Uber Pushes For Mandatory Arbitration

 The online transportation network known as Uber is an alternative to hiring a taxi when traveling around cities. However, most Uber customers likely have no idea that by using the app, they are giving up their right to hold the company responsible for negligence with a lawsuit. Uber has recently appealed a decision about its right to force arbitration on its customers.

With the growth of internet-based companies, the legal rights of customers may be falling into uncharted territory. Most consumers are familiar with the customary “agree” requirement that they are required to click before proceeding with an app download or Internet purchase. But what many consumers may not know is exactly what is contained in the fine print of these one-click “agreements.” Some companies—like Uber—do not even have an explicit click requirement, but rather, advertise to users that by registering with the app, users agree to the terms of service.[1] The terms of service are then available via a separate hyperlink.[2] Uber’s terms of service contain an arbitration agreement, which requires customers to arbitrate any dispute they may have with the company, even if the company is negligent and causes harm to the customer. Thus, by using the Uber app, customers are agreeing to the arbitration agreement and giving up their right to a trial.

The issue reached the U.S. District Court in the Southern District of New York, where the judge refused to send a suit by Uber customers to arbitration, thus refusing to enforce the arbitration requirement. But Uber is appealing this decision to the 2nd Circuit.[3] If the appeal is successful, Uber customers may be bound to arbitrate any claims of negligence against the company. This could mean that passengers who are injured on an Uber ride will not be able to sue for their injuries. Instead, the dispute will be sent to arbitration, per the company’s terms and conditions.

While arbitration can be a useful way of resolving legal disputes, there are advantages and disadvantages to the process, of which consumers should be aware. And more importantly, consumers should be wary of what they agree to by way of app usage and online purchases. The right to trial is guaranteed by the U.S. constitution and by many state laws and constitutions.[4] Any waiver of this right must be knowing and voluntary—which may not be the case in many online agreements. As Uber pushes forward for the enforcement of arbitration clauses, the individual rights of passengers may be in jeopardy.

About The Author: Jamie Kessel is a personal injury attorney practicing with the law firm of Allen & Allen. His practice is focused in the areas of car accidents, tractor trailer accidents, premises liability, and distracted driving accidents.

[1] http://www.reuters.com/article/us-otc-uber-idUSKBN13P2V7.

[2] Id.

[3] Id.

[4] Id.