing company also accused the plaintiff of forum shopping based on nearly-identical cases filed in California by the same counsel.

The New York rider’s opposition focused mainly on the arbitration provision’s alleged unconscionability. But before delving into substantive arguments, the plaintiff pointed out that Uber failed to disclose the “crucial fact” that it sued the AAA, “the sole arbitral body that it designated in its Terms of Use, and refused to pay the AAA tens of millions of dollars in arbitration fees.”

As previously reported, Uber is fighting the AAA over fees it must pay in connection with approximately 20,000 racial discrimination-related arbitration claims that were originally filed as lawsuits, then at Uber’s behest, moved to the para-judicial forum.

The plaintiff further alleged that in the AAA New York state court case, the company accuses the arbitral body of acting unfairly and with bias. Specifically, the opposition pointed to an argument that the AAA is allegedly exacting revenge on Uber for “supporting the Black community in the wake of George Floyd’s murder.”

The plaintiff argued that the allegations against the AAA may compromise its neutrality. This, the opposition said, impacts substantive unconscionability, one of two conjunctive prongs required to prove an arbitration provision unenforceable. “Quite simply, the ‘minimum levels of integrity’ that the process requires have been lost because Plaintiff has no idea how Uber’s lawsuit against the AAA will impact her own proceeding,” the filing said.

The opposition also asserted that because Uber put forward no admissible evidence of the rider’s agreement to its terms of use, the defendant cannot carry its burden of proving the plaintiff bound by the delegation clause or the arbitration agreement contained therein.

The plaintiff is represented by Reese LLP and Uber by Morrison & Foerster LLP.