Uber’s Efforts For Arbitration Pay Off
When you need a taxi, the easiest place to look is on your smartphone. Uber provides an easy way to access transportation near you. The app allows you to submit a request for a trip. The request is automatically sent out to drivers within the area. You typically don’t have to wait for a long time for a taxi to drive out to where you are.
Many drivers have found Uber to be a great way to earn some extra income. Abdul Mohammed, for example, signed up to drive for Uber in 2012. The Boston resident had to agree to various terms and conditions in his contract with Uber Technologies Inc.
This agreement required that drivers who wanted to access the app to waive their right to ever file a class action lawsuit against the company. Drivers in effect agreed to have their disputes settled by arbitration.
While the agreement seemed innocent enough to Mohamed, it would prove to be a major hindrance in the future.
The onset of the problems
Mohamed continued to drive for Uber until October 2014 when he discovered his access to the app had been cut off. He later found out that he had been cut off due to the discovery of negative information that was reflected in his consumer credit report.
Mohamed wasn’t the only one to whom this happened. Ronald Gillette, a resident of San Francisco, joined Uber in 2013. Like Mohamed, he agreed to waive his right to participate in class actions suits. Just like Mohamed, his access to the app was also cut off as a result of information gathered from his consumer credit report.
Both Mohamed and Gillette filed lawsuits against Uber. Although their lawsuits were separate, they were similar and therefore could have been consolidated into a class action suit if other drivers came forward. However, this wouldn’t be the case. Both suits claimed that Uber’s use of the information obtained from the consumer credit reports was in violation of the Fair Credit Reporting Act (FCRA) as well as the California Consumer Credit Reporting Agencies Act.
The best chance for the two drivers to receive compensation from the company lay in their individual lawsuits becoming part of a class action. However, the technology giant moved for both lawsuits to be resolved through arbitration. Ultimately, the United States Court of Appeals for the Ninth Circuit recently ruled in favor of Uber that because of the contractual arbitration provisions, the disputes must be arbitrated.
Related Articles:
- consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-proposes-prohibiting-mandatory-arbitration-clauses-deny-groups-consumers-their-day-court
- consumerreports.org/cro/shopping/the-arbitration-clause-hidden-in-many-consumer-contracts
- personalinjury.com/blog/bad-consumers-ca-court-upholds-arbitration-consumer-contracts
- personalinjury.com/blog/finance-companies-use-arbitration-clauses-stifle-consumer-lawsuits
