Uber’s Arbitration Addiction Could Be Death by 60k Cuts

https://www.bloomberg.com/news/articles/2019-05-08/uber-s-arbitration-addiction-could-be-death-by-60-000-cuts

by petethomas • 7 years ago

175 121 7 years ago

kevin_b_er• 7 years ago

I view this is as a good thing. Corporations love to strip out the ability to get disputes against them settled by a court of law. The arbitration process is secretive and designed for companies to win, eventually.

Let their swords against just and favourable conditions of work be used against them.

jschwartzi2• 7 years ago

It's pretty amusing that their use of arbitration to prevent class actions is now being used against them. The nice thing about a class action from the company's perspective is that they only have to deal with one court case against a class being represented by a plaintiff as opposed to cases from every single member of the class. Sending all the members of the class through arbitration one-by-one ends up costing far more than the class action would have.

I think we'll see forced arbitration go away if more classes band together and go through arbitration one-by-one.

londons_explore• 7 years ago

Only for major claims though. If Uber stole $25 from me, it isn't worth taking a day off work to go to the arbitration session.

Teever2• 7 years ago

That depends entirely on what your motivation is.

If your motivation is to get back $25 then you're right -- it isn't worth your time to coordinate with other people to DDOS Uber with mass-arbitration.

But if your goal is to fuck over Uber out of principle for them fucking you over that is something you can't really put a price on.

On top of that knowing that you're using their scummy forced arbitration clause against them is a cherry on top of the schadenfreude sunday.

NullPrefix2• 7 years ago

If Uber stole $25 from me, it isn't worth taking a day off work to go to the arbitration session.

You're sending a pretty strong signal there. Do you know who's listening for it?

I bet that this personal data, that you are giving away money is really valuable to some 3rd party.

pmiller2• 7 years ago

If it’s not worth going to arbitration for $25, then it’s not worth going to court, either, so what’s the difference?

dymk2• 7 years ago

You can do a credit card chargeback. I've done that against both Uber and Lyft when they screwed up my ride but still charged me, and refused a refund through-app.

I didn't get banned, American Express handled the negotiation for me, and I got my money back and with a canned apology email from the companies.

stronglikedan• 7 years ago

I'd take the time to start he arbitration process and then just not show up (for the same reason as you). They likely still incur most of the costs as if you did, minus whatever payout would result.

rightbyte• 7 years ago

Society need altruistic punishers of antisocial behaviour. I would probably not do it for 25 usd if I demanded it of them even though it would be good if I did, but surely if someone demanded 25 of me.

username223• 7 years ago

I'm loving it, too. It's a cheeky strategy, and I hope to see it used at other companies that make workers sign binding arbitration agreements, then screw them over. But then I read this:

Lawyers who claim to represent more than 12,000 drivers who have filed arbitration demands have sued Uber, arguing the company has refused to pay obligatory filing fees to get the process started.

So apparently Uber can just say "we're not gonna" if they decide that arbitration is no longer working in their favor. Does that open them up to a class action suit on behalf of all the drivers who were denied arbitration? I have no idea, IANAL.

jschwartzi2• 7 years ago

Not necessarily. It depends on why the arbitration agreement was considered binding in the courts. If it's because it's assumed to be a parallel legal process then I could see a class action being undertaken with the argument that Uber is using the arbitration clause to deny the class their due process rights. I am also not a lawyer but I'm assuming that the courts are presided over by reasonable people which is usually the case.

Animats• 7 years ago

Yes, it does open them to litigation. Failure to pay arbitration fees is now considered wavier of a contractual term to demand arbitration in many jurisdictions.[1][2][3]

The American Arbitration Association has been cracking down on companies which refuse to pay. They send out letters to companies telling them that not only does the AAA reject this arbitration, the company can no longer use AAA services at all. This throws the case back into the judicial system.

"The cost of arbitration is turning out to be real leverage for plaintiffs' lawyers who are smart enough to adapt to the privatization of litigation. It may not be long before companies like Uber start wishing for the good old days of class actions."

[1] http://www.outsourcingjustice.com/11th-circuit-hernandez-aco... [2] https://demlplaw.com/firm-blog/new-decision-failure-pay-arbi... [3] https://www.publicjustice.net/bait-and-switch-many-corporati...

