The Uberization of Arbitration Clauses

In the early part of this decade, the Supreme Court’s decisions interpreting the Federal Arbitration Act (FAA) strictly enforced predispute arbitration clauses (PDAAs) with class action waivers and so-called “delegation” provisions in consumer contracts. Just after the Court’s 2013 ruling that clauses with class action waivers did not prevent claimants from vindicating their statutory rights, Uber— a company at the heart of the “gig economy”—started inserting PDAAs in agreements with its drivers and passengers. Uber’s move has generated dozens of challenges to its clause in lawsuits across the country, and thus dozens of federal court opinions contributing to modern FAA jurisprudence. This article will focus on those opinions, extracting lessons from the multitude and variety of challenges to Uber’s clause. This article concludes by noting that Uber’s rapid and worldwide development of a cheaper and more efficient yet controversial mode of transportation parallels the growth in companies’ use of “forced” arbitration clauses to facilitate a cheaper and more efficient yet controversial mode of resolving disputes