Uber Unfair? You Decide

By Ozlem Susler

The world phenomenon that has made transport so much easier has simultaneously been viewed as a threat to the taxi industry worldwide and among other things, a clarion call for the taxi sector to clean up their act. Uber announced its amended Terms and Conditions in late 2015, the day after the ‘race that stops the nation’ (aka the ‘Melbourne Cup’) – Strategic timing to usher in an onerous arbitration clause which places Uber drivers at substantial disadvantage.

Pursuant to Article 6 under Uber’s publicly available Terms & Conditions for Australian drivers, there is a cascading dispute resolution clause, which provides for mandatory mediation in accordance with the International Chamber of Commerce Mediation Rules (“ICC Mediation Rules”). In the event that after 60 days following submission of the dispute to mediation, the dispute remains unresolved, then arbitration by a sole arbitrator governed by the Rules of Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”) shall follow. The place of both mediation and arbitration shall be Amsterdam, The Netherlands. The place of arbitration is highly problematic from a contractor point of view. It imposes a unilateral term on the contractor to arbitrate in Amsterdam, under Dutch laws.

There are two provisions in particular, subsumed in the arbitration clause of the Uber Terms and Conditions. Uber claims that the rights granted by these two provisions, will not be prejudiced by the claim to mediation or arbitration.

The first one is Article (18) under the EU Regulation No. 1215/2012 of the European Parliament and the Council of 12/12/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters states that: ‘in relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.’ This is a Regulation which is expected to apply to Uber drivers as contractors, who are subject to mediation. Whether that will be the case remains to be seen.

Since the contract between Uber and the driver is closest to one of an employer/contractor relationship, Article 18 would be expected to protect the contractor in this case. There is a conflict here in that, the Australian Uber driver who is to mediate or arbitrate under the provisions of Uber, will by default, be disadvantaged by being compelled to attend a dispute resolution proceeding in Amsterdam. The protection afforded under Article 18 seems to offer insufficient protection to the less powerful party. The financial detriment to a contractor to participate in such a dispute resolution process is potentially enormous. The costs could easily blow out for a contractor which would include fees incurred for legal representation in the mediation and/or arbitration in the Dutch jurisdiction, travel costs and accommodation fees.

Further, under Clause 6 of the Uber contract, it clearly states that the governing law of any dispute arising between Uber and an Australian driver is Dutch law. This would require an Uber driver to pay for legal advice under Dutch law, which arguably most Uber drivers in Australia would not have any familiarity with, nor arguably could afford.

What makes matters worse is that given Dutch Law governs the contract, Uber Drivers cannot use any of the protection provided by the Independent Contractors Act 2006 (Cth) either. This places drivers in a particularly vulnerable situation if a dispute arises between the parties. It begs the question, if drivers fully understood the implications, would they still be signing up?

 

La Trobe