Sephr2• 7 years ago

Uber tried to get me to agree to arbitration and sign an NDA for a mere $100 of compensation to replace my fianceé's clothes soiled by an Uber car.[1]

We were out late one night and we called an Uber to get back home. After a very long wait and an odd delay where the driver stayed in the same position on the map for 10 minutes, they started driving again and then arrived. (We suspect that during this time one of the passengers shit themselves)

My fianceé sat down and immediately felt excrement all over her clothing. It was very dark so she did not see this until after she entered the car and sat down. We also noticed that the other supposed passenger mentioned in the Uber app already bailed.

We were never compensated as we would not agree to the NDA. I don't think we could agree to the NDA even if we wanted to because I already tweeted about the incident before being offered compensation.[2]

Uber mentioned that the NDA isn't required in cases of sexual assault, but it's still required even if you are potentially exposed to sexually transmitted diseases through human excrement. What the fuck?

1. https://go.eligrey.com/t/uber-nda.pdf

2. https://twitter.com/sephr/status/1068251146676891649

thatoneuser• 7 years ago

Why not take them to small claims?

Sephr2• 7 years ago

I suspect that a successful small claims suit would also result in a ban from Uber.

Unfortunately I still use Uber occasionally, so I'd rather not risk getting banned.

elliekelly2• 7 years ago

Because any action in small claims court would be summarily dismissed. Uber's TOS includes an Arbitration Agreement.[1]

[1] Paragraph 2: https://www.uber.com/legal/terms/us/

conanbatt• 7 years ago

For 100 bucks?

pbreit• 7 years ago

"We couldn't agree to the NDA even if we wanted"

Why would that be the case? The NDA would be fore going forward.

JumpCrisscross• 7 years ago

I don't think we could agree to the NDA even if we wanted to because I already tweeted about the incident before being offered compensation

NDAs usually exclude from the definition of confidential information anything disclosed before the fact. They also don’t typically restrict you from letting regulators, et cetera know things.

Unless you were planning on writing a book about the experience, the NDA probably wasn’t restricting you. Unless you were planning on going to court, the arbitration clause probably made your ability to seek redress cheaper.

Note: I am not a lawyer. This is not legal advice.

madengr2• 7 years ago

Sorry for the experience, but this is great comic material. LMAO.

How clean will these cars be when they are fully automated? Funny to think Tesla wants you to send your personal car off to a taxi fleet when not in use.

dymk2• 7 years ago

Even when stuff like this happens, they're so incredibly rare, it's a non-issue. Accidents happen. Presumably in a fully-automated solution, you'll have the ability to report a car as "needs service".

zaroth2• 7 years ago

Operating at scale means you have to get good at handling the corner cases. Whether it’s AirBnB or Uber or Tesla, shit happens and they need to be able to deal with it quickly and professionally.

If cars getting dirty is the worst problem Tesla has with their Fleet, they would be doing pretty tremendously well at that point.

At least you never need to worry about background checking the driver.

sametmax2• 7 years ago

Why complain to uber ? It's the driver's fault.

What would be the corrective action anyway ? That none of their drivers ever make any mistake ?

clucas• 7 years ago

An analogy: Why complain to BP when one of their employees hits the wrong button and blows up an oil rig, spilling massive amounts of oil into the Gulf of Mexico? It's the employee's fault.

The reason to hold an employer liable for an employee's actions when acting in the course of employment is that this creates good incentives for the employer to institute good policies and procedures, and proper discipline of employees when they are on the job. This is a well-established legal doctrine called "respondeat superior."

Now, the $100 question: are Uber drivers employees? And in either case, how much liability flows up to Uber for a driver's malfeasance? I believe that's still unsettled, but I don't think it's just as simple as "if you have a problem with a driver, that's on the driver, not on Uber." Uber should have some responsibility for establishing standards for their drivers, and they should be held responsible when they are breached.

aetherson• 7 years ago

The corrective action would be that Uber pays for the dress, obviously.

Where does this philosophy of yours end? "Well, yes, that cop did kill your son, when your son was unarmed and innocent. Why complain to the police department? It was the officer's fault. What would be the corrective action, anyway? That no police officer ever makes a mistake?"

mikeash2• 7 years ago

The same reason I complain to any other company when I have a problem with their service: it’s their responsibility and they are the ones who can make it right. Why would I complain to the driver?

elliekelly2• 7 years ago

I nearly fell off my chair reading that agreement. The scope is unreal. Especially considering the settlement amount is a mere $100. For example, the non-disparagement clause isn't limited to the incident. You'd have keep any negative opinions about Uber to yourself for the rest of eternity.

