Turo Refuses to Engage in Arbitration to Resolve Customer Disputes, Class Action Lawsuit Alleges

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An Illinois consumer claims in a proposed class action lawsuit that she was unable to resolve her dispute with Turo, Inc. due to the car rental company’s systemic failure to engage in arbitration.

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The 18-page case says that Turo—which operates a peer-to-peer car sharing marketplace—explicitly states in its terms of service that users are required to resolve all disputes, claims or controversies against the company through arbitration, a form of dispute resolution that takes place outside of court before a third-party arbitrator.

However, according to the filing, individuals who attempt to resolve disputes through the company’s own chosen arbitration process are met with “summary denials, indifference, and delay.” The complaint further alleges that Turo refuses to pay its share of the arbitration filing fee, as required under its own arbitration clause and the American Arbitration Association’s (AAA) Consumer Arbitration Rules.

The plaintiff, who uses Turo to rent out her personal vehicle, claims that her car was involved in a collision in October 2022 while being operated by a Turo user. The accident caused damage to the vehicle’s front bumper and splash shield, and a part underneath the bumper was also visibly dislocated, the Turo arbitration lawsuit says.

After the plaintiff filed a claim with Turo, she received an estimate for repairs that failed to include all the damage she reported, the case explains. The woman says she got in contact with the third-party software provider Turo uses to process claims, which advised her that Turo failed to provide all of the photos and documentation of the damage she submitted and requested that she leave the vehicle in the mechanic’s shop to obtain supplemental repair estimates.

Per the complaint, the plaintiff couldn’t afford to leave the vehicle in the mechanic’s shop indefinitely, so she opted to pay for the repairs herself and request reimbursement from Turo. She subsequently sent the defendant a notice of dispute in January 2023, to which she received no response, the filing alleges.

Similarly, Turo failed to respond or pay its initial filing fee after the plaintiff filed an arbitration demand in November 2023, prompting the AAA to administratively close the case in March 2024, the suit claims.

As the case tells it, Turo’s refusal to comply with its obligations to participate in arbitration has caused consumers to suffer losses, including “loss of availability of funds, time, effort, and expenses taken to initiate the arbitrations that were unable to proceed due to [the defendant’s] breach of contract, plus the additional fees necessary to initiate a lawsuit against [the defendant] in court to obtain the requested relief.”

The lawsuit looks to represent anyone in the United States whose arbitration with Turo, Inc. did not proceed as a result of the company’s failure to pay the required arbitration filing fee.

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