Uber has opted arbitration to solve a dispute with Kenyan drivers about commuter fare reductions.
In an application, the ride-hailing company requested Kenya’s Supreme Court to allow it to resolve disputes with drivers through channels agreed upon in contracts, saying it was “improper” for its partners to seek legal redress without first going through the established dispute-resolution methods.
This was in reaction to a lawsuit filed by a group of drivers and a local taxi company against Uber in 2016, after the ride-hailing company dropped fares by nearly half to increase competition for Bolt, its major rival in Kenya. The drivers claimed that the action compromised their revenues and was a breach of contract, while Uber claimed that they reserved the right to revise their charges.
“The plaintiffs (drivers) have filed the instant suit in complete disregard of the said Arbitration Clause, and it is highly improper for the plaintiffs to have instituted the instant proceeding in contravention of the agreements. There being a dispute between the parties, the same ought to be referred to arbitration,” Uber’s legal team stated.
Uber’s legal team made reference to the contract between the company and its drivers, which includes an arbitration clause that states, “Any dispute, conflict or controversy, howsoever arising out of or broadly in connection with or relating to this agreement, including those relating to its validity, its construction or its enforceability, shall be first mandatorily submitted to mediation proceedings under the ICC Mediation Rules.”
“If such dispute has not been settled within sixty days after request for mediation has been submitted under such ICC Mediation Rules, such dispute can be referred to and shall be exclusively and finally resolved by arbitration … The place of arbitration shall be Amsterdam, The Netherlands,” the clause reads in part.
Uber’s application follows a decision by the court last year confirming a relationship between Uber Kenya Ltd and Uber BV firms in The Netherlands, making them liable to their partners and paving way for a suit against the company. Uber Kenya had sought to distance itself from the parent company to abscond liability for their actions in Kenya.
Uber was one of the first companies to enter the Kenyan industry, and it quickly attracted a large number of drivers. However, as competitors like Bolt developed a foothold in the market, the company looked for methods to stay afloat, and cutting commissions for drivers was an easy fix.
Following the government’s implementation of a 15% levy, the company was compelled to suspend operations in Tanzania.