Mobile Commerce

Uber Legal Battle Hinges On Technicality

In the midst of a series of legal battles, ride-hailing giant Uber Technologies may find its fate determined by a “legal technicality,” The Wall Street Journal reported Thursday (Oct. 29).

The two court cases, as has been extensively reported, delve into the way the company classifies and pays the 300,000 drivers across the globe that ferry its customers from point to point.

In reference to the agreement that all Uber drivers are bound to before they ever put foot to the pedal in service of the company, there’s the clause that binds disputes to arbitration rather than class action suits targeting the company. WSJ noted that there is now controversy as to whether arbitration is, in fact, allowable, and a couple of court decisions indeed question the validity of that tactic.

A loss in the legal arena would mean that Uber could have to change the very way it classifies and compensates its drivers, which would mark a shift away from the independent contractor model that has pushed profits with strong momentum. Specifically, in California, Uber has appealed the verdict in Gillette v. Uber, in which the arbitration policy was deemed unenforceable, allowing the drivers to continue to push the legal battle forward. In the second case, O’Connor v. Uber, the plaintiffs had opted out of the arbitration policy and now are allowed to proceed with class action. Both the Uber appeals in those cases are being reviewed.

[bctt tweet=” A loss in the legal arena would mean that Uber could have to change the very way it classifies and compensates its drivers.”]

As WSJ noted, the key issues over arbitration center on whether disputes get resolved quickly and fairly (as corporations contend) or if they keep less savory business practices clandestine. The judge in the cases mentioned above noted that Uber drivers generally do not know what they are signing on for when they sign their agreements, with “undue burden” in place for those who want to opt out, and the agreements are so unfair that they are unenforceable.

Though no dates have been set yet for oral arguments, the key issues center on whether the suits should be the purview of the court or whether they should be qualified as class actions.

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