
Drivers claim Uber won’t pay fees to launch forced arbitration cases - SilasX
https://www.reuters.com/article/legal-us-otc-uber/forced-into-arbitration-12500-drivers-claim-uber-wont-pay-fees-to-launch-cases-idUSKBN1O52C6
======
Animats
Refusal to proceed with arbitration has been a problem.[1] Surprisingly,
there's still litigation over whether this voids the arbitration clause. At
the appellate level, several courts have ruled that it does.[2]

The 9th Circuit dealt with this in another case.[3] _" On the assumption that
Brown's narrative is true, this case displays a dark side of our nation's
policy in favor of arbitration. When a defendant in a judicial forum refuses
to respond to a complaint that is properly filed and served, the court has the
power to enter and enforce a default judgment. Arbitration works differently.
The American Arbitration Association could not compel Dillard's to pay its
share of the filing fee, and in the absence of the fee it could not proceed.
Brown had no choice but to come to court. Many people in Brown's position
would simply have given up. Because she did not, we have the occasion to make
clear that when an employer enters into an agreement requiring its employees
to arbitrate, it must participate in the process or lose its right to
arbitrate."_

[1] [https://www.bdlfirm.com/arbitration-the-consequences-of-a-
pa...](https://www.bdlfirm.com/arbitration-the-consequences-of-a-partys-
refusal-to-cooperate/)

[2] [https://www.arbitrationnation.com/tag/roach-v-bm-
motoring/](https://www.arbitrationnation.com/tag/roach-v-bm-motoring/)

[3] [https://caselaw.findlaw.com/us-9th-
circuit/1105777.html](https://caselaw.findlaw.com/us-9th-circuit/1105777.html)

~~~
anxman
I would love to see it void forced arbitration.

~~~
Animats
That's up to Congress. Federal Arbitration Act.

------
thebluehawk
So they require you to do forced arbitration, then just refuse to act on it
(or act very slowly).

From a business stand point, of course they would. Most of these cases will at
best require time and money to sort out, and at worse cost them even more
money (compensating a driver for damages or lost wages). So why wouldn't they
let these get tied up in bureaucracy until the drivers decide it's not worth
the effort?

Force arbitration is bullshit and anti-consumer.

~~~
burtonator
I just bought a car and at the VERY last moment they brought up forced
arbitration...

~~~
reaperducer
Which brand? I will be in the market for a new car soon, and avoiding that
brand will speed the decision-making process.

~~~
jopsen
Of all the competitive parameters this is one you think it's worth
considering?

Voting with your wallet works if a majority of people understand the issue and
vote the same way. Here you're just creating problems for yourself.

Not that the enthusiasm isn't good :)

~~~
reaperducer
_Of all the competitive parameters this is one you think it 's worth
considering?_

No, but it’s one parameter worth considering. I never stated that it was the
only deciding factor.

Life is not binary.

------
mikeash
Forced arbitration is a violation of human rights. Access to the courts should
always be available. These clauses should join “sell yourself into slavery” as
examples of obvious things you can’t do in a contract.

~~~
pathseeker
>Forced arbitration is a violation of human rights.

What about two parties choosing arbitration as a clause in the contract they
enter into together?

~~~
crooked-v
It's a failure of society to presume that a huge corporation and a single
employee can have a true meeting of the minds for complicated contracts.

~~~
nraynaud
I think that's how consumer protection should work: company extends shady
contract, regulator says nope to the entire industry.

For example you should be able to get out of a contract with the same ease as
you got in.

(also I am still a bit baffled, it took one hour to sign my contract at my gym
and 1h30 at the bank to open an account, this symmetry principle might not
play in my favor in the US).

------
Someone1234
Forced arbitration being lawful is one thing, but the employer both being able
to force arbitration AND pick the arbitrator who is on their payroll should be
illegal.

In effect you've taken a process out of an independent court and put it with a
private business which is being paid by one of the parties. Seems super
sketchy even to the point of criminality.

~~~
derekp7
At the minimum, the arbitrator should be licensed and certified by the court.
Further, the plaintiff should be able to sue the arbitrator if they failed to
act in good faith (i.e., if the arbitrator was sleeping during the deposition,
or clearly rendered a decision not supported by the evidence).

~~~
lalaithion
>Further, the plaintiff should be able to sue the arbitrator if they failed to
act in good faith

They can. 9 U.S. Code § 10:

(a) In any of the following cases the United States court in and for the
district wherein the award was made may make an order vacating the award upon
the application of any party to the arbitration— (1) where the award was
procured by corruption, fraud, or undue means; (2) where there was evident
partiality or corruption in the arbitrators, or either of them; (3) where the
arbitrators were guilty of misconduct in refusing to postpone the hearing,
upon sufficient cause shown, or in refusing to hear evidence pertinent and
material to the controversy; or of any other misbehavior by which the rights
of any party have been prejudiced; or (4) where the arbitrators exceeded their
powers, or so imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made.

