While the choice might have initially deterred lawsuits, 60,000 arbitrations is “a death by a thousand cuts,” Cremins said. “The volume is impossible to deal with from an administrative and legal perspective.”
Arbitration is especially popular among so-called gig economy companies, which rely on classifying workers as independent contractors. For the drivers, that confers more flexibility, but also lacks the benefits that come with a traditional job. The result is a flood of claims that Uber illegally foists the major costs of running its ride-share business, mostly car expenses like fuel, insurance and maintenance, on the backs of its drivers.
What Uber didn’t count on, experts said, is drivers and labor lawyers calling its bluff. Uber, especially after winning key court rulings upholding its use of arbitration, bet drivers and their lawyers were more likely to throw in the towel than play David against the ride-hailing giant in individual arbitrations — the legal equivalent of hand-to-hand combat against a vastly better armed and stronger opponent.
