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Uber must face Lyft driver lawsuit arising from alleged fake rides

A Lyft driver who filed suit against Uber over alleged fake rides will get to present his case in public court. Uber wanted the case decided by arbitration behind closed doors, but last week a San Francisco state judge denied that move, according to Bloomberg.

Ryan Smythe says he and many other Lyft drivers wasted time responding to non-existent ride calls, and he claims the calls were made by Uber drivers encouraged by their company in a driver recruiting program called Operation SLOG. Smythe alleges Uber drivers used disposable phones so the calls could not be traced back to them.

“Uber Technologies Inc. did this to discourage Lyft drivers from contracting with Lyft, to deprive the marketplace of Lyft drivers so that Uber drivers would benefit, and to create a higher wait time for Lyft customers in order to steer their patronage to Uber,” Smythe said.

Uber has an arbitration clause in its driver contract that inhibits its own drivers from filing lawsuits. Uber argued that, because Smythe, like many San Francisco area drivers, drove for both Uber and Lyft, he couldn’t take Uber to court and would be bound by the arbitration clause.

San Francisco Superior Court Judge Mary E. Wiss disagreed with Uber’s position. In her ruling, Wiss wrote that Smythe’s suit “is directly tied to his separate role as Lyft driver and the harm he allegedly suffered in that capacity.” Following that logic, therefore, the lawsuit claims “fall outside the scope of the arbitration agreement.”

So Smythe will get his day in court.

Competition for drivers between Lyft and Uber is intense. The two largest U.S. ridesharing companies are fighting for market share. At the same time, both Uber and Lyft are engaged in developing self-driving vehicles for use in urban areas.