SDNY Court Denies Reconsideration of Arbitration Ruling in Uber Drivers’ Payment Dispute

Last week, Judge Andrew L. Carter declined the plaintiffs’ bid to override his prior decision granting Uber Technologies Inc., Uber Logistik LLC and Uber USA LLC’s (collectively, Uber) motion to compel arbitration and denying the Uber “Black Car” drivers’ motion for discovery. In March 2021, the court sent the payment-related breach of contract claims to arbitration, finding that they fell within the scope of the Uber agreement the drivers signed.

The New York federal court case began in 2019 when Black Car drivers who contracted with Uber as part of its New York City fleet argued that Uber underpaid them by deducting sales tax and a surcharge from their earnings, as opposed to solely deducting Uber’s fee per ride. They also argued that the company engaged in an “Upfront Pricing” scheme, whereby it calculated driver earnings on an amount less than the actual customer fare.

Uber moved to compel arbitration, and, after a lengthy briefing process, the court agreed. In its opinion, the court considered whether the plaintiffs belong to a category of workers “engaged in interstate commerce” such that they are exempt from the Federal Arbitration Act (FAA).

The court also evaluated the plaintiffs’ request for information from Uber on interstate trips and trips to airports and transportation hubs such as between Manhattan and Newark, New Jersey. The court denied the discovery motion, finding the face of the complaint sufficient to decide the issue. 

The opinion said the drivers did not belong to the interstate commerce worker class because, among other things, their occasional interstate movement did not qualify as a central part of their job description. Judge Carter also upheld the parties’ agreement to arbitrate and ruled that the plaintiffs’ claims fall within the scope of that agreement.

In last week’s reconsideration order, the court declined the plaintiffs’ arguments that the court committed “egregious error” by applying the wrong standard to Uber’s motion and that it should have allowed the requested discovery.

The court found the arguments without merit. Judge Carter stood by his analysis and refusal to permit discovery, reiterating that “when deciding whether a category of workers is exempted from the FAA … the motion to dismiss standard applies if the complaint and incorporated documents provide a sufficient basis to decide the issue.” Finally, the court noted that the standard for reconsideration is strict, and unhappy litigants cannot use it as a vehicle to try and effectuate the relief they seek.

The plaintiffs are represented by the New York Taxi Workers Alliance and Mirer, Mazzocchi, & Julien PLLC. Uber is represented by Jenner & Block.