I thought it was odd that only you were a party to the agreement and not your fiance and then I got to paragraph 5 and realized their request is even crazier... they want you to indemnify, defend, and hold them harmless from any other liabilities that might arise from the incident. If it turned out your fiance contracted a deadly illness from her contact with human waste and she sued Uber (or worse, her insurance company sued Uber for reimbursement) not only would you be on the hook for the damages, you would have to pay all of their legal fees during the process.

For a $100 settlement.

I have to imagine you are in the small minority of people who even reads these contracts of adhesion so I'd bet most people who sign these have no idea what they're giving up.

That is truly unconscionable.

nabla9• 7 years ago

I suspect that agreements like this don't actually hold in court. They are made just in attempt to intimidate.

whitepoplar• 7 years ago

holy shit!

the_watcher7• 7 years ago

I'd have redlined the hell out of the agreement (basically striking everything but "I agree not to disclose this"), added "I agree <legalese> to release Uber from all future claims related to my wife's clothing related to this trip", sent it back, and seen what happened. I doubt they'd have accepted it, but it could have been interesting to see their response.

dredmorbius2• 7 years ago

Contracts are increasingly provided in electronic format only.

Makes markup difficult.

(As it does providing you a copy.)

josh_fyi• 7 years ago

Why does Uber agree to pay most of the arbitration fee? Why don't they write a contract that requires drivers to pay it?

jellicle2• 7 years ago

Presumably because they wanted to make sure the arbitration company was strongly biased towards them - obviously the arbitrator will lose the contract from Uber if they don't decide most cases in Uber's favor.

It was a good plan with the only flaw being they didn't anticipate so many drivers banding together to file for arbitration that the fees themselves are annoyingly high.

SilasX2• 7 years ago

NAL but speculating: I assume it was because arbitration clauses (contrary to the popular perception) have to make some attempt at fairness in order to hold up in court, so Uber's lawyers figured that, by making Uber responsible for the fee, it would look more like a reasonable arrangement that a driver with actual bargaining power might agree to.

koala_man2• 7 years ago

Especially given that Uber chooses the arbiter.

Arbitration clauses don't work as intended if the company can't choose a biased arbiter to rule in their favor, so this is always part of the contract.

b_tterc_p2• 7 years ago

Are there penalties for filing frivolous arbitration suits? Or suits that are just reasonable enough but aren’t likely to win?

crooked-v• 7 years ago

How do you define "frivolous"?

b_tterc_p2• 7 years ago

I’m interested in the answer to this question for a variety of definitions.

One time uber’s UI glitched out causing an unwanted purchase and their customer service refunded me a day later. Could I have just sued them instead of trying to reach customer service?

Could I sue them for something I thought they did with no reasonable proof?

I’m wondering if there are limitations to abuse not for the purpose of extracting wealth from a company but for attacking the arbitration system.

tareqak3• 7 years ago

I wonder how successful a company that specializes in fighting and negotiating in arbitration proceedings would need to be such that the customer's cost in participating would be affordable: a sort of tech-enabled law firm. Arbitration-as-a-Service.

ma2rten2• 7 years ago

As the article states, the company already pays the cost of arbitration. You can go into arbitration without paying anything.

tareqak3• 7 years ago

How do you guarantee that the arbiter that you aren’t paying for will treat you fairly?

the_watcher7• 7 years ago

In this case (as well as many potentially similar ones), I'm pretty glad this is happening. That said, are there no SLAAP protections in arbitration cases? As I alluded to earlier, I imagine Uber has enough reasonable cases for arbitration that SLAAP-like laws wouldn't protect them, but I can imagine other situations where a company could be bombarded with frivolous arbitration claims.

I think I'm sympathetic to the idea that if you insert a binding arbitration clause, you've chosen to forgo protections like SLAAP. However, say you didn't insert a binding arbitration clause, but didn't expressly forbid it and offer it as an option. Couldn't a coordinated campaign cost a company huge sums of money, as the company bears most of the arbitration costs?

Again, I don't think this is happening in this situation, and I can't say I've heard of it happening, but it's something that came to mind.

Uber’s Arbitration Addiction Could Be Death by 60k Cuts

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