Uber faces pressure to drop forced arbitration policy following reports of sexual assault

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Agreeing to Uber’s 'Terms of Service' means signing away your right to sue the company in open court

The way Uber frames it, arbitration is simply the most “appropriate” venue for settling investigations into sexual assault.

Two women last year who say they were sexually assaulted by their drivers filed a lawsuit alleging that Uber failed to protect passengers from predatory drivers. Seven more women have since joined the suit and say in their complaint that Uber needs to strengthen its screening process.

But Uber has tried to toss the case on the grounds that all consumers who sign up for its service agree to settle disputes by arbitration when they agree to the company’s “Terms of Service.”

In a statement to Bloomberg News in March, an Uber spokesman claimed that arbitration would be a better venue for the woman’s sexual assault claims.

“Arbitration is the appropriate venue for this case because it allows the plaintiffs to publicly speak out as much as they want and have control over their individual privacy at the same time,” Uber said at the time;

Arbitration policies

Uber now appears to be rethinking its stance as the women, a former employee, and lawmakers are publicly pressuring the company to drop its forced arbitration policy.

Forced arbitration clauses, common in many industries, require consumers, employees, and others to settle all claims against a corporation with a private arbitrator at the corporation's expense.

Companies say this policy prevents frivolous lawsuits, but consumer advocates say such policies leave consumers and workers at the mercy of an arbitrator who receives a paycheck from the same corporation that consumers are trying to fight.  

Arbitration proceedings are private, which prevents the public from learning the details of a case as they would be able to if it was filed in open court. In Uber’s case, employees and drivers can opt out of forced arbitration, but riders cannot.

Lacking transparency and safety

Many riders may not realize that agreeing to Uber’s “Terms of Service” when they sign up means that they are agreeing to a clause in the fine print that says all claims must be settled by forced arbitration. .

With the attempt to file a class action suit against Uber stalling, the women behind the suit last week published an open letter addressed to the company.

“Secret arbitration is the opposite of transparency,” the women wrote. “Forcing female riders, as a condition of using Uber's app, to pursue claims of sexual assault and rape in secret arbitration proceedings does not ‘make streets safer.’ In fact, it does the opposite.”

Citing the non-disclosure agreements that have helped keep sexual assault claims against powerful men secret for decades, the women add that “since the dawn of the #MeToo movement, companies and legislatures across the country have recognized that forcing women into confidential arbitration proceedings is both tremendously harmful and contrary to all notions of justice.”

A recent investigation conducted by CNN found that 103 Uber drivers have been accused of forcible touching, kidnapping, rape or other forms of sexual assault or abuse in the past four years.

Uber has recently introduced new safety features to better protect passengers and drivers, but it did not include lifting the forced arbitration clauses as one such feature.

Mounting pressure

The company may be getting more receptive to the idea of allowing customers to sue. On March 30, ex-Uber engineer and whistleblower Susan Flower questioned CEO Dara Khosrowshahi about the arbitration clauses, pointing out on Twitter that one of Uber’s mottos is to “do the right thing,” yet “Uber is pushing women who were sexually assaulted by their Uber drivers into arbitration, taking away their constitutional right to justice in the court system.”

She challenged Khosrowshahi to waive forced arbitration clauses for all consumers. He responded that he would “take a look at your suggestion - I will take it seriously but we have to take all of our constituents into consideration. “

On Wednesday, Sen. Richard Blumenthal, a Democrat from Connecticut, joined the chorus of people telling Uber to drop its forced arbitration policy in the wake of the CNN report.  

“When these agreements are inserted into the fine print of large corporations’ terms of service – as is the case with Uber – consumers lack a meaningful opportunity to understand and object before they give away their right to access the justice system,” he wrote.

Consumer groups have previously voiced concerns that forced arbitration clauses may make their way into the self-driving cars being tested by Uber and competitors. A bill currently championed by the tech and car industry, which would quickly expand self-driving car testing, may allow companies to require forced arbitration should their technology fail on car owners, car safety groups warn.

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