More Bad News for Uber’s Contract Formation–Ramos v. Uber

In last year’s Meyer v. Uber, Uber won an important ruling in the Second Circuit upholding its online contract formation with riders. Still, the contract formation news has not been all good for Uber. For example, in last year’s Metter v. Uber, a different court said that the pop-up keyboard for inputting credit card numbers hid the contract call-to-action, jeopardizing contract formation.

Today’s case also has to sting. Ramos downloaded UberWAV, an app for requesting wheelchair-assisted vans. Ramos claims she placed 3 orders in an hour without success, and she sued for this alleged failure to deliver services. Uber invoked the arbitration clause in its T&Cs. The court denies arbitration.

Unfortunately, the court doesn’t provide screenshots. Instead, the court describes the key screen:

The third screenshot displays the last step, denominated ‘ADD PAYMENT‘ where the applicant would input their credit card details or PayPal information. Below the input fields for the credit card information is the following text: ‘By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy.‘ To finish the process the applicant must click on a button labeled ‘DONE.‘ The applicant could before clicking the button labeled ‘Done‘ review the Terms & Conditions.

Brauchli claims that the phrase ‘Terms & Conditions and Privacy Policy‘ on the third screenshot is displayed within a rectangular box. He further claims, without any explanation, that its placement inside the rectangular box indicates that it is a clickable button. If the button is clicked the individual would be taken to a screen that contains other clickable buttons, including buttons entitled ‘Terms & Conditions‘ and ‘Privacy Policy.‘ If the Terms and Conditions button is clicked, the Terms & Conditions in effect at the time would be displayed.

This process appears to differ from the screenshots at issue in Meyer and Metter, where the payment screen did not have a “done” button, a rectangular box around the phrase “Terms & Conditions and Privacy Policy,” or multiple levels of buttons.

The Ramos court says that Uber’s call-to-action, “By creating an Uber account, you agree to the Terms & Conditions and Privacy Policy,” is ambiguous because reasonable users might have thought “the phrase Terms and Conditions pertains to letting Uber use the registrant’s facebook account or email and mobile number for sending bills and receipts, as stated in the first screenshot.” This seems like a tendentious reading. It’s so much more likely that users thought Uber was referring to its own standalone T&Cs. Still, it’s a reminder that every word in the call-to-action matters.

The court also says that nothing indicated to users that clicking on the words ‘Terms & Conditions and Privacy Policy” would display the associated text. Without seeing the specific UberWAV screen, it’s hard to gauge how users would have perceived the box. In Meyer, the Second Circuit said “a reasonably prudent smartphone user knows that text that is highlighted in blue and underlined is hyperlinked to another webpage where additional information will be found.” The Ramos court doesn’t cite the Meyer ruling, so we don’t know if the Ramos court reaches a different conclusion based on differences in the user interface or a different assessment of consumers’ expectations.

This opinion exposes an obvious deficiency in the Meyer ruling. The Meyer court based its decision on the expectations of reasonably prudent smartphone users, but it determined those expectations using judicial intuition, not empirical evidence. That’s not how we should make the sausage. It means other courts can reach conflicting conclusions about those expectations, without any clear way to resolve those differences.

I think this opinion evidences a broader trend that courts are becoming more exacting about each and every aspect of forming an online contract, especially when arbitration is involved. Contract formation processes are now failing that historically would have succeeded. We should assume judges will scrutinize online contract formation with some skepticism and with zero deference to the drafter/implementer.

Fortunately, we can easily rise to this challenge. Consider how Uber could have avoided this outcome. It might have added one word to the call-to-action: “Uber’s Terms & Conditions and Privacy Policy.” It should have made the hyperlink presentation unmistakable (if it didn’t), and we recommend a separate checkbox for the T&Cs.

Case citation: Ramos v. Uber Technologies, Inc., 2018 WL 2451810 (N.Y. Sup. Ct. May 31, 2018)