By Dan Noll on March 18th, 2025 in Car Accident
Springfield Rideshare Accident Lawyers Explain Uber and Lyft Arbitration Clauses: What Illinois Passengers Need to Know to Protect Their Rights to Compensation
Ridesharing apps likes Uber and Lyft have become one of the most popular ways of getting around Illinois and the rest of the United States. According to statistics, Uber and Lyft complete millions of rides every year in the United States – including a significant amount in Illinois, particularly Chicago and near the capitol of Springfield. But when you download the Uber or Lyft app and tap “I agree” to the terms of service, our Springfield rideshare accident lawyers know that you are doing more than just gaining access to convenient transportation. You are also agreeing to something called an “arbitration clause” – a legal provision that could significantly impact your rights if you are ever injured in a rideshare accident in Illinois. These arbitration clauses require most disputes with rideshare companies to be resolved through private arbitration rather than in court. This includes nearly all personal injury claims that are handled in Illinois, potentially limiting your right to sue or join class actions against these companies.
At the Noll Law Office, their experienced ridesharing accident lawyers in Springfield know that arbitration clauses like those employed by Uber and Lyft can make obtaining compensation more difficult for victims and their families. That’s because these arbitration clauses can make even the most basic of car accidents much more complicated and difficult for victims and their families due to special rules created within the agreements as well as those in the law. Although still a growing area of law, it remains imperative for victims and their families to protect their rights by retaining an experienced legal team that understands not just personal injury law and the applicable medicine, but also contract law and how these complex arbitration clauses affect car accident cases.
In this post, the Noll Law Office will explain exactly how these clauses work, when they apply, and how injured parties – including passengers, pedestrians, other drivers, and rideshare drivers themselves – can still protect their rights after a rideshare accident in Illinois. If you still have questions, schedule a free consultation with one of the Springfield car accident lawyers at the Noll Law Office by dialing (217) 414-8889.
What Is an Arbitration Clause and Why It Matters
Arbitration is a private dispute resolution process that takes place outside the traditional courtroom. Instead of presenting your case to a judge or jury, your claim is decided by one or more arbitrators – typically attorneys or retired judges who act as private decision-makers.
This process differs significantly from the typical court-based personal injury litigation in Illinois, as typical court proceedings are public, follow established rules of evidence and procedure, and provide extensive rights to appeal.
However, arbitration is generally private, follows more flexible procedural rules, and offers limited grounds for appeal – even if an arbitrator is wrong on the facts or law. Despite these, arbitration is often favored by many businesses and other litigants, notably because it offers a fast and efficient process to resolve disputes.
Standard Terms in Rideshare Agreements
Uber and Lyft’s terms of service contain several common provisions that affect your legal rights. These are part of the rights that you are given up by accepting the terms of the app when you sign up, login, and hail a ride. Most passengers never read these terms. But when you click “I agree” during sign-up, you legally bind yourself to these provisions, which can have serious implications if you are later injured.
Some of these standard terms include the following:
- Mandatory arbitration requirementsthat compel you to resolve disputes through arbitration rather than court
- Class action waiversthat prevent you from joining with other injured parties in a group lawsuit
- Limited discovery provisionsthat may restrict the information you can obtain from the company
- Notice of a claim provisions to the ridesharing company or their insurance company, including by reporting the accident and/or injuries on the app or via another process within a certain time limit, and
- Many other provisions that may or may not apply with your case in Illinois, which experienced Springfield rideshare accident lawyers can review and handle for you and your family.
Scope of Arbitration for Rideshare Accidents
Arbitration typically applies to injuries that occur during an active trip, disputes arising from use of the app, and most interactions with the rideshare company. This means if you are injured while riding in an Uber or Lyft, your claim against the company will likely be subject to arbitration.
Some potential gray areas exist, such as if the app was on but you were not yet matched with a ride, or if you were injured as a passenger in a ride that someone else ordered. These situations might require legal analysis to determine if arbitration applies. Less likely is the situation where you are a pedestrian or cyclists injured in a ridesharing accident, as you were not engaged in a ride at all. However, if you are still a user of Uber or Lyft and have downloaded the app and agreed to that provision, there is the possibility that a defense lawyer or insurance adjuster will try to argue that you are still subject to those terms.
The Effect on Personal Injury Claims in Illinois
Uber and Lyft arbitration clauses have several different impacts in Illinois. Many of these impacts fall outside the normal rules of procedure or evidence for other types of motor vehicle accident cases. This includes the following:
Influence on Negotiations and Settlements
For instance, if you are injured as a rideshare passenger in Illinois, the mandatory arbitration clause can prevent or restrict you from filing a lawsuit in Illinois state courts for personal injuries, lost wages, and medical bills. Family members may also be precluded from seeking loss of consortium and other damages.
Rather, instead of having your day in court, you may be required to:
- Follow the arbitration procedures outlined in the terms of service
- Lose the right to have your case heard by a jury of your peers or in a bench trial by a judge applying the correct rules of evidence
- Face a shortened window for filing claims compared to Illinois’ normal statute of limitations
- Typically cannot appeal an unfavorable decision except in very limited circumstances, even if the facts or law is wrong
- May face an arbitrator who has handled many appeals for Uber and Lyft, and although neutral and unbiased, still is being paid and kept on a list by these ridesharing companies as an arbitrator (and therefore is inclined to stay on that list by leaning in favor of them on close questions of law or fact), and
- Other factors that normally would allow victims and their families to commence a claim in court.
