7 min read

    7 min read

    Recently, drivers received another update to the Uber Terms of Service (TOS) agreement. Senior RSG Contributor Sergio Avedian decided to read all 27 pages of it, and in this comprehensive article he will explain what it means when you sign this agreement.

    Like many others, I tried to go online to drive with Uber last week and was greeted with a pop-up notification about a new Terms of Service (TOS) agreement. As with previous updates, we were asked to read it carefully and electronically sign it if we want to continue to use the app and earn a living. Most drivers probably instantly signed it without reading, since I’m sure they wanted to go online and make money, but I decided to dig deep and read all 27 pages of it, partially because I wanted to and most importantly because we need to know what we are agreeing to as drivers!

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    This new Terms of Service (TOS) agreement is part of the new ‘gig economy’ where updates are pushed on to independent contractors and you have to sign them in order to work. They are complicated agreements, full of unclear legal language that many people don’t stop to read. It’s interesting, too, how Uber pushed this out right before a big US holiday (Thanksgiving), knowing that many drivers would be too interested in getting on the road and making those lucrative airport runs to stop, read all 27 pages, and make an informed decision.

    I was faced with this screen (first image) when I turned my app on, then I clicked on “There’s a new update for your review” link (middle image) and read it. Finally, once I was finished, I was prompted to click on “YES, I AGREE” (image above) and was allowed to go online and accept ride requests. However, I did not pull the trigger as fast as some other drivers, I actually took the time and read all 27 pages of it and took multiple screenshots!

    How to Opt Out of Uber Arbitration

    I reluctantly signed the update in order to keep driving, but as I had done with previous updates, I made sure that I was given the choice to opt out of arbitration without retaliation on Uber’s part. The TOS clearly specifies that you have 30 days from the date you sign the agreement to opt out of mandatory arbitration. If you just sign the updated TOS and don’t opt out within the allotted 30 days from the day you agreed to it, you will be forced to go to mandatory arbitration for future disputes and will lose your right to be a part of a class action lawsuit.

    I used the Rideshare Drivers United (RDU) Uber arbitration language to opt out, it is very simple to fill out the preconfigured form and email it to [email protected].

    If you decide to opt out using the RDU form, this is what you’ll see:

    Fill out the necessary boxes with your current information above and you’ll be presented with the following screens.

    Once you complete the required information, the app will prepare an opt out email to be sent from your default email address. Make sure this email address is the same as your Uber driver account. This is the actual email I sent to [email protected] and what I received from Uber as confirmation.

    Should You Opt Out of Arbitration?

    The following screenshots below represent excerpts from the updated agreement that pertains to arbitration and opting out of it. If you just sign the updated TOS and don’t opt out within the allotted 30 day limit, you will be forced to go to mandatory arbitration for future disputes and will lose your right to be a part of a class action lawsuit.

    I personally have opted out of the past agreements and, per Uber, they will not retaliate by deactivating a driver for doing so. I am still around, so there must be some validity to that argument.

    The following tweets may shed some light on the issue of arbitration by Harry and others. I hope he can have Veena Dubal as a guest on the Rideshare Guy podcast soon. She is widely regarded as the top legal expert on the gig economy.

    According to Uber, you won’t be penalized for opting out of arbitration:

    Why Should We Care About Arbitration from a Driver’s Perspective?

    Mandatory arbitration contracts from other gig-economy companies, like DoorDash, Instacart and the like, may be on shaky ground thanks to a combination of recent rulings.  The U.S. Supreme Court ruled this year that contractors as well as employees can be covered by an exemption for transportation workers in the federal law that requires the enforcement of arbitration pacts. At least one federal appeals court has ruled that drivers transporting passengers or delivering goods qualify for that exemption, as long as they’re involved in interstate commerce.

    Whether drivers can avoid being forced into arbitration, though, may depend on whether courts decide dropping off passengers at the airport or delivering meals from local restaurants count as being engaged in interstate commerce—a question very much up in the air.

    Driver classification lawsuits are hardly Uber’s only legal problem. In 2015, Uber was hit with 50 U.S. lawsuits—far more than any other so-called “Unicorn” start-up. The lawsuits challenge Uber’s business practices and could change the way it operates moving forward. You can check out the lawsuits settled by Uber via this link.

    Uber’s employment litigation strategy has shown how powerful arbitration agreements can be in the gig economy. The fight over the classification of ride-sharing drivers as independent contractors appears to be over after Uber announced that it settled a pair of lawsuits for $20 million. The initial case, O’Connor v. Uber, was first brought by a group of Uber drivers in 2013 who argued they should be categorized as employees rather than independent contractors. By classifying drivers as contractors, Uber avoids providing benefits of traditional employment such as health insurance, paid sick time, and workers’ compensation, the drivers argued.

    O’Connor v. Uber has been winding its way through the courts for over six years. It was almost settled in 2016, when Uber agreed to pay as much as $100 million to the roughly 385,000 drivers represented in the class action lawsuit and one other case, so long as it could continue to classify them as independent contractors. But the settlement was later rejected by a federal judge, who argued that the amount was insufficient. The US Supreme Court issued a ruling bolstering the power of employers to force workers to use individual arbitration instead of class action lawsuits.

    Last year, the Ninth US Circuit Court of Appeals reversed O’Connor v. Uber’s class certification status, nullifying the decision on the ground that Uber’s arbitration clause prohibits class actions. The appeals court ruling ultimately reduced the size of the class to about 13,600 drivers who will participate in the settlement.

    Shannon Liss-Riordan, an attorney representing Uber drivers in the case, said she was “pleased” with the settlement. Under the agreement, drivers will receive approximately 37 cents per mile for the miles they have driven for Uber, she said. Also, Uber agrees to better explain its deactivation policy to drivers, create a deactivation appeals process, and help drivers who were deactivated get back on the platform. Drivers who were removed from the lawsuit by the appeals court ruling would need to pursue their claims in individual arbitration if they want any relief.

    Are you interested in learning more about the arbitration process, particularly for your state? Sign up to get notified here!

    What will you do? Will you opt out? Is arbitration worth your time and money? Have you opted out of previous agreements or updates?

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    -Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.

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