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June 23, 2017 Practice Points

Customer Is Bound by Uber Click Agreement

By Amanda J. Alasauskas

A court has held that the arbitration agreement in Uber’s click agreement is enforceable. Melissa Cubria v. Uber Technologies, Inc., Case No. A-16-CA-544-SS (W.D. Texas, Austin Div. 2017).

Defendant Uber, a popular ride-share service, connects riders who are seeking transportation with available drivers. Riders can request rides and pay through the Uber application on their smartphones. To use Uber, riders must create an account on the application through a process involving three steps: (1) the entry of information, such as the user’s email address and cell phone number; (2) the creation of a user profile; and (3) the entry of the user’s credit card information so payments can be processed. Plaintiff Cubria, coincidentally a law school graduate, followed the three steps and created her Uber profile, allowing her to request rides.

On the Uber screen, there is a prompt that tells users to enter their credit card information, and a clickable box featuring the words “By creating an Uber account, you agree to the Terms of Service & Privacy Policy” (the ‘Terms’).” Clicking this box enables a user to view the terms. The terms in effect when the plaintiff signed up for Uber in 2013 stated that they constituted a legal agreement between the parties and that the use of Uber would bind the user to any future amendments. In 2016, Uber issued new terms. Section 6, entitled “Dispute Resolution” contained a subsection called “Arbitration,” and stated that the user agrees that “any dispute, claim or controversy arising out of or relating to these Terms . . . will be settled by binding arbitration between you and Uber. . . .”

The plaintiff filed a putative class action against Uber, alleging a violation of the Telephone Consumer Protection Act, for robo-texting Uber riders in Austin, Texas, without the riders’ express consent. The plaintiff claimed that she received robo-text messages as part of Uber’s political campaign against the City of Austin’s ordinance requiring background checks for Uber drivers. Uber filed a motion to compel arbitration.

Uber argued that, under the 2016 amendment to their terms and conditions, the question of whether the parties must arbitrate their claims is for the arbitrator to decide. The plaintiff argued that she never agreed to arbitration, the arbitration agreement did not include a clear and unmistakable delegation of arbitral jurisdiction to the arbitrator, the dispute was outside the scope of the arbitration clause, and that the arbitration clause was unconscionable.

The court agreed with Uber, finding that the plaintiff agreed to the arbitration clause and that the clause expressed a clear and unmistakable intent to delegate questions of arbitrability to the arbitrator. The court also stated that because the delegation provision is severable from the remainder of the arbitration clause, any question about whether the clause is unconscionable should be decided by the arbitrator.

Amanda J. Alasauskas is a 2017 J.D. candidate at DePaul University College of Law in Chicago, Illinois.

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