There’s a good chance you overlooked the fine print. Just before Thanksgiving, Uber, the mega-popular ride-sharing company, was in the process of changing its Terms of Service agreement to include a mandatory arbitration clause, which is now making it much tougher for riders to sue the company in the event of a crash. Now we’re well into January and it’s likely you’ve accepted those terms. That doesn’t mean you shouldn’t know what those terms mean.
From Associate Attorney Brett Manchel:
Can you tell us about Uber’s new Terms of Service and Mandatory Arbitration?
One of the more common elements of a Terms of Service agreement is an arbitration clause, which allows big companies to protect themselves by requiring both parties to work towards a settlement as opposed to going through the motions of a lawsuit. Lawsuits and the costs associated with them can reach upwards of millions of dollars under certain circumstances, so it’s not surprising that a company like Uber would want to take the arbitration route. Many big companies do. But ultimately what they’re doing is depriving people of a fair hearing in front of a jury. That’s inherently unfair to someone who might have been paralyzed as a result of a crash, for example, and who might never have a normal life again. Instead, companies like Uber should do more to prioritize good driving practices instead of passing the buck, so to speak.
So what does Uber’s new Terms of Service agreement mean for riders?
Uber has essentially rolled out an update to its Terms of Service, which includes the mandatory arbitration clause I was just talking about. That puts riders in a serious predicament because they’re effectively giving up their right to sue in court and to bring their case in front of a jury. Basically, Uber is saying if you don’t agree to give up your right to sue us in court, we don’t want you to use our service.
Can they enforce that?
In reality, they’d have a very difficult time. The question we’re getting now is, “What happens if I opt out of mandatory arbitration?” Well, first off, it means you’re most likely protecting your right to sue in court, which is a good thing. At the same time, you’re also taking a stance against a company and its interests. What happens then is anyone’s guess; will Uber lower your rider rating? Will they blacklist you? Will your wait time for a car increase? But the risk that a big company takes action against an individual as some form of retaliation is highly unlikely. It’s not a practical way for people or businesses to go about their time, unless extraordinary circumstances demand it.
Can I opt out?
Riders were given the opportunity to opt out of the new Terms of Service agreement at the end of December. You’ve likely accepted those terms unwittingly since then. If you want to give it a try, you can email email@example.com with your name and the Terms of Service you want to opt out of. Or you can send a letter to a registered agent with the same details. What that means is that you’re subject to the old Terms of Service, which does not have an effective mandatory arbitration clause. Instinctively, consumers should always err on the side of opting out of new Terms of Service agreements if they include a mandatory arbitration clause. You never want to give up your right to bring a claim against an entity. Arbitration might be faster, cheaper, but it negates your ability to get a fair hearing if that’s the route you want to take. The bottom line, whether it’s Uber or anyone else, is that you should always be aware of new Terms of Service agreements, as they could end up costing you some of your rights as a consumer.
Brett Manchel is an Associate Attorney at Levinson and Stefani.