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Uber’s Arbitration Addiction Could Be Death by 60k Cuts
- kevin_b_er 8y agoI view this is as a good thing. Corporations love to strip out the ability to get disputes against them settled by a court of law. The arbitration process is secretive and designed for companies to win, eventually. Let their swords against just and favourable conditions of work be used against them.
- jschwartzi 8y agoIt's pretty amusing that their use of arbitration to prevent class actions is now being used against them. The nice thing about a class action from the company's perspective is that they only have to deal with one court case against a class being represented by a plaintiff as opposed to cases from every single member of the class. Sending all the members of the class through arbitration one-by-one ends up costing far more than the class action would have. I think we'll see forced arbitration go away if more classes band together and go through arbitration one-by-one.
- londons_explore 8y agoOnly for major claims though. If Uber stole $25 from me, it isn't worth taking a day off work to go to the arbitration session.
- Teever 8y agoThat depends entirely on what your motivation is. If your motivation is to get back $25 then you're right -- it isn't worth your time to coordinate with other people to DDOS Uber with mass-arbitration. But if your goal is to fuck over Uber out of principle for them fucking you over that is something you can't really put a price on. On top of that knowing that you're using their scummy forced arbitration clause against them is a cherry on top of the schadenfreude sunday.
- dralley 8y agoMost people not making upper 5 or 6 figure salaries don't have the luxury of taking a day off work just to stick it to the man.
- pixl97 8y agoThe man knows this, and this is why the man gets away with screwing you over.
- Teever 8y agoI anticipated a response like this but I don't think it applies in this situation. According to the article around 60,000 people have found the time to make this happen. What we are seeing is a fundamental aspect of human nature and that is that spite is a great motivator. You're right, most people can't afford to do this, but many can. Enough that it is hitting Uber where it hurts -- the bottom line. And as someone who favours stronger protections for workers that is most pleasing.
- ThrustVectoring 8y ago>spite is a great motivator. This is exactly why spite is a great motivator - it encourages people to do better game theory (in the context of the ancestral evolutionary environment, at least). If you never go after the $25 someone owes you just out of spite, people will repeatedly take advantage of you in ways that aren't worth remedying.
- Balgair 8y agoI wouldn't say that spite is the only thing at work here. Humans are incredibly tied to fairness, of which I think spite is a partial sub-set. Some people will spend more cash to remedy the unfairness of the situation https://www.psychologicalscience.org/news/releases/are-humans-hardwired-for-fairness.html https://www.psychologicalscience.org/news/releases/are-human...
- ryandrake 8y ago
- NullPrefix 8y ago> If Uber stole $25 from me, it isn't worth taking a day off work to go to the arbitration session. You're sending a pretty strong signal there. Do you know who's listening for it? I bet that this personal data, that you are giving away money is really valuable to some 3rd party.
- fwip 8y agoIs the signal "is employed?" Minimum wage workers make $50+ dollars a day. Even part time, most shifts are at least long enough to make $25.
- michaelmrose 8y agoIts not like PTO is a thing or you can ask to be scheduled Monday off instead of Tuesday this way and lose zero money.
- fwip 8y agoYour sarcasm is noted, but not everyone has that flexibility. Nor is taking PTO to sit in arbitration for a while for $25 an appealing option for many people.
- michaelmrose 8y agoNot being screwed over in the future is pretty appealing.
- NullPrefix 8y agoLet me clarify, the signal is that you can be swindled for $25 and won't be fighting back.
- mrguyorama 8y agoThose same minimum wage workers also couldn't really afford to lose that $25 in the first place
- pmiller2 8y agoIf it’s not worth going to arbitration for $25, then it’s not worth going to court, either, so what’s the difference?
- ThrustVectoring 8y agoYou can play chicken about actually going to court over the matter, too, by writing a professional-looking demand letter stating your claim and mailing it return-receipt requested to the corporation's service agent. Costs about $10 (not including labor, because IMO it's personally satisfying), and has roughly a one-in-three chance of them simply paying you to avoid the expense of small claims court.
