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Uber's Arbitration Policy Comes Back to Bite It in the Ass

Discussion in 'News' started by KevinH, Dec 5, 2018.

  1. KevinH


    San Francisco
    Over 12,000 Uber drivers found a way to weaponize the ridesharing platform’s restrictive contract in what’s possibly the funniest labor strategy of the year.

    But first: a bit of background. One of the more onerous aspects of the gig economy is its propensity to include arbitration agreements in the terms of service—you know, the very long document no one really reads—governing the rights of its workers. These agreements prohibit workers from suing gig platforms in open court, generally giving the company greater leverage and saving it from public embarrassment. Sometimes arbitration is binding; in Uber’s case, driver’s can opt out—but only within 30 days of signing, and very few seem to realize they have the option.

    Until an unfavorable U.S. Supreme Court ruling earlier this year, independent contractors often joined class-action lawsuits anyway, arguing (sometimes successfully) that they ought to have been classified as employees from the get-go. With that avenue of remuneration cut off, a group of 12,501 Uber drivers found a new option that hinges on the company’s own terms of service. While arbitrating parties are responsible for paying for their own attorneys, the terms state that “in all cases where required by law, the Company [Uber] will pay the Arbitrator’s and arbitration fees.”

    If today’s petition in California’s Northern District Court is accurate, those arbitration fees add up rather quickly.

    A group of 12,501 drivers opted to take Uber at its word, individually bringing their cases up for arbitration, overwhelming the infrastructure that’s meant to divide and conquer. “As of November 13, 2018, 12,501 demands have been filed with JAMS,” the notice states. (JAMS refers to the arbitration service Uber uses for this purpose.) Continuing on, emphasis ours: “Of those 12,501 demands, in only 296 has Uber paid the initiating filing fees necessary for an arbitration to commence [...] only 47 have appointed arbitrators, and [...] in only six instances has Uber paid the retainer fee of the arbitrator to allow the arbitration to move forward.” (Emphasis ours.)

    While a JAMS representative was not immediately available for comment, the cause of the holdup is Uber itself, according to the notice:

    Uber knows that its failure to pay the filing fees has prevented the arbitrations from commencing. Throughout this process, JAMS has repeatedly advised Uber that JAMS is “missing the NON-REFUNDABLE filing fee of $1,500 for each demand, made payable to JAMS.” JAMS has also informed Uber that “until the Filing Fee is received we will be unable to proceed with the administration of these matters."

    We have no reason to assume this fee would be different based on the nature of each case, so some back-of-the-envelope math indicates the filings alone would cost Uber—a company that already loses sickening amounts of money—over $18.7 million. We’ve reached out to Uber for comment and to learn if they have an estimate of what that number would be after attorney fees and other expenses.

    Last edited by a moderator: Dec 6, 2018
  2. touberornottouber


    Volusia County, FL
    Since they are not honoring the contract it might be argued that the mandatory arbitration provision should be thrown out entirely?
  3. KevinH


    San Francisco
    That would seem to me to be a reasonable argument. And this is just one law firm and the 12,000 is from Nov. 13th. I wonder how many more attorneys have filed. I wonder also if Shannon Lise-Riordan farmed out the arbitration work to this law firm so she could still handle the class action cases.
  4. uberdriverfornow


    melusine3 and tohunt4me like this.
  5. Breach of Contract Renders Uber Contract Null & Void !
  6. JAM it to them!
  7. Tnasty


    Just desserts being served on a cold plate?
  8. Funny how a settlement check of $78.52 came the same day as the new trade dress stickers. I feel as though there trying to pay me to put them on. :D Hell I long forgotten and gave up that I would even get one.
    melusine3 and tohunt4me like this.
  9. observer

    observer Moderator

    long beach
    She stated at one time that if the class action route was blocked she would file individual arbitrations.

    There was a page on her website for individual drivers that missed the opt out time frame to sign up for individual arbitration.

    Nonya busy and melusine3 like this.
  10. njn


    12,501 default judgements coming up.
    melusine3 and TwoFiddyMile like this.
  11. Michael - Cleveland

    Michael - Cleveland Moderator

    Great Lakes
    no, it doesn't render the contract null and void. There is a severability clause that is included which states that if one item in the contract is found to be in breach, it does not invalidate the entire contract. Standard boilerplate contract terms.

    From firsthand experience I can state that is indeed the case. Recently, a friend of mine was deactivated over one of those complaints that a passenger files that is untrue just to get out of paying a fare. He was unable to sue Uber directly because of the arbitration clause. Instead, he filed a request for arbitration. He heard back from the arbitration folks who said they would be in touch. More time passed and nothing happened. Since Uber did not live up to the request for arbitration as specified in the contract, he was able to then file a small claims suit, for breach of contract, asking for lost wages (to the tune of the maximum allowed by small claims court, in this case, $6,000). The end result was that Uber hired a local attorney who asked him what he wanted in order to setttle the case. He told him he wanted to be reactivated. 2 days before the initial hearing date in court he was in fact reactivated. The key was to get Uber to fail in setting up arbitration, and put themselves in a position to be sued for breach of contract. Anyone who has a serious claim of being unjustly deactivated should take note of this strategy. It is pretty much the only way to get around the arbitration clause.
    Ms.Doe, Rakos, BenzChino and 18 others like this.
  12. njn


    How long does one have to wait after requesting arbitration before suing?
  13. KevinH


    San Francisco
    He should have settled for lost wages and reactivation.
  14. TwoFiddyMile


    $18.7 million. Uber can't afford that kinda scratch right now.
    tohunt4me and melusine3 like this.
  15. It's too bad that one has to go to such lengths when a rider files a false report just to get a free ride.

    In turn the rider should be charged for filing a false report.

    I'd like to see an outline of the procedures / steps with address' of where to file for arbitration, and a time line / dates one must comply with to go through arbitration then onto small claims court.
    Last edited: Dec 6, 2018
  16. sadboy


    Los Angeles
    I say someone start a thread and see how many more want to signup
    iDriveuThrive likes this.
  17. Tough Poo Poo.

    Money talks faster than a car can crash. ~ TBM ~ Blue. youtube it.
  18. UberBastid


    If they are not honoring the contract, then the contract has been breached.
    Often, there are remedies for breach of either party to a contract, and I haven't read it. Depends on the terms IN the contract re: breach, but it may render the entire contract 'unenforceable'.

    Remedy for breach is in the contract.
  19. Kurt Halfyard

    Kurt Halfyard Moderator Author


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