Uber Loses Arbitration Bid, Must Fight Drivers in Court

A San Francisco judge ruled Monday that Uber’s contract with its drivers forcing them into arbitration is unenforceable, Bloomberg Business reported.

San Francisco Superior Court Judge Ernest Goldsmith said that contract is “flatly inconsistent” because one provision said dispute should be resolved by arbitrator and another said it must be resolved by a judge.

“I’m not going to fly in the face of a stark inconsistency in order to massage this into arbitrability,” he said.

The decision could have a major affect on Uber’s business model.

The San Francisco-based ride-sharing app company plans to appeal the ruling.

Uber is being a sued by a driver, claiming she is entitled to be treated as an employee to recover lost wages and expenses reimbursement.

The California Labor Commission agree with the driver back in June and Uber is appealing that decision. The company argued its drivers are independent contractors and signed a contract agreeing to arbitration.

For more on this story, visit Bloomberg Business.

--Photo courtesy of Uber.