at tOn November 25, Uber sent an updated Technology Services Agreement to its drivers through the driver app. Like all terms of service we encounter on the internet, the 27-page, single-spaced agreement flashed across their phones when they opened the app hoping to make some money that day. Drivers couldn’t use the app, and therefore drive for Uber, unless they agreed. The app even allows drivers to agree without opening the document at all.
“Nobody reads 30 pages of shit the average human can’t understand in the tiniest font in the world,” one driver from the Philadelphia market told Jalopnik. “When you’re trying to go to work you press ‘I agree’ and they activate your app.”
To be fair, some drivers Jalopnik spoke to did read the entire agreement. But the ones who do often have an even more cynical impression of their relationship with their algorithmic bosses.
“If a driver reads the agreement thoroughly and carefully, it’s painfully clear Uber (and Lyft) don’t ‘have your back’ or support drivers,” said another driver who requested anonymity out of fear of retaliation from the ridehail companies. “I think most drivers would be stunned if they realized how truly on their own they are out there on the streets in their own cars with total strangers in the back seat.”
Among the many provisions that make this clear is the arbitration provision, which requires drivers to settle disputes with the company in private, closed-door proceedings decided by an arbitrator paid by Uber rather than in court. It also prevents them from joining class-action lawsuits such as over their employment status as independent contractors.
Not only does the mere presence of an arbitration provision exemplify the control Uber wishes to exert over its so-called “driver-partners,” but so does the history of that provision, how it came to be, and what options drivers have to fight it.
Buried at the bottom of the agreement, there is a provision that allows drivers to opt out of the arbitration clause, giving them the right to sue Uber in court like normal.
“It’s the companies that are trying to go to arbitration because it’s to their advantage,” Shannon Liss-Riordan, the lawyer who fought Uber for the right to opt out of arbitration, told Jalopnik. “Systematically, it’s a system that helps corporate defendants.”
Arbitration provisions only work if people agree to them, which is why Uber has made it very easy to agree and very difficult to opt out. In fact, Uber tried to prevent drivers from being able to opt out at all. But, due to Liss-Riordan’s efforts, all drivers have to do to opt out is send an email to email@example.com from the email address associated with their Uber account and include:
- a statement that makes clear you are opting out of the arbitration provision
- your name
- your phone number associated with your Uber account
- and the city you live
- It wouldn’t hurt to clearly state the email address associated with your Uber account as well, even if the opt-out provision doesn’t specifically state that you must
Alternatively, drivers can use an online tool created by Rideshare Drivers United that walks them through the process. Drivers must do this within 30 days of agreeing to the provision, which gives drivers until December 25, 2019 if they agreed the day the new agreement was distributed.
Three experts Jalopnik spoke to—one law professor and two labor lawyers—made it clear that drivers should absolutely do opt out, with no downside to opting out of the arbitration clause. At the most basic level, drivers can always agree to pursue arbitration later; judges are typically more than happy to remove cases from their docket, and Uber obviously is predisposed to prefer arbitration. So, at the very least, opting out keeps all options on the table.
Jalopnik sent Uber a list of questions about the arbitration provision, including why the company defaults to making it opt out rather than opt in, and if the company has any stance on what drivers should do. Uber declined to comment. In 2018, Uber’s General Counsel Tony West wrote a post saying that Uber would no longer require require mandatory arbitration for sexual assault or sexual harassment claims, but that “arbitration has an important role in the American justice system and includes many benefits for individuals and companies alike.”
Not everyone sees it that way. For others, the arbitration clause encapsulates the imbalance of the gig economy in which the cards are stacked against workers from the outset. The arbitration clause, for better or worse, has proven to be a key tool in the gig economy structure to close legal doors, forcing them down a specific, corporate-friendly path that helps maintain their version of the status quo.
Uber seems to know this, because it fought hard in court to prevent drivers from being able to opt out at all. Then, it fought again to make is as difficult as possible to do so. Uber even went so far as to argue in open court that creating an email address was too technically difficult for it to implement.
Uber is hardly the only company that prefers arbitration agreements, but it and other gig economy companies arguably benefit more than others from pushing drivers (and riders) to signing them, because their entire business model is built on a controversial worker classification. The arbitration provision has proven to be a hefty road block to challenging that employment status, a fact perhaps best illustrated by the fact that the lawsuit Liss-Riordan filed in 2013 was settled in March 2019 (only drivers in California and Massachusetts who either drove for Uber before July 2013 when they had no mandatory arbitration clause or who opted out could have a piece of the $20 million settlement).
Industry-threatening legal decisions, like whether drivers are independent contractors, or if surge pricing is illegal, get bogged down in years of litigation merely about whether or not the court has jurisdiction over the lawsuit. And if the issue is successfully forced to arbitration, which it often is, then whatever the arbitrator rules will not set a legal precedent. Instead, the ruling will not be a matter of public record and apply only to that one driver (although an ongoing arbitration case hopes otherwise).
A 2017 article in the University of Chicago Legal Forum summed it up thusly:
So far, the results are troubling: while it is too early to say what is happening to drivers who pursue arbitration, it is apparent that IACs [Individual Arbitration Clauses] are impeding the development of answers to questions about drivers’ employment status, and significantly reducing the value of workers’ claims in litigation.
In other words, the arbitration clauses are working just as intended. But the more drivers that opt out, the better off they will be.
“Arbitration provisions, in my opinion, are the legal instruments responsible for the existence and proliferation of the gig economy in its current state,” said Veena Dubal, a law professor at UC Hastings who studies the legal implications of the gig economy. “The provisions have prevented legal judgements on any number of matters—including employment status—thus allowing the companies to continue to operate outside the boundaries of the law.”