~~~
riskable
Arbitors often _have no assets_. You'll be dealing with "Arbitration
Corporation 12S". Which will conveniently cease business the moment anyone
files suit.

~~~
testvox
That quote clearly says that you sue to vacate the award, not force the
arbitor to pay you it back.

------
grellas
When a lot of money is at stake, it is no surprise that litigants abuse the
legal system.

Uber is contractually required to pay the up-front arbitration fees so that
the JAMS arbitrations can move forward. I super-slow-walks the process. What
is the remedy?

Well, JAMS itself does not really have a remedy. It is a private organization
that moves forward with the arbitration process as its rules are complied with
and as it gets paid.

Nor is there an obvious remedy in the courts for individual failings in this
or that arbitration procedure. Courts normally are not even involved in such
processes.

Only when a clear pattern emerges (as it now has) can a court intervene to
remedy a problem such as this.

In the meantime, what has happened? A lot of time has passed. A lot of the
claimants (I am sure) have become discouraged and have possibly lost their
motivation to move forward with their claims. And Uber has moved well along
the path toward ultimate success in winning it all in its market, currently
resting on a valuation of $120B.

Is any of this defensible? No. Will Uber try to defend it? Yes, through
double-talk and prevarication. Will it be doing so in good faith? Not at all.
Will the aggrieved drivers be able to overcome it? Perhaps, but they will
likely get too little, too late. And, for Uber, it will be a historic
liability that vanishes into the ether as it looks backwards on eventually
settling the claims while basking in its massive success.

In a just world, things like this should not happen and perhaps Uber will be
upended by something or other along the way anyway. But this sort of cynical
abuse of legal processes in neither rare nor the exception in cases where
modern litigants have the means and opportunity to gain massively from the
abuses. It is not the exception but the rule.

And this in turn illustrates the obvious limits of using law as a solution for
society's problems. The law can and does help solve problems to a point. But
it is always subject to abuse and, in the end, money, power, and corrupt
motives often work to undercut its effectiveness. This sort of case is Exhibit
A to prove the point.

~~~
crooked-v
> And this in turn illustrates the obvious limits of using law as a solution
> for society's problems.

This problem is a result of people being prevented from using the normal legal
process to handle their disputes. "The limits of the law" only applies here so
far the Supreme Court has ever-expansively applied the Federal Arbitration Act
to override the laws of the states.

------
anth_anm
Allowing people to "sign" away their 7th amendment rights, in some cases in
order to simply maintain already paid for services, is ridiculous. Arbitration
should be between equal parties (i.e. businesses, you and your neighbor) or
you should only agree to it with advice from a lawyer.

These clauses are just more corporate abuse.

------
dannykwells
What rube at the 9th circuit fell for the 'ol "of course we'll act in good
faith" argument??

In the long run I think this kind of practice will only hurt Uber - they have
huge issues with driver retention any way, and their dream of self driving
cars is laughable. Lyft (who's only a little better, but still better) will
continue to gain ground in the US especially and will eventually become the
market leader in mobility.

~~~
derekp7
They both have to worry about customers though. I'm afraid to take either Uber
or Lyft, due to the fact my credit card may be randomly charged a $250 or more
"damage fee". It is ridiculous that they just take the driver's word for it
without something like dashcam evidence as proof.

~~~
deminature
It's extremely uncommon to receive a damage fee, has to be substantiated with
a photo and you can dispute it. Avoiding rideshare because of it is like
refusing to go outside because you might be struck by lightning.

------
viscanti
I'm conflicted about this. I think forced arbitration is a terrible predatory
practice. But I also think there are lots of frivolous class action lawsuits.
All the claims cited here were from a single class action lawsuit that was
thrown out.

I'm all for Uber drivers making more money but they filed a class action
lawsuit asking for a different compensation structure than what was offered.
They knew the deal when they signed up and it seems like a sketchy attorney
took on their case for a big pay day and when that was thrown out they're now
taking this next step. If I sign an agreement with an employer about my
compensation, I don't have a realistic expectation that I'd be able to sue
them when they continue to do what they told me they'd do and I'm no longer
happy with it (my recourse is to walk away and work somewhere that better
matches what I'm looking for).

