Karon Law Blog

Uber: What Exactly Are You Agreeing To?

[Editor’s Note:  One sided arbitration clauses forced on consumers without equal bargaining power threaten everyone’s right to hold corporate wrongdoers accountable.  Just this week the Supreme Court in a 5-4 decision on strictly partisan lines upheld the use of forced arbitration agreements in employment cases which prohibited workers from joining together in a class action.  In today’s blog post, Law Clerk Abbie Rosen updates us on Uber’s use of forced arbitration clauses with persons using its service.  Which raises the question.  If arbitration is so good for consumers, why do companies keep having to force it on us?  Jon Karon]

By Abbie Rosen

Hit “I agree” and you’re on your way. You’ve done it for just about every app, website, or service that you’ve signed up for or downloaded, and it’s become the norm whatever the service is. Obviously, some are more harmless than others, most people don’t really expect to be physically injured by their Netflix account. Uber, the ride sharing service, has come under fire recently for the Forced Arbitration Agreement in their Service Agreement. Knowing that the service provides a link between average people with cars willing to shuttle people around and the people who need that shuttling, you might foresee a few issues – namely that the policy would apply in car accident cases where people paying a fare are injured because of the Uber driver’s negligence.

Something you might not have considered, however, is that up until about May 15, 2018 Uber had been enforcing their arbitration agreement against victims of sexual assaults and sexual harassment. The implication being that while the drivers themselves would be arrested and charged as per the law, the company could limit their liability in the situations and therefore have no serious monetary incentive to screen their drivers. Concerning, because (according to recode.net) over 100 Uber drivers have been the subject of sexual assault or harassment claims within the last 4 years. Perhaps this is why Uber reacted so agreeably and changed their policy when it was publicly challenged by victims and senators alike.

Aside from these sexual assault/harassment cases, Uber has been enforcing their arbitration agreement in car accident cases against those opting to use their service and the courts have largely stood behind them. In a proposed class action lawsuit challenging both the company’s surcharge policy and their arbitration agreement, the 2^nd Circuit Court of Appeals for Manhattan upheld the arbitration agreement. The Court observed that the Arbitration Agreement is prominent in Uber’s User Agreement. The obvious argument, of course, is that “no one reads all that legalese, it can’t possibly be enforceable” to which (according to Insurancejournal.com) the Court wrote, “While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes.” This tough break mentality can cause extra financial harm for accident victims, particularly when the accident was the fault of the Uber driver.

Mr. Karon has previously written about forced arbitration agreements on this blog and you can read that here. What forced arbitration boils down to is that you lose your right to bring your case in court, where a judge rules on the law and a jury decides the facts.  Instead, a private person (who doesn’t even have to be a lawyer), selected by the company, serves as judge and jury, in a secret proceeding, where the company also sets the rules. Sounds fair and impartial, right?  In essence, forced arbitration is a situation where it’s their bat, their ball, their rules and you probably don’t even know you “agreed” to it months or even years ago.

By the way, Lyft has a similar arbitration agreement in their terms of service which might be something to consider when looking for a ride. It seems, if you’re concerned about retaining your full rights to hold your driver accountable in the case of an accident, hailing a good old-fashioned taxi cab might be the safest option.