What is the Uber Arbitration Agreement?
What is Uber’s arbitration agreement?
To get an idea of what an Uber arbitration agreement is, it helps to know what any arbitration agreement is first. An arbitration agreement is simply a contract, a "meet and agree" on something between two parties, in this case Uber and you (whether you are a rider or a driver). Arbitration agreements typically contract away your right to jury trials, and make arbitration the only way to resolve any dispute with that private company.
The purpose of an arbitration agreement is to remove cases from the courts, and encourage or require the individuals to submit their issue to a private arbitrator instead of filing a lawsuit against the company in a public court. In this case , the arbitration agreement in your Uber app tells you that you can only resolve any problems you have with Uber through private arbitration and that you agree to it by using the app or by continuing to use the app rather than by filing a lawsuit against the company. The result is that there will be times when you decide you want to call Uber out on something it did wrong and file a lawsuit against it, but you can’t. You will have to hire an attorney who can draw up the proper documents for you to submit the issue to private arbitration instead of the courts.
Legal Consequences of Agreeing to the Uber Arbitration Agreement
Legal Implications of the Arbitration Agreement
It is important to understand that if you sign the arbitration agreement you are effectively giving up the ability to sue Uber in a court or, for example, join a class-action case. A class action is a single lawsuit that combines the claims of various people against a business or other entity. The person (or persons) who filed the case before a court acts as the representative of the entire group.
You also give up your right to demand a jury; instead, arbitration cases are decided by a neutral and unbiased party called an arbitrator or panel of arbitrators. Another consequence of the agreement is that the process is secretive or, in legal terms, confidential. The arbitrator is required to keep the process and all information exchanged during it confidential. There are only two exceptions that allow for disclosure. The first is when a law requires disclosure, and the second is when disclosure is necessary to facilitate enforcement.
The above-mentioned features of the arbitration process are meant to protect your privacy. However, they also make it very difficult to bring up facts discovered in one arbitration with future arbitrators or courts in the event of similar disputes in the future. This is because the process is confidential and neither you nor the arbitrator can disclose details about the previous agreements. If you want to be able to use an award or particular facts in the future, you must request that the award be published or at least amending the rule prohibiting disclosure.
By signing Uber’s agreement you basically "waive your rights." While it may seem unfair, this simply means that while you will no longer be able to sue Uber for damages, you will also no longer be liable in a lawsuit. Likewise, you will not be able to join a class-action lawsuit, which is a common way of bringing a large number of cases with similar issues together for a single court hearing in front of a judge.
Advantages and Disadvantages of Arbitration Agreements for Uber Riders and Drivers
Although many must enter into a contract with Uber through the "terms and conditions" on its app, it’s certainly possible that people who use Uber for very important events will want to learn more about its arbitration agreement with the company. Here are some pros and cons of arbitration from the perspective of Uber users.
Pros for Uber Users
The arbitration process is generally quicker than the litigation process. While the average lawsuit takes about a year to a year and a half, arbitration can typically be finalized in about six months.
Another advantage is that arbitration generally costs less than litigation, which helps those who are harmed by Uber’s negligence. Because an arbitration hearing usually has only one arbitrator, rather than a judge and jury, who would all need to travel to another city, the overall expenses are lower for everyone involved.
For individuals who have been injured in an accident while using Uber, whether as a passenger or other party, knowing that they don’t have to spend years waiting for justice can be a real relief.
Cons for Uber Users
From the point of view of an Uber user, there are also some drawbacks to arbitration. The first is that the rules of discovery are much stricter in an arbitration proceeding than in a litigation. In suit, both sides can demand information from the other side. This often allows for evidence to be gathered that can clarify the dangers of a situation or bring to light a problem such as careless company policies that cause safety hazards.
Another problem is that a win at arbitration can be much harder to achieve than a lawsuit victory, partly because arbitrators tend to be reluctant to dramatically alter how a company like Uber operates.
Opting-Out of the Uber Arbitration Agreement
Opting Out of the Arbitration Agreement
If you use the Uber app and would like to continue to retain your right to take action in a court of law, you may "opt-out" of the arbitration provision that is part of your Uber Agreement. To preserve those rights, you will need to complete a "Request for Exclusion" within 30 days of the new Uber Terms coming into effect on January 19, 2017. The new Uber Terms will apply to your use of the Uber app as of February 1, 2017.
A Request for Exclusion is a written notice of your intent to be excluded from the arbitration agreement and must (i) describe the decision to be excluded by reference to the user agreement and (ii) include your name, address, phone number, account number, and a statement that you wish to opt out of the arbitration agreement. The Request for Exclusion is limited to just you. You do not have the right to opt out any of your affiliates or relatives.