Frivolous lawsuits drive up the cost for customers almost everywhere. It's a
big reason why medical costs are so high. People see a big organization that
has some cash and they think they can file a suit as a way to quick riches.

~~~
mikeash
According to this article, malpractice costs (including the cost of defensive
medicine done due to the fear of lawsuits) accounts for 2.4% of health care
spending: [https://www.forbes.com/sites/rickungar/2010/09/07/the-
true-c...](https://www.forbes.com/sites/rickungar/2010/09/07/the-true-cost-of-
medical-malpractice-it-may-surprise-you/#78683f6a2ff5)

That’s a decent amount of money but I wouldn’t call it a big reason. One of
the problems with bringing health care costs down is that there aren’t any big
reasons for it, just lots and lots of little ones.

~~~
Eliezer
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3048809/)
That was a shockingly low figure relative to what I’ve heard from friends in
medicine. Looking up the original paper showed that the estimators used for
that figure were very sketchy, and the authors of the paper did not claim
otherwise. They were simply grasping for any estimator they could.

~~~
Retric
People in Medicine overestimate these costs as they represent a much smaller
fraction of total Medicine costs than they assume.

EX: Their are 1.1 million doctors assuming 250k average salary it adds up
around 275 billion ish which seems huge, except that’s out of 2.2 trillion in
US heathcare spending. So, that’s only adds up to around 10 percent of total
spending. And malpractice insurance is well below what a doctor makes on
average.

Pills, buildings, janitors, machines, etc all add up.

~~~
woolvalley
Well if your a doctor, %2/%10 is %20 of revenue for the doctor, which feels
large. AFAIK it's doctors or their hospital that pays for malpractice
insurance, so it come out of their pocket directly.

They probably have stories of malpractice insurance not working that well,
creating ruin for the doctors because of a relatively uncommon event, much
like patients using the medical system.

------
projektfu
The author followed up with another post, "Uber Tells its Side of the Story in
Mass Arbitration Fight with 12,500 drivers":
[https://www.reuters.com/article/legal-us-otc-uber/uber-
tells...](https://www.reuters.com/article/legal-us-otc-uber/uber-tells-its-
side-of-the-story-in-mass-arbitration-fight-with-12500-drivers-idUSKCN1PA2PD)

------
mnm1
So the law allows the perpetrator of a tort to be judge, jury, and executioner
over its victims and then further allows that same perpetrator to lie to a
federal court without repercussions and not even carry out the arbitration it
promised. Finally, it gives the victims no further recourse against the
perpetrator. And this is supposed to be just? The law has a loophole
essentially saying that it doesn't need to apply if both parties agree.
Absolute insanity really. What's the point of even having a civil court system
then? Imagine if they did this with criminal cases. The insanity of the
current system does not preclude that. What a failure of government to do one
of its basic duties.

------
plink
Uber must hold the world record for the slowest inevitable capsizing of a
corporate ship ever.

------
pseingatl
How can anyone think that the court system is a panacea for dispute
resolution? Or even that it is a better alternative? The courts are the
emergency rooms of dispute resolution: on the civil side clogged with
foreclosure cases, personal injury slip and falls, divorce protection orders
and absent judges who are sitting on the criminal side because the criminal
courts are drug courts. Federal courts have limited jurisdiction and criminal
cases get priority. Except for bankruptcy, there is no civil side. Would you
rather sit in an emergency room or see your own doctor? That is how
arbitration is supposed to work. The friction point is the payment of fees.
And there is no reason why the disputes of a class of people could not be
submitted to arbitration. A lawyerless individual is much better off
navigating an arbitration by himself than trying to navigate an American
courtroom. Of course, if you don't want concierge justice, you are free to
stand in line with everyone else. Understand though, that concierge justice
comes at a price. The idiots at Uber simply don't want to pay the price.

~~~
anoncake
If arbitration were better for customers, it wouldn't have to be forced upon
them.

~~~
pseingatl
In many contexts, it's not forced. Much of international commerce, for
example.

------
iabacu
Forced arbitration is broken, but not entirely useless.

The actual problem is vendor lock-in and the conflict of interest in those who
choose the vendor.