- dwyerm 8y agoIs it worth sending big lawyers who will get millions? You'll probably only get a coupon for a free ride. You're still not going to get your $25 back, but at least you'll get to sic big lawyers on the company. It isn't an accident that arbitration clauses come with class action waivers.
- dymk 8y agoYou can do a credit card chargeback. I've done that against both Uber and Lyft when they screwed up my ride but still charged me, and refused a refund through-app. I didn't get banned, American Express handled the negotiation for me, and I got my money back and with a canned apology email from the companies.
- stronglikedan 8y agoI'd take the time to start he arbitration process and then just not show up (for the same reason as you). They likely still incur most of the costs as if you did, minus whatever payout would result.
- rightbyte 8y agoSociety need altruistic punishers of antisocial behaviour. I would probably not do it for 25 usd if I demanded it of them even though it would be good if I did, but surely if someone demanded 25 of me.
- username223 8y agoI'm loving it, too. It's a cheeky strategy, and I hope to see it used at other companies that make workers sign binding arbitration agreements, then screw them over. But then I read this: > Lawyers who claim to represent more than 12,000 drivers who have filed arbitration demands have sued Uber, arguing the company has refused to pay obligatory filing fees to get the process started. So apparently Uber can just say "we're not gonna" if they decide that arbitration is no longer working in their favor. Does that open them up to a class action suit on behalf of all the drivers who were denied arbitration? I have no idea, IANAL.
- jschwartzi 8y agoNot necessarily. It depends on why the arbitration agreement was considered binding in the courts. If it's because it's assumed to be a parallel legal process then I could see a class action being undertaken with the argument that Uber is using the arbitration clause to deny the class their due process rights. I am also not a lawyer but I'm assuming that the courts are presided over by reasonable people which is usually the case.
- Animats 8y agoYes, it does open them to litigation. Failure to pay arbitration fees is now considered wavier of a contractual term to demand arbitration in many jurisdictions.[1][2][3] The American Arbitration Association has been cracking down on companies which refuse to pay. They send out letters to companies telling them that not only does the AAA reject this arbitration, the company can no longer use AAA services at all. This throws the case back into the judicial system. "The cost of arbitration is turning out to be real leverage for plaintiffs' lawyers who are smart enough to adapt to the privatization of litigation. It may not be long before companies like Uber start wishing for the good old days of class actions." [1] http://www.outsourcingjustice.com/11th-circuit-hernandez-acosta-arbitration/ http://www.outsourcingjustice.com/11th-circuit-hernandez-aco... [2] https://demlplaw.com/firm-blog/new-decision-failure-pay-arbitration-fees-voids-arbitration-agreement/ https://demlplaw.com/firm-blog/new-decision-failure-pay-arbi... [3] https://www.publicjustice.net/bait-and-switch-many-corporations-promise-to-pay-arbitration-fees-but-dont/ https://www.publicjustice.net/bait-and-switch-many-corporati...
- Sephr 8y agoUber tried to get me to agree to arbitration and sign an NDA for a mere $100 of compensation to replace my fianceé's clothes soiled by an Uber car.[1] We were out late one night and we called an Uber to get back home. After a very long wait and an odd delay where the driver stayed in the same position on the map for 10 minutes, they started driving again and then arrived. (We suspect that during this time one of the passengers shit themselves) My fianceé sat down and immediately felt excrement all over her clothing. It was very dark so she did not see this until after she entered the car and sat down. We also noticed that the other supposed passenger mentioned in the Uber app already bailed. We were never compensated as we would not agree to the NDA. I don't think we could agree to the NDA even if we wanted to because I already tweeted about the incident before being offered compensation.[2] Uber mentioned that the NDA isn't required in cases of sexual assault, but it's still required even if you are potentially exposed to sexually transmitted diseases through human excrement. What the fuck? 1. https://go.eligrey.com/t/uber-nda.pdf https://go.eligrey.com/t/uber-nda.pdf 2. https://twitter.com/sephr/status/1068251146676891649 https://twitter.com/sephr/status/1068251146676891649
- thatoneuser 8y agoWhy not take them to small claims?
- Sephr 8y agoI suspect that a successful small claims suit would also result in a ban from Uber. Unfortunately I still use Uber occasionally, so I'd rather not risk getting banned.
