A centuries-old contract rule just blew a hole in the rideshare giant’s legal playbook
Uber’s own fine print came back to haunt it after a California appeals court refused to send a pricing class action to arbitration.
The November 4 ruling means the rideshare giant’s bid to move the dispute - which accuses Uber of charging riders more than the price shown on its app - out of the public courts has failed.
The dispute centers on Uber’s terms of use, the agreement every rider clicks through before booking a trip. That agreement required users to settle disputes through individual arbitration and gave up their right to bring class claims. But it also included a fallback: if a court found the class action waiver unenforceable, claims caught by that waiver “shall proceed in a court of competent jurisdiction.”
That fallback proved decisive.
The underlying complaint, filed in December 2024, alleged Uber advertised “upfront” pricing and told riders the displayed price was “the price they’ll pay at the end of the ride.” In reality, the complaint alleged, the upfront price was only an estimate - and Uber “frequently” charged more when a ride ran longer or further than expected.
Uber argued the riders were really chasing a private remedy that would only help existing app users, not the broader public, and that arbitration should apply. The court disagreed. It held that stopping deceptive pricing on a platform anyone can sign up for counts as relief that benefits the public. In the court’s words, “Uber cannot evade consumer protection laws just because its allegedly deceptive scheme is complicated.”
Then came the contract language. Uber wanted the court to split the case - keep the public relief claim in court but send the riders’ individual money claims to arbitration. The hitch was the word “claim” in the agreement’s fallback clause. It could mean an entire legal claim or just a specific type of relief. The court found that ambiguity fatal to Uber’s position. Under a centuries-old rule of contract interpretation called contra proferentem - where unclear language is read against the party that wrote it - the court construed the clause against Uber.
Uber argued federal arbitration law overrode that rule and required any ambiguity to be resolved in its favor. The court rejected that too, reasoning that the US Supreme Court itself had made consent the “first principle” of arbitration law. Applying the rule here did not undermine arbitration - it simply held Uber to what its contract actually said.
The US Chamber of Commerce backed Uber with a friend-of-the-court brief. It did not change the outcome.
The decision is certified for publication, making it binding precedent across California.
For HR teams and in-house counsel who build dispute resolution clauses into employment or service agreements, the lesson is direct: if the language in your arbitration clause is ambiguous, a court will read it against you - especially in a take-it-or-leave-it contract. A clause that looks airtight on paper can unravel if it does not spell out exactly what happens when part of the waiver falls.
The ruling addressed Uber’s motion to compel arbitration. The underlying allegations of deceptive pricing have not been tried, and no court has made findings on the merits.
