Arbitration clauses repeatedly criticized by federal judges

Multiple judges criticized Uber’s requirement that passengers and drivers resolve disputes only in arbitration, foregoing lawsuits, group lawsuits such as class actions, trial by jury, and other standard legal protections.

In Meyer v. Uber, Judge Rakoff remarked that Uber’s arbitration requirement is “by no means prominently displayed on Uber’s registration screen” and that the presentation of the requirement is “obscure” and “inconspicuous” (2016 WL 4073012 at *8).

In Mohamed v. Uber, Judge Chen repeatedly criticized Uber’s arbitration requirement, finding it “both procedurally and substantively unconscionable, and therefore unenforceable as a matter of California law.” Among other concerns, Chen noted that the arbitration clause required drivers to pay half the cost of arbitration, that confidentiality clauses disproportionately benefited Uber, that a carve-out for intellectual property claims solely benefited Uber, and that Uber retained a right of unilateral modification.  Chen later reviewed Uber’s proposed revision, found it unsatisfactory, and insisted on further revisions.  Chen also criticized Uber’s communication with drivers about the arbitration clause under litigation, without court approval.