Uber’s Investigation of Fare Challenger Triggers Judge’s Ire

  • Ride-hailing company’s private-eye accused of lying in probe
  • Judge orders Uber to turn over documents in antitrust case

A federal judge wants to know whether Uber Technologies Inc. encouraged a private investigator to lie as part of a probe of a customer who sued over how the ride-hailing app sets fares.

Connecticut customer Spencer Meyer sued Uber co-founder Travis Kalanick last year alleging the company’s practice of raising prices during certain situations violates antitrust laws. U.S. District Judge Jed Rakoff in Manhattan on Tuesday ordered Uber to turn over documents from the investigation of Meyer and his attorney, ruling there’s reasonable basis “to suspect that a fraud occurred and that Uber’s communications may have been in furtherance of it.”

The matter, Rakoff said, raises “a serious risk of perverting the process of justice before this court.”

Meyer alleged in his suit that the technology in Uber’s popular app is used by drivers to illegally coordinate high surge-pricing fares. The lawsuit doesn’t name Uber as a defendant, in an attempt to avoid an arbitration requirement in company’s user agreement.

Rakoff said in his ruling that Uber hired an outside firm, Global Precision Research LLC, also known as “Ergo,” to investigate Meyer and his attorney, Andrew Schmidt. Meyer claimed that an Ergo investigator lied during the probe, including telling colleagues of Schmidt that he was preparing a profile of “up-and-coming labor lawyers in the U.S.,” Rakoff said.

Uber acknowledges that its personnel gave instructions to Ergo and “were involved in engaging and instructing” the company, Rakoff said. Matt Kallman, a spokesman for San Francisco-based Uber, declined to comment on the judge’s order.

The judge previously denied Kalanick’s bid to dismiss the case, rejecting the CEO’s argument that a conspiracy involving hundreds of thousands of drivers was “wildly implausible” and “physically impossible.”

The case is Meyer v. Kalanick, 1:15-cv-09796, U.S. District Court, Southern District of New York (Manhattan).

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