- josh_fyi 8y agoWhy does Uber agree to pay most of the arbitration fee? Why don't they write a contract that requires drivers to pay it?
- jellicle 8y agoPresumably because they wanted to make sure the arbitration company was strongly biased towards them - obviously the arbitrator will lose the contract from Uber if they don't decide most cases in Uber's favor. It was a good plan with the only flaw being they didn't anticipate so many drivers banding together to file for arbitration that the fees themselves are annoyingly high.
- SilasX 8y agoNAL but speculating: I assume it was because arbitration clauses (contrary to the popular perception) have to make some attempt at fairness in order to hold up in court, so Uber's lawyers figured that, by making Uber responsible for the fee, it would look more like a reasonable arrangement that a driver with actual bargaining power might agree to.
- koala_man 8y agoEspecially given that Uber chooses the arbiter. Arbitration clauses don't work as intended if the company can't choose a biased arbiter to rule in their favor, so this is always part of the contract.
- SilasX 8y agoUber having sole choice over the arbiter would go against my explanation being the right one. Biased selection of the arbiter is also a reason why (AIUI) such a contract wouldn't hold up in court.
- koala_man 8y agoI meant that the contract would seem especially unfair if Uber could choose an arbiter they didn't have to pay for. Even if they didn't outright choose an expensive one to squash claims, it would be unfair to make an individual pay for a service they can and want to get cheaper elsewhere (on less favorable terms for Uber). Unless there's blatant cronyism and abuse of power, I don't think biased arbitration by itself would fail to hold up. Judges are humans with personal ideologies too, so you can pick some that do everything by the book and still skew the result in your favor (especially averaged over 60,000 cases)
- b_tterc_p 8y agoAre there penalties for filing frivolous arbitration suits? Or suits that are just reasonable enough but aren’t likely to win?
- crooked-v 8y agoHow do you define "frivolous"?
- b_tterc_p 8y agoI’m interested in the answer to this question for a variety of definitions. One time uber’s UI glitched out causing an unwanted purchase and their customer service refunded me a day later. Could I have just sued them instead of trying to reach customer service? Could I sue them for something I thought they did with no reasonable proof? I’m wondering if there are limitations to abuse not for the purpose of extracting wealth from a company but for attacking the arbitration system.
- CydeWeys 8y agoThe amount you'd be suing/arbitrating for would be something small, right? The cost of one ride? They'd probably just choose to give you your money back rather than go through any more involved process. And keep in mind, it's a lot of hassle to file suit or arbitration. And you need to be able to show in good faith that you tried using reasonable channels to resolve the dispute first, i.e. if you never even contacted customer support with your complaints then that's not good for you. As an example, I recently had a Lyft to the airport that was priced up front at $80 but was billed at $120 post-arrival. Part of the problem was the airport drop-off zone was under a roof and the GPS signal probably didn't work and the ride kept running for at least 10 minutes after I'd been dropped off. It took all of two minutes to contact customer support and get refunded the extra $40. I'm not going to go to arbitration in this case which costs me two orders of magnitude more effort and has a lower chance of getting my money back, because I would've never even have notified them of the issue prior to escalating too high.
- tareqak 8y agoI wonder how successful a company that specializes in fighting and negotiating in arbitration proceedings would need to be such that the customer's cost in participating would be affordable: a sort of tech-enabled law firm. Arbitration-as-a-Service.
- the_watcher 8y agoIn this case (as well as many potentially similar ones), I'm pretty glad this is happening. That said, are there no SLAAP protections in arbitration cases? As I alluded to earlier, I imagine Uber has enough reasonable cases for arbitration that SLAAP-like laws wouldn't protect them, but I can imagine other situations where a company could be bombarded with frivolous arbitration claims. I think I'm sympathetic to the idea that if you insert a binding arbitration clause, you've chosen to forgo protections like SLAAP. However, say you didn't insert a binding arbitration clause, but didn't expressly forbid it and offer it as an option. Couldn't a coordinated campaign cost a company huge sums of money, as the company bears most of the arbitration costs? Again, I don't think this is happening in this situation, and I can't say I've heard of it happening, but it's something that came to mind.