Forced Arbitration

When you download a rideshare app such as Uber or Lyft, you’re required to agree that you’re above the age of 18, you’re not using a stolen credit card, and that you won’t seek a jury trial against the company. This means any claims against the company would need to be settled in arbitration.

Is That Legal?

However, a judge in Philadelphia has recently ruled that since there’s no way to prove if riders read the terms and conditions before signing, they cannot be forced to settle claims without the option for trial. This may seem like a petty loophole but unlike some other term agreements, Uber does not require that the user open the hyperlink to review the company’s terms of service. Uber does have until early February to appeal that decision.

This forced arbitration clause has been in court before, with sexual misconduct cases as well as price surging. These cases have found mixed results, with one judge refusing to endorse the arbitration clause because the policy section “failed to grab the user’s attention” and another judge begrudgingly upholding their contract stating, “This being the law, this judge must enforce it.”

What Does it Mean?

An arbitration clause is hidden in the fine print of many consumer contracts such as rideshare services, cell phone providers, and credit cards. While many people don’t dig into the lengthy terms and conditions that they’re signing, they are often binding.

Forced arbitration means you relinquish your right to a trial by jury and must settle any claims in a private arbitration. These private arbitrations are often slanted in favor of the corporation as they get to choose the location and arbitrator. They’re also beneficial to the corporation because they often require that the proceedings are kept confidential, ensuring the public is not informed of the issue even if it is pertinent.