New Jersey Court Blocks Couple’s Lawsuit Against Uber, Citing Arbitration Clause

A New Jersey appeals court has ruled that a couple injured in an Uber crash cannot sue the company for damages — upholding Uber’s mandatory arbitration clause and reaffirming the binding power of its terms and conditions.

The decision, issued last week, stems from a lawsuit filed by a couple in their 50s who suffered severe injuries when their Uber driver allegedly ran a red light and collided with another vehicle in early 2022. The court found that Uber’s user agreement, accepted during an Uber Eats order placed by their daughter, legally bound the couple to resolve any disputes through arbitration rather than a civil lawsuit.

How Uber’s Arbitration Clause Restricts Riders’ Legal Rights

Like many large technology companies, Uber Technologies, Inc. requires users to agree to binding arbitration before accessing its services. The provision prevents customers from filing lawsuits in court and mandates that disputes be handled privately before an arbitrator.

The appellate panel ruled that this arbitration clause is both clear and enforceable, even if a family member accepted the terms on behalf of the account holder. The judges stated that Uber passengers are bound by these terms “whenever they use the app,” including its food delivery service, Uber Eats.

This ruling underscores a growing consumer issue: millions of rideshare users may unknowingly be waiving their right to sue Uber for injuries or negligence by simply tapping “I agree.”

The Crash That Sparked the Legal Battle

Court documents describe a devastating rideshare accident that occurred in March 2022. The Uber driver allegedly ran a red light and T-boned another vehicle, leaving both passengers critically injured.

• John, one of the plaintiffs, suffered a fractured sternum and arm, requiring bone graft surgery.

• Georgia sustained spinal, rib, and abdominal injuries, undergoing multiple surgeries and over a year of rehabilitation.

Their medical bills and lost income exceeded their insurance coverage — and because the accident occurred in a commercial vehicle, their personal auto policies offered no relief. When the couple sought compensation from Uber, they were informed that the company’s arbitration policy barred them from filing a lawsuit.

Why Arbitration Often Favors Corporations

Arbitration is a private dispute resolution process, often criticized for favoring corporations by keeping proceedings confidential and non-precedential. Unlike a public court case, arbitration decisions are not published and cannot be appealed easily, making it difficult for victims to set broader legal precedents or expose corporate wrongdoing.

Under Uber’s agreement, even personal injury or wrongful death claims must typically be handled through arbitration — a fact many riders are unaware of when signing up. The appellate court found that Uber’s language “clearly and unambiguously” required all disputes to be settled outside of court.

Consumer rights advocates argue that these clauses limit accountability, making it harder for injured passengers to recover full compensation for medical expenses, lost wages, and emotional trauma.

What the Ruling Means for Uber and Lyft Passengers

The New Jersey decision sends a clear message: using Uber means agreeing to its terms, even if you haven’t read them. By clicking “accept,” users are effectively waiving their right to a jury trial and consenting to private arbitration.

Key takeaways for rideshare passengers:

• Accepting Uber’s terms binds you to arbitration-only dispute resolution.

• Arbitration may limit transparency and reduce compensation outcomes.

• Victims should seek experienced rideshare accident attorneys familiar with arbitration procedures.

Victims injured in Uber or Lyft accidents still have potential claims against negligent drivers, third parties, or insurers. A qualified rideshare accident lawyer can help determine whether exceptions to arbitration apply or whether Uber can still be held liable under state consumer protection laws.

Justice Watchdog Analysis

The ruling marks another instance where corporate arbitration policies restrict public access to justice — a recurring theme in the gig economy era.

Need Legal Help?

If you or someone you love has been injured in a rideshare crash, visit our Legal Resources for Accident Victims page or contact a licensed rideshare accident attorney to explore your options.