There should be a law that allows you to pick whichever arbitrator you want
(within limits, like picking court jurisdiction), rather than being forced
into a single vendor.

~~~
techsupporter
I argue that the actual problem is that mandatory, binding arbitration is
viewed as a contractual "choice" when it is not a choice if included in a
contract of adhesion (so-called take-it-or-leave-it contracts).

If a contract can be negotiated on an individual basis between the contracting
parties, fine, permit mandatory arbitration. However, mandatory arbitration
_should not_ be permitted otherwise because to do otherwise puts the lesser
party at a distinct disadvantage, especially when all market participants
include these clauses. For example, is it a "choice" about mandatory
arbitration when both of the Internet providers serving my address have
contracts of adhesion that include no-opt-out-clause mandatory arbitration? It
is not.

At the bare minimum, the law should state that contracts of adhesion must
include a 60-day opt-out clause for mandatory arbitration, with notice of
opting out being provided via some reasonable means (e.g. not via Telex to a
disused closet in Boca Raton). If arbitration is so great, let it stand on its
own legs without being imposed by one side of the contract.

~~~
anticensor
Do not say that to MPs. They would make arbitration a precondition of lawsuit
as they have done here in Turkey.

------
pseingatl
Here's an interesting scenario which obtained in one of the courts that the
arbitration refugees are dying to get into:

[https://www.houstonchronicle.com/news/houston-
texas/houston/...](https://www.houstonchronicle.com/news/houston-
texas/houston/article/Houston-federal-judge-bars-female-prosecutor-
from-13610959.php#photo-16110453)

------
joshuaheard
This is true with any arbitration. If you sue someone it costs about $500 to
get the case started in a government subsidized court. In private arbitration,
it costs about $1,500. The person initiating the case has to pay, not the
defendant. In this case, the drivers are initiating the cases so must pay the
initial filing fee.

~~~
briffle
that is not how the current contract is written, and if the drivers did have
to pay, then it would be assumed that they would get to pick the aribters to
be used.

~~~
joshuaheard
I haven't read the contract. Typically, an arbitration service can be named,
in this case JAMS, but who pays the filing fee is not in the contract, since
it's usually the one initiating the arbitration.

------
rchaud
Give employees no legal recourse in actual courts, then make sure their sole
remaining option doesn't get paid and doesn't start proceedings.

Let's say forced arbitration is acceptable (IMO, it's not). Why not make Uber
provide a guarantee that arbitration must begin no later than 60 days after
the claim is filed? Or would that be another example of the socialist
regulations that are ruining free enterprise in America?

~~~
zelon88
Seems reasonable to me. If you're going to require alternate forms of
litigation it's only fair that you put a time limit on it. Otherwise this
would certainly become quite a lucrative loophole for corporations to avoid
any and all responsibility.

~~~
rchaud
We're already headed down that route with the gig economy as a whole. The W2
is the first thing to go.

------
crb002
Meh. If they want to not perform on the arbitration clause, they get stuck
with going to court. Seems like a win for employees?

------
MilnerRoute
This story is from December.

------
thisisweirdok
I'm getting really sick of large corporations essentially moulding bureaucracy
to benefit themselves and fuck over everyone else.

I'm also seeing things like popup more frequently like _NET90_ payment
terms... or accounting departments that won't pay someone unless they fill out
a form 100% correctly (oh, and BTW if you fill out the form incorrectly
they'll sit on their hands and NOT notify you... so you basically only find
out via nagging).

If I owed my bank money you think I could sit around twiddling my thumbs
waiting for them to guess what the proper request format is?

I recently had a company tell me that they only accept invoices ONE DAY A
MONTH and there's nothing I can do about it. Uh, excuse me?

Forced arbitration is another wonderful example of course. Just sit around
basically in a siege knowing that almost no individual person can outlast you
(basically Uber's business model anyway, undercut the competition and put them
out of business with time).

~~~
riskable
You need to CALL OUT these businesses loudly and publicly. This whole, "I'm
not paying you for 90-120 days and then I notify you of a typo precisely 91
days later when you ask where the money is" needs to end.

So in that vein: Fuck GE Healthcare. They have NET120 and they will do all the
things you and I have described _and more_ in order to put off payment to
small businesses for as long as possible.

I didn't get a check from them until their stuff broke (had nothing to do with
my software but they _thought_ it did) and I refused to help them until I got
paid.

Whaddayaknow, I had a check overnighted to me with early morning delivery!

~~~
woolvalley
What happens when you offer a contract that says that net90 is %150 of costs,
net30 is %120, net14 is %100, etc and any late payment (typo bullshit or not)
has a %20 compound APR billed per month, like a credit card?

Basically a contract that would be fine if the corp doesn't play shenanigans,
and wouldn't if they do.

~~~
dmurray
The way I've heard works better is to pad the price in the first place, and
give "30% discount for prompt payment (net14)". The people making the
purchasing decision will use the discounted price, or perhaps they won't be
price sensitive at all. The AP people will spot that they can save the firm
30% by paying your invoices early.

