Uber's Arbitration Clause Shields It From Liability, Couple Learns the Hard Way

A New Jersey appeals court has ruled that a couple cannot sue Uber over a life-altering car accident because of the app's terms and conditions, even though they claim it was their daughter who agreed to them while placing an Uber Eats order.

Couple's Devastating Crash Leaves Them Seeking Compensation, but Uber's Fine Print Stands in the Way

Couple's Harrowing Accident and Ongoing Struggles

In early 2022, John and Georgia McGinty, a Mercer County couple in their 50s, were involved in a devastating car accident while riding in an Uber. The crash left them with serious physical, psychological, and financial damages, including John suffering a fractured sternum and severe fractures to his left arm and wrist, and Georgia sustaining cervical and lumbar spine fractures, rib fractures, and other traumatic injuries. The couple underwent numerous surgeries and procedures, and Georgia was unable to return to her job as a matrimonial attorney until over a year after the accident.The medical bills from the incident piled up, and the couple's auto insurance was unable to cover the expenses since they were injured while traveling in an Uber. Seeking compensation for their losses, the McGintys filed a lawsuit against the ride-sharing company in February 2023.

Uber's Arbitration Clause Comes into Play

Uber responded to the lawsuit by filing a motion to dismiss the complaint and compel arbitration, arguing that Georgia McGinty, a longtime customer of Uber Rides and Uber Eats, had agreed to arbitrate any disputes with the company when she signed off on the language in the app's terms of use on three occasions over the years.The McGintys fought back, claiming it was actually their daughter, who was a minor at the time, who had most recently agreed to the terms when she used Georgia's phone to order food on their behalf. However, the lower court initially sided with Uber, denying the company's motion to compel arbitration in November 2023.

Appeals Court Overturns Lower Court Decision

Uber appealed the decision, and late last month, the appeals court ruled in its favor. The three-judge panel determined that the arbitration provision contained in the agreement, which Georgia or her minor daughter had agreed to while using her cell phone, was valid and enforceable.The appeals court's decision was based on the finding that Georgia had agreed to the arbitration clause, whether "by herself or through her daughter using her Uber account." The court also noted that the McGintys' statements about being preoccupied with packing and their daughter being "capable" of frequently ordering food supported "the inference that the daughter acted knowingly on Georgia's behalf."

Implications and Concerns Raised by the Ruling

The case has raised concerns about the far-reaching implications of Uber's arbitration agreements and the potential for companies to exploit such clauses to avoid liability. The McGintys' attorney, Mike Shapiro, argues that Uber has been "extremely underhanded" in its willingness to compel arbitration, subjecting "millions and millions of Americans and people all over the world to a waiver of their hard-fought rights."Shapiro also worries that this ruling is "evident of the sort of slippery slope in action, that companies like Uber are going to keep pressing the envelope." He points to other recent examples, such as Disney's attempt to block a wrongful death lawsuit by citing a customer's Disney+ trial agreement, as signs that companies are increasingly trying to subject "entirely separate aspects of their enterprise" to arbitration clauses.The McGinty case highlights the power of these arbitration agreements and the challenges faced by consumers who seek to hold companies accountable for their actions. As Uber and other tech giants continue to expand their reach, the battle over the enforceability of these clauses is likely to intensify, with significant implications for the rights and protections of individuals.