It used to be much harder to opt out of the arbitration clause.
On July 15, 2013, Uber sent a “Software License And Online Services Agreement” to all of its drivers through the Uber app. The agreement stipulated, among other terms, that “Uber does not provide transportation services and is not a transportation carrier.”
Should an Uber driver have read the entire 15-page agreement over which they could not negotiate and needed to agree to in order to keep earning money, they would have learned that they were waiving their rights to sue Uber in court and agreeing to private mediation, otherwise known as arbitration, to be decided by an arbitrator rather than an appointed judge.
Critically, it also prevented them from suing Uber as a group if the circumstances applied to all drivers, an important mechanism for customers of any business to challenge corporate wrongdoing in court. Uber maintained then, and still maintains today, that drivers are their customers.
“Class actions are the typical private enforcement mechanism to force a company to stop violating the law,” Dubal said. “Because enough drivers have not opted out of these arbitration agreements to date, Uber has avoided a class action judgement which would otherwise force it to change how it does business.”
To be fair, the 2013 arbitration provision did include an opt out mechanism. All drivers had to do was merely hand-deliver a letter to Uber’s General Counsel, whose identity the agreement did not disclose, within 30 days.
If the driver could not hand-deliver a letter, he or she had to send their opt-out in hard copy via overnight mail, and only via overnight mail.
The irony of this was not lost on Liss-Riordan, who filed a class-action lawsuit against Uber a month later that, among other things, challenged the validity of the arbitration provision.
One of the grounds on which she challenged it was how onerous it was to opt out of. Uber, a company slavishly devoted to the Silicon Valley ethos of technological disruption, refused to acknowledge the existence of the internet in its arbitration opt-out process.
Even more ironically, although the lawsuit Liss-Riordian filed was fundamentally about the drivers’ employment status as independent contractors, it was specifically about the lack of tipping functionality within the Uber app. At the time, and for years afterwards, Uber co-founder Travis Kalanick steadfastly refused to include a tipping function on the basis that tipping created too much “friction” for riders.
Yet, when it came to drivers opting out of the arbitration clause, suddenly, friction was not a concern. It was, in fact, preferred.
The first six months of the lawsuit, O’Connor v. Uber, dealt solely with the arbitration provision; whether it applied, to whom it applied, and whether Uber had to change it now that the company had been sued.
Three months into the case, the judge, Edward Chen, told the respective parties to negotiate a new arbitration clause to address various problems with the 2013 one. The new one had to make clear much earlier in the document that Uber was the subject of ongoing litigation and the arbitration clause would make drivers unable to join that suit. It would also have to make it easier for drivers to opt out, perhaps using this newfangled invention called the internet.
That didn’t go well. Four months later, the two sides said negotiations were “unfruitful” and asked Judge Chen to settle the matter himself. In that ruling, Chen noticed Uber’s suggestion made a pretty darn significant change: drivers would no longer be able to opt out at all.
From the ruling:
However, the Licensing Agreement does not comply with the Court’s Order in that it does not give any means of opting out. Contrary to the prior Licensing Agreement that gave 30 days to opt out of the arbitration provision (by hand delivery or overnight mail), the New Licensing Agreement allows no opt out. The New Licensing Agreement provides: “IF YOU CHOOSE NOT TO ACCEPT THIS AGREEMENT (INCLUDING THE ARBITRATION PROVISIONS SET FOR IN SECTION 14.3), YOU WILL NO LONGER HAVE ACCESS TO THE UBER SERVICES AND SOFTWARE.”
This was particularly irksome because Uber was now facing a potentially ruinous class action lawsuit, the very same case over which Judge Chen was presiding. Uber was trying to prevent any new drivers from joining that case by giving them an ultimatum: either agree not to join this or any other lawsuit or don’t work for us.
On the other side, Chen also had problems with the plaintiff’s wording, which he thought made it sound like the lawsuit would likely prevail and included a URL for information on the suit the court didn’t control. He directed the parties to craft a new agreement that used Uber’s wording but kept the opt out provision and made it less onerous to use it.
A month later, Uber returned to court with an updated proposal. This one did make a concession. It allowed for drivers to opt out via regular U.S. mail, which at least no longer required the notice to be shipped overnight.
Liss-Riordan thought this wasn’t good enough. After all, Uber is a “technology company,” according to that very same agreement. Why not use, ya know, technology, like email?
Uber replied by saying, technology? What technology?
None of the electronic opt-out mechanisms proposed by Plaintiffs’ counsel currently exist, and all would require Uber to reprogram its systems and create new functionality. This burden is simply unwarranted.
It’s worth noting that one of the specific “mechanisms” Liss-Riordan proposed was an email address. As in, Uber would set up an email address, tell drivers what that email address is, and then drivers could email it. But that would be an “unwarranted” burden, according to Uber.
Unsurprisingly, Chen was having none of it. He agreed with Uber that it was perhaps burdensome to allow drivers to opt out directly in the agreement but he rejected the idea that setting up an email account was burdensome. He ruled:
However, little technology is required simply to provide an email address to which drivers can send an opt out notice...Moreover, given that the notices and Revised Licensing Agreement are sent electronically, it is only fair that drivers be afforded an opportunity to opt out electronically.
For her part, Dubal, the law professor at UC Hastings, thinks Chen got this wrong. She told Jalopnik this line of argument from Uber was “patently absurd... Uber represents itself to be a ‘technology’ company that is on the leading-edge of advanced AI. They can’t create an ‘opt out’ box in their electronic contract? That’s ridiculous.”
In either event, that is how it came to be that Uber created an email address for drivers to opt out of arbitration. A judge had to make them.