To ensure that your Request for Exclusion is valid and effective, Uber advises you to provide them with all of the information requested. Any incomplete information may prevent it from being effective. Uber has given users until February 17, 2017 by which to send in the Request for Exclusion. By sending Uber a valid Request for Exclusion on or before February 17, 2017, you may opt out of the arbitration provision and retain your right to pursue a claim in court against Uber.
Uber has three different ways to submit your Request for Exclusion.
If YOU are a rider or rider account holder, Using your mobile app:
1. Select "Help"
2. Scroll down and click "Legal"
3 . Click "Arbitration Agreement"
4. Select "Request for Exclusion"
5. Follow the prompts to send a request asking to opt out
If YOU are a driver, Using your mobile app:
- Tap Account and go to Help
- Tap Help
- Tap Legal
- Tap Arbitration Agreement
- Tap Request for Exclusion
- Follow the prompts to send a request asking to opt out
If you are a rider or rider account holder, Using the web app:
- Log into your account and select "Help"
- Scroll down and click "Legal"
- Click "Arbitration Agreement"
- Click "Request for Exclusion" link
- Follow the prompts to send a request asking to opt out
If you are a driver, Using the web app:
- Log in to your Uber Partner account and select "Help"
- Tap Help
- Tap Legal
- Tap Arbitration Agreement
- Click to send a request asking to opt out
If you would like to send your opt-out notice by mail, the Request for Exclusion must be sent by certified mail, return receipt requested, to the following address:
Uber Technologies, Inc.
Attn: Legal Department
1455 Market St. #400
San Francisco, CA 94103
From and after February 1, 2017, if you are a rider or rider account holder, you should submit your request by or postmarked no later than February 17, 2017. From and after February 1, 2017, if you are a driver, you should submit your request by or postmarked no later than March 14, 2017.
Any Request for Exclusion received after the deadlines set forth above will not be valid or effective.
Recent Lawsuits Challenging the Uber Arbitration Agreement
Some of our readers may remember that there was a recent $20 million dollar class action settlement against Uber Technologies, Inc. that resolved claims that the company did not reimburse drivers for expenses including cell phone charges and online background checks. Part of the settlement agreement called for the company to change its arbitration agreement going forward to allow drivers to sue in court if they chose to do so, apparently as an incentive for any current Uber drivers to opt out. Presumably Uber agreed to the proposed settlement and new arbitration agreement in order to avoid any negative legal precedent regarding the enforceability of its mandatory arbitration agreement, which had been challenged by attorneys in the case. In June, just weeks after the Uber class action settlement, the Supreme Court granted certiorari in the much-anticipated Epic Systems Corp. v. Lewis case, which is challenging the enforcement of arbitration agreements versus class-action rights in the employment context.
At the same time as the Epic Systems case, however, the Ninth Circuit on May 26, 2017, issued a sweeping reversal of a district court denial of class certification of Uber’s drivers. In the decision, the appeals court held that the drivers’ misclassification claim under California’s wage and hour laws could proceed as a class action and that issues of arbitration agreements and class waiver provisions would have to be determined later on whether to consider them as enforceable. Uber obtained a stay of the ruling from the U.S. Supreme Court on August 22, 2017 for purposes of filing a petition for certiorari, while the underlying merits of the case continue in district court.
This string of cases makes it appear that the debate regarding the ability of claimants to arbitrate claims as a class is a hotly contested issue with real potential repercussions on the enforcement of mandatory arbitration.
Looking Ahead – Thoughts on Future Allowability of Arbitration Agreements in Ridesharing
As consumers continue to embrace ridesharing services, legislators will likely challenge whether arbitration agreements are enforceable. Lawmakers may attempt to pass legislation that curtails or eliminates the enforcement of arbitration agreements, or extends tort liability to ridesharing companies that do not currently exist. Encountering such changes in the law, Uber will need to stay abreast of and adopt changes in both federal and state law and continue to ensure strong policy arguments for enforcing its arbitration agreement . Eventually, however, success for Uber in enforcing its arbitration agreements may be hampered by the sweeping changes to the Federal Arbitration Act (FAA) and other pro-arbitration developments that have occurred during the last twenty years. The recent classwide opt-out feature adopted by the National Labor Relations Board (NLRB) and the recent decision from the Ohio Supreme Court rejecting arbitration for a non-employee limousine driver may foreshadow greater challenges for arbitration in the employment-based context, including ridesharing platforms.
