Uber Uses Arbitration (And Clean Design) To Put Brakes On Consumer Class Action
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Last Thursday, the Second Circuit found that the arbitration agreement in Uber’s Terms of Service was conspicuous enough to be binding and enforceable. As a result, the claims of a putative class of consumers will be dismissed unless they can show that Uber waived its right to arbitrate their claims. Meyer v. Uber Technologies, Inc., 2017 WL 3526682 (2d Cir. Aug. 17, 2017). [This proves my point from last week, that formation is one of the big issues this year in arbitration law.]
For those of you who still take yellow taxis, Uber is a “ride-hailing service,” where customers use an “app” on their smart phones to alert a nearby Uber driver that the customer wants a ride to a specific location. Critically to this case, when customers open an account with Uber, they see black text at the bottom of the registration screen advising that “by creating an Uber account, you agree to the TERMS OF SERVICE & PRIVACY POLICY.” The phrase “terms of service” is in blue font and hyperlinked to a page where the customer can read those terms. The terms include an arbitration agreement that waives the right to any class or consolidated action.
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