Does ordering an Uber ride create a legally enforceable contract? And, if so, what is your recourse if Uber leaves you stranded?

It is late at night. You are waiting for the Uber that you ordered 20 minutes ago. You are outside of a restaurant in a remote area. The restaurant is now closed. It is cold. You have four per cent power on the battery left in your cell phone. One minute before the Uber is to arrive, the driver cancels without calling you to say why. How rude. You try to order another Uber, but the app says that there are no cars available. Out of the blue, a cab appears in the distance, so you start running to hail it and, in the process, fall and injure your knee. You are in pain and very angry.  If Uber had come as promised, you would not have injured your knee.  What is your legal recourse if any? Can you sue Uber for your injured knee? We thought it worth looking into the question.

A legally enforceable contract has three elements: offer, acceptance, and consideration (money or something of value). In the case of an Uber ride, Uber offers the ride, you accept, and you pay for the ride up front, so a contract is created. The issue is whether you can take legal action against Uber for “damages” you sustain when Uber breaches its agreement with you and does not show up.

When you sign up for the Uber app (or any other ride-hailing app) you are agreeing to Uber’s terms and conditions. Since you agree to those terms and conditions by clicking on the link, as a general rule, you will be bound by them.

Of course, we generally don’t study the terms and conditions of those services we decide to use. And, to a great extent, that is what companies that offer these types of services count on. But, as those terms and conditions become a part of our contractual relationship with a company such as Uber, their impact on our safety and the quality of the service are important.

For instance, Uber’s terms and conditions state that Uber does not guarantee the quality, suitability, safety, or ability of its drivers. Instead, Uber states that the entire risk arising out of the passenger’s use of Uber services, and any service or good therewith, remains solely with the user. Doesn’t that give you great comfort?  So, you can forget about being compensated for the knee injury.

In addition to absolving themselves of liability through their terms and conditions, another defense that ride-hailing companies use when confronted with passengers that have been injured or suffered some other type of damage is that the drivers are not actually employees of the company but are, rather, independent contractors for whom the company has no responsibility or liability. An independent contractor, unlike an employee, is not controlled by the company and, therefore, the company takes no responsibility for what the independent contractor does or does not do. Although an appellate court in upstate New York held that, for purposes of unemployment compensation, an Uber driver should be considered an employee, that decision is not binding on any other jurisdiction except one covered by that appellate court. Until other courts or state legislatures have addressed this issue, we should consider ride-hailing drivers as independent contractors for legal purposes.

The lesson we learn from this is that we can be bound by terms and conditions when signing up for anything online, even if we don’t read them.

Although we should assume the worst when it comes to our relationships with ride-hailing companies, courts in some states are taking a look at the relationships between those companies and their users.

For instance, the Massachusetts Supreme Court ruled earlier this year that an Uber passenger did not enter into a binding contract with Uber by downloading the Uber app (which states that the passenger is accepting the Uber terms and conditions). That case dealt with Uber trying to enforce a term requiring arbitration (rather than allowing a lawsuit to be filed in court) of a claim brought by a disabled passenger. The court held that the just clicking on the app did not provide reasonable notice of the terms and conditions and did not “obtain a clear manifestation of assent” to the terms and conditions.

But, until other courts have addressed this issue, we can assume that we are at the mercy of whatever ride-hailing company we are using to get around.

For further information contact us.