12,000 Uber Drivers Claim Uber Is Now Failing To Pay Arbitration Fees (reuters.com)

Uber's terms of service prohibit its drivers from joining class action lawsuits, Gizmodo writes, adding that over 12,000 drivers have now "found a way to weaponize the ridesharing platform's restrictive contract in what's possibly the funniest labor strategy of the year."

An anonymous reader summarizes their report: Uber's contract requires that all driver lawsuits be arbitrated (instead of argued in open court), but "While arbitrating parties are responsible for paying for their own attorneys, the terms state that 'in all cases where required by law, [Uber] will pay the Arbitrator's and arbitration fees'... A group of 12,501 drivers opted to take Uber at its word, individually bringing their cases up for arbitration, overwhelming the infrastructure...." (Gizmodo calls it Uber's arbitration policy "coming back to bite it in the ass.") A petition in California's Northern District Court points out that Uber now is apparently overwhelmed. "Of those 12,501 demands, in only 296 has Uber paid the initiating filing fees necessary for an arbitration to commence [...] only 47 have appointed arbitrators, and [...] in only six instances has Uber paid the retainer fee of the arbitrator to allow the arbitration to move forward."

The drivers' lawyers are now complaining that Uber's delinquincies "make clear it does not actually support arbitration; rather, it supports avoiding any method of dispute resolution, no matter the venue... At this point, it is fair to ask whether Uber's previous statements to the 9th Circuit about its desire to facilitate arbitration with its drivers were nothing more than empty promises to avoid litigating a class action."

Comments

Re:Arbitration is fraught with issues

[dgatwood]

Well, yes, and it benefits a broken, hopelessly overloaded court system by preventing it from becoming more so. And it prevents disputes from dragging on needlessly for decades when they could be solved by arbitration in a couple of weeks.

Arbitration — even binding arbitration — is great when applied to contracts between two groups of approximately equal power, e.g. when two individuals or small companies negotiate a contract with each other in good faith.

The problem with arbitration is when it gets applied to a contract of adhesion (any contract created by one party and given to the other in a take-it-or-leave-it way). In those situations, non-binding arbitration would be fine, and it would even be fine if the larger party agreed to let arbitration be binding upon them. But when it is binding upon the lesser party, it becomes highly problematic, in large part because arbiters have an inherent conflict of interest.

You see, a random person going after a big company will almost certainly never give an arbiter repeat business. However, a corporation might. Therefore, it is in the arbiter's best interest financially to find for the corporation more often than not. Further, in many cases, the corporation pays the bills, which makes it even more in the arbiter's interest to find for the corporation. That is why binding arbitration in contracts of adhesion qualifies as unmitigated evil.

To be fair, conflicts of interest can also at least ostensibly occur in a court of law. The difference is that the existence of multiple levels of judicial review makes it dramatically less likely that the larger party can get a favorable verdict through such a conflict of interest unless the lesser party runs out of money (which, of course, can usually be avoided by lawyers agreeing to work on retainer or by getting help from a rights group, such as the ACLU, assuming the case actually has merit).