Uber driver says he was told to create fake accounts to mess with Lyft drivers; Lawsuit will not go to arbitration

By Sandra Lane | Jun 19, 2018

SAN FRANCISCO (Legal Newsline) – A California appellate court has affirmed a ruling of a lower court that in the case of Ryan Smythe v. Uber Technologies Inc., “the court correctly found that the action is beyond the scope of Smythe’s arbitration agreement with Uber.”

SAN FRANCISCO (Legal Newsline) – A California appellate court has affirmed a ruling of a lower court that in the case of Ryan Smythe v. Uber Technologies Inc., “correctly found that the action is beyond the scope of Smythe’s arbitration agreement with Uber.”

The 1st Appellate District, Division Three of the California Court of Appeal made the ruling June 8.

The opinion states that during the relevant period, Smythe worked as a driver for both Uber and Lyft Inc., Uber’s direct competitor. The San Francisco Superior Court's ruling was appealed by Uber, and the company insisted that the issue should be resolved by mediation.

Smythe’s complaint outlines how Uber allegedly directed its drivers and others to create and use fake Lyft accounts to request rides. This practice would result in Lyft drivers going to pick up nonexistent passengers. According to Smythe’s complaint, Uber did this to discourage drivers from driving for Lyft and to cause Lyft customers to prefer using Uber.

As stated in the ruling, “The complaint asserted causes of action for unfair business practices and intentional interference with prospective economic damage on behalf of a putative class of Lyft drivers affected by the alleged scheme.”

Uber demanded that arbitration be used to resolve this dispute. The company insisted that when Smythe became a driver for Uber, he signed two agreements containing arbitration provisions. However, the trial court found that Smythe’s allegations were “beyond the scope of the arbitration agreement and that the delegation provision was unenforceable in the context of the claims advanced in Smythe’s complaint.”

In response, Uber filed an appeal to the higher court, saying that the court erred by “adjudicating the threshold question of whether the arbitration provision covers Smythe’s complaint.” 

Appellate Judge Peter J. Siggins, said “Uber urges us to reverse the trial court’s decision and remand with an instruction to compel arbitration because, it asserts, Smythe’s claims fall within the scope of the arbitration provision. We disagree.”

Siggins ruled that “a party cannot be required to submit to arbitrate any dispute for which he had not agreed so to submit. We readily conclude the arbitration agreement cannot apply to this action.”

The judge pointed out that Smythe’s action against Uber has nothing to do with any agreements he signed with Uber.  

“To the contrary, Smythe brought his action in his capacity as a driver for Lyft, not Uber, and alleges only that he and other Lyft drivers incurred expenses and lost income when they responded to fraudulent ride requests generated at Uber’s instigation,” the decision states.

Siggins said that the trial court correctly found the arbitration provision in Smythe’s agreement with Uber inapplicable in these circumstances. Accordingly, the trial court properly declined to compel arbitration. 

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