It seems that Uber’s lawyers thought it would be prudent to protect the company from lawsuits by requiring arbitration for customer disputes and by blocking class actions. Both are not uncommon ways for companies to control the legal narrative when it comes to disputes. Mandatory arbitration agreements basically say that if you have an issue, you can only take the company to arbitration, not to court. And class action waivers simply mean that when 100 (or in Uber’s case 31,560) different people have the same issue, they cannot join together to become a class in any kind of class action.
So, the powers that be within Uber put arbitration clauses and class action waivers in their ever-present terms of use. Only this time, instead of protecting the corporation, it cost them… to the tune of nearly $91 million in arbitration fees alone.
Uber has been accused of reverse discrimination for waiving delivery fees for Black-owned restaurants. Since Uber’s own rules do not allow the 31,560 different individuals to join together to become a class, there were 31,560 individual demands for arbitration. And 31,560 individual arbitration fees.
Uber claimed that it was “categorically unreasonable” to pay individual fees for tens of thousands of “materially identical arbitrations.”
The New York State Supreme Court disagreed with Uber. Uber then took the issue up on appeal saying that the supreme court’s ruling was “ungrounded in the law and riddled with clear errors.” The appeals court also disagreed saying that Uber made the decisions that resulted in the arbitration fees.
The courts seem to be telling Uber, “You made your bed, now you have to pay $91M.”
Sources
Image courtesy of Dariusz Sankowski