Uber Terms of Use: What’s the Big Deal?

Almost every cell phone app in the known universe, including Lyft, Uber, and other ridesharing apps, include Terms of Service. Frequently, users scroll to the bottom and tap the “I accept” button without reading the ToS, which is usually a long document that contains a mind-boggling amount of Legalese. The ToS (a/k/a Terms and Conditions or Terms of Use) usually includes a mandatory arbitration clause.

Some ridesharing platforms use indirect TOS acceptance mechanisms. Passengers accept the TOS, which usually include mandatory arbitration, when they order rides or get into vehicles. Indirect acceptance is even more controversial than direct acceptance. At least direct acceptance ToS acceptance gives users a chance to say yes or no. However, in many cases, this “choice” is just smoke and mirrors. More on that below.

On the road to fair compensation, a Monmouth County personal injury lawyer must often overcome obstacles like unfavorable ToS provisions, waivers, and other such doctrines. When such hurdles pop up, many lawyers look for a quick settlement or an easy way out. Good Morris County personal injury lawyers never settle cases too soon or drag their feet unnecessarily long. As a result, victims obtain maximum compensation without undue delay.

Trials vs. Arbitration

Large companies, like Uber, strongly prefer arbitration to trials as dispute resolution methods. Upon comparing the two, it’s easy to see why.

Privacy, or the lack thereof, may be the biggest difference between trials and arbitration. Usually, professional stenographers diligently record every word spoken in a courtroom or at a deposition. Furthermore, all motions and other court documents are public records. Arbitration proceedings are closed to the public and no stenographers are present. The documents filed in the case are under seal as well.

So, no one knows if the company’s policy in a given area is fair or unfair, and no one knows if the arbitrator was fair or unfair.

Bias is a concern in some cases. The people elect most judges in state courts, and tax dollars pay judicial salaries. Arbitration companies randomly assign arbitrators to certain cases. These companies, which are funded in large part by Uber and other entities that use these services, pay the arbitrators.

So, in many cases, an arbitrator in a dispute between a passenger and an Uber driver is not technically an Uber employee, but s/he might as well be an Uber employee.

The neutrality of the forum is an issue as well, especially if the victim’s North Jersey personal injury lawyer is inexperienced. Many Uber lawyers handle arbitration hearings on a regular basis, but for many lawyers, the process is uncharted territory. Additionally, arbitration rules of procedure often vary significantly from the rules of civil procedure that courts use.

Despite its drawbacks, to be fair, in many cases, an arbitration hearing is a much better dispute resolution system than a court trial. 90 percent of the world’s jury trials occur in the United States. In other parts of the world where Uber operates, the justice systems are unreliable, at best.

Years ago, we had a colleague who was a criminal defense lawyer in Central Jersey. One of his clients was from an Asian country. In that client’s home country, criminal justice was like ordering lunch at a fast-food restaurant.

For example, at Burger King, a Double Whopper costs X dollars, a Whopper is Y (less money), and a Whopper Junior is Z (even less). Customers with no money get no food. In many criminal courts throughout the world (most of them in fact), the judge dismisses the case if the defendant pays a bribe of X amount, a sentence of probation costs Y, and a short prison sentence costs Z. Defendants without money serve long prison sentences.

The Crash Heard Round the World

A 2022 crash put a bright spotlight on Uber’s mandatory arbitration policy. John and Georgia McGinty got in an Uber on March 31. Their driver ran a red light and hit another car. The McGintys suffered serious injuries. Georgia McGinty was unable to work for one year. John McGinty suffered broken bones and, as of 2024, still suffered from diminished use and sensation in his left wrist. They sued the driver and Uber.

At the time, Uber’s ToS in New Jersey included a conspicuous arbitration clause. Would-be passengers cannot use the app unless they agree to the ToS in full.

The victims claimed they didn’t voluntarily agree to the ToS. According to court documents, their twelve-year-old daughter agreed to Uber’s ToS, including mandatory arbitration, when she ordered take-out on her mother’s account. 

Other courts had rejected motions to compel arbitration in similar disputes at a Disney theme park and an Airbnb rental. But a New Jersey court granted Uber’s motion, transferred the case to arbitration, and closed the proceedings.

Contracts of Adhesion

As illustrated in these cases, a South Jersey personal injury lawyer typically fights to keep injury cases in courts and out of arbitration. The legal definition of a contract of adhesion, which could include a ToS, usually gives lawyers the leverage they need to keep cases out of arbitration, or even better, settle them before judges move them.

Basically, a contract of adhesion is a take-it-or-leave-it “contract.” We put “contract” in quotation marks because a contract of adhesion is not a legal and enforceable contract. One of the elements of a contract is a meeting of the minds. The parties must agree on the same terms at the same time, a process which requires some face to face negotiation.

The provisions in a contract of adhesion, or a ToS, are non-negotiable. Furthermore, an Uber ToS is faceless. If a passenger wanted to dispute the ToS, the document contains no contact information and does not identify a responsible party.

This discussion is irrelevant in many cases. Many contracts of adhesion are void as agreements which are against public policy. The per se void rule usually applies if a person has already paid for a service.

Many gym liability waivers violate the per se rule. After people pay membership fees, they must sign liability waivers, or they cannot use the service they paid for. Such an outcome violates various state and federal laws. Other contracts of adhesion, such as school field trip permission forms, are in a grey area.

Practical considerations come into play as well. Uber lawyers often charge by the hour, and in many cases, they charge more than $2,000 an hour. In these cases, it’s cheaper for the company to settle the matter than fight over the arbitration clause in court.

Reach Out to a Thorough Bergen County Lawyer

Injury victims are entitled to significant compensation. For a free consultation with an experienced personal injury lawyer in Newark, contact CourtLaw. We do not charge upfront legal fees in these matters.