by Manasa Venkataraman, Research Associate at Takshashila Institute
It is no surprise that terms and conditions (T&C) on many websites and apps are biased. We already vaguely knew about many of these one-sided clauses: the heavy, incomprehensible legalese; the anticipated “take it or leave it” theme of the terms; and the significant compromise to privacy and other contractual protections.
But what have you really agreed to when you downloaded the Uber and Ola apps? Here is a deconstruction of the most vital clauses in the terms and conditions Uber and Ola make their users agree to:
Uber / Ola ≠ transportation service providers
Uber’s terms clarify that it does not provide any transportation services of any kind. Uber states that it is merely “a technology platform” enabling its users to coordinate transportation services with independent third party service providers. All it does, according to the T&Cs, is collate all the cab drivers around the customer’s location who can transport them to their destination.
Ola’s terms similarly state that “it is merely an electronic platform to facilitate aggregation of Vehicles and does not in any manner provide transportation services.”
Funnily, it appears that the aggregators’ drivers weren’t made aware of this business model.
Repeated agitations by the drivers about Uber’s interference in the way they perform their duties, belies that they are not just “independent third party service providers” but in fact employees of the company, as courts have held abroad. This means that Uber cab drivers only implement and have limited say over how they work. Similarly, Ola’s contract with its drivers clearly shows that they have got a raw deal.
Ola and Uber disclaiming that they only provide facilitation services, seems like them ditching any responsibility towards their customer and drivers, and will likely leave the customer almost remediless in case any difference arises in connection with the cab ride.
License everything to the Ola Raj
All rights that the customer has in the information provided to Ola (i.e., copyright, publicity rights, database rights, etc.) are licensed to Ola.
Per the terms, Ola has the right to use in the media, not just the customer’s information, but also exercise the customer’s rights over such information (including allowing third parties to view and use customer information). Most of us did not knowingly sign up for allowing Ola to use our private information and more gravely, all of our rights to protect such information. Surely, were such a clause highlighted to the customer while viewing the terms and conditions, they would have thought twice before agreeing to it.
The gross confiscation of rights over private data is alarming.
Uber / Ola’s liability is limited
According to both Ola and Uber’s terms, they will not be liable for any kind of damages (direct, indirect, contractual, tortious, and most other possibilities of legal action) even if they have been advised that their actions would lead to these consequences.
The next clause in Ola’s terms and conditions state that it will not be liable for more than ₹1,000. Uber, on the other hand says that its cumulative liability for any loss, damage or injury caused to its consumers will be a maximum of €500.
While such clauses may be common in standard form contracts (i.e., colloquially: “take it or leave it” contracts where the customer cannot negotiate any terms she finds onerous), that doesn’t make them just or valid. Clauses that unjustly limit a party’s liability such that the other party is left with no bargaining power have been struck down by courts as invalid. However, if the law does not allow liability to be limited in this manner, then, these terms say, that the law will prevail.
Brush up your Dutch law
Uber’s T&Cs are governed by the laws of the Netherlands. So, if there is a dispute between the customer and Uber, Dutch law will apply. Further, by agreeing to these terms, it has been assumed that the customer is aware of Dutch law and has agreed to be bound by it, never mind how technical or incomprehensible the legalese is.
The dispute resolution clause in the terms states that any dispute will be resolved first through mediation as per the rules of the International Chambers of Commerce, and if that fails, through arbitration. Either way, the place of resolution will be all the way in Amsterdam, the Netherlands.
While such clauses are sometimes used in standard form contracts, clearly, they are intended to be deterrents for customers from suing Uber.
Thankfully, Ola’s T&Cs are governed by Indian law. In comparison to Uber, Ola’s terms and conditions are marginally reasonable in this respect — they provide for all disputes to first be settled through consultation, and if that fails, through arbitration in Bangalore.
Ola can change the terms unilaterally without notification
Ola’s terms categorically state that the company has the discretion to alter its terms and conditions without prior notification to the customer.
In fact, the terms require that the customer visit Ola’s website regularly to check if anything in the legal terms has changed.
This is problematic clause for several reasons.
Firstly, it is unreasonable to expect everyone to comprehend legalese and detect seemingly innocuous changes. Secondly, under traditional contract law, if terms of a contract are varied, the person proposing the new terms must notify the other party of any change. This clause just throws the T&Cs open for courts to strike down.
Being unaware of the fine print fuels asymmetry between the service providers and the consumers, incentivizing the service providers to clock in more onerous clauses. This asymmetry comes to a boil when the dissatisfied consumer turns to his contract — only to realize that he has been severely short changed.
It is equally imperative for our data privacy and online contracting norms to catch up with the times. Until then, as every mutual fund advertisement concludes, please read the offer document carefully.
crossposted with permission from Indian National Interest. Read the original piece here.