Mobile Design Flaw Puts Enforceability Of Arbitration At Risk

Users can’t consent to terms they don’t see

Metter v. Uber
Motion to compel arbitration denied – Uber allegedly charged fees for cancelling an Uber rider request, but failed to alert users of cancellation fees before making a request. Plaintiff further alleged that cancellation fee amounts are not disclosed until after billed. Uber argued cancellation fees are disclosed in its terms – agreed to at account sign-up – and moved to compel arbitration (based on arbitration provisions contained in the same terms).

The court found the Uber registration process was not a browsewrap agreement, the process had sufficiently conspicuous disclosures, and a jury trial waiver need not be a standalone disclosure. However, the way Uber implemented the registration, on a screen requiring text inputs that obscured the critical disclosures, essentially reduced the registration to a browsewrap agreement.
The court noted that attention could be drawn to the credit card fields (away from the terms), and there was no instruction to scroll down to see the terms.

The court agreed plaintiff was able to identify specific features of the Uber app functionality that reasonably explained why he may never have saw – thus never been aware of – terms that included arbitration provisions. Therefore, the court could not conclude as a matter of law that plaintiff had actual notice of, or assented to, Uber’s terms.
[N.D. CA; 3:16-cv-06652]
jbho: when optimizing for mobile, don’t forget your sign-up pages!

How nice it would have been to add a simple checkbox, or extra step in the flow to confirm a user was exposed to the terms. Although, app designers may well have resisted adding something like that. A fine balance to be sure, but now we have an example of why a little added sign-up friction may be a good thing.

This could be just the tip of the iceberg for Uber. If plaintiff prevails, this could ends up invalidating the terms agreed to by millions of users. Eeek!

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