Influence on Negotiations and Settlements
Rideshare companies may leverage arbitration clauses to push for lower settlement offers that are faster and before a victim’s true injuries may be completely known or displaying symptoms. Knowing that you cannot take them to court or join a class action gives them significant negotiating power, as this is something that private citizens with personal injury lawyers usually have an advantage over large corporations. Thus, when negotiating with insurance companies for rideshare-related injuries, the existence of an arbitration clause can be a disadvantage for victims and their families – especially if they need money now. Insurance adjusters may offer lower settlements, knowing your options for recourse are limited by arbitration clauses.
Illinois-Specific Enforcement
Illinois courts generally view and enforce mandatory arbitration clauses favorably, following the Illinois Uniform Arbitration Act. This law states that written agreements to arbitrate are “valid, enforceable and irrevocable” except under limited circumstances. Recent Illinois cases have upheld rideshare arbitration agreements under these agreements too. For instance, in Johnson v. Uber Technologies, Inc., the Northern District of Illinois enforced Uber’s arbitration agreement, finding the sign-up process provided reasonable notice and the user’s claims fell within its scope.
One of the most recent decisions upholding the arbitration clause in a personal injury case comes from the highest court in New York, the Court of Appeals, which concluded that, under the Federal Arbitration Act and the state law, that the “I agree” to the terms of service provision created an enforceable agreement to arbitrate all disputes. In doing so, the Court of Appeals in Wu v Uber Technologies, Inc. found that this type of contract “does not vary meaningfully from state to state” and, although it did not cite to Johnson, it did rely on other arbitration cases – including those applying Illinois law.
Key Considerations for Different Types of Injured Parties
There are several key considerations for victims and their families who have been injured in an Uber or Lyft accident in Illinois. The first is to always retain an experienced Springfield rideshare accident lawyer, as the personal injury law, medicine, and contract provisions under the arbitration provisions are very complicated. Without the help of a skilled lawyer, victims and their families may lose rights to compensation under the law.
The other key considerations include the following:
Insurance Coverage Lawyers
Understanding how Uber and Lyft’s insurance coverage works in Illinois is crucial. Coverage typically changes depending on the driver’s status. Generally, the different statuses include the following:
- Driver waiting for a request – lower liability limits apply
- Driver enroute to pick up a passenger – higher commercial liability coverage applies
- Driver with a passenger – full commercial liability coverage applies.
Opt-Out Provisions and Potential Exemptions
Some rideshare contracts allow passengers to opt out of arbitration, but typically only within a very short window after signing up (often just 30 days). This option is rarely prominently displayed, and most users are unaware it exists. In addition to these opt-out provisions, arbitration might not apply in certain scenarios, such as the following:
- Driver misconduct beyond the scope of normal operations
- If the arbitration clause is declared invalid by a court
- Sexual assault cases (exempted by federal law)
- Claims by parties who never agreed to the terms (like pedestrians or other drivers), and
- In situations where arbitration is not timely accepted by the ridesharing company, against a non-party, or where another area of law precludes application of the arbitration clause.
Special Circumstances
Less common scenarios can complicate arbitration issues, including pulling cases outside of the arbitration clause. such as the following:
- Accidents involving multiple parties, some of whom did not agree to arbitration
- Collisions with pedestrians who never agreed to any rideshare terms
- “Phantom” vehicle scenarios where the app was on but no passenger was assigned
- Wrongful death claims (which may involve special legal considerations under Illinois law), and
- Other circumstances that might affect whether arbitration applies and which insurance policy should respond to claims, all which should be handled by an experienced Springfield ridesharing accident lawyer.
Navigating Arbitration as an Injured Party
Following a motor vehicle accident involving an Uber or Lyft vehicle in Illinois, victims and their families must take certain steps to protect their rights due to the Uber and Lyft arbitration clauses that may affect their rights and options. Some of the most important things that they should do include the following:
Initiating the Arbitration Process
Attempting to settle a ridesharing accident case before going to court or arbitration is always advisable because it allows victims to recover compensation for their injuries, lost wages, and medical bills at a faster rate and when they need the money the most. However, that is not always possible, and defense lawyers and insurance adjusters also know this and will try to leverage that fact against victims and their families through attrition.
Further given the time limits of arbitration clauses in Illinois and for ridesharing, understanding the process is important to protecting your rights. This includes the following:
- Filing a claim – you will need to submit a formal demand for arbitration according to the procedure in the terms of service, typically with organizations listed in the agreement or on the ridesharing company’s website or legal notices/response to a demand to arbitrate
- Selecting an arbitrator – the process for choosing who decides your case varies, but often involves selecting from a list of potential arbitrators – many who have worked with Uber or Lyft before
- Timelines – arbitration often moves faster than court litigation but has strict deadlines you must follow otherwise your claim could be denied
Retaining Legal Representation Such as an Experienced Springfield Rideshare Accident Lawyer
Having an attorney such as one of those at the Noll Law Office who understands personal injury law, medicine, and arbitration is crucial to protecting your rights to compensation. By obtaining such counsel, they can help you navigate the arbitration process from start to finish, handle evidentiary and procedural issues unique to arbitration, maximize your compensation despite the limitations of the forum, and identify potential grounds to challenge the arbitration agreement itself. They can also help you present your damages and obtain compensation that matches what is appropriate for your jurisdiction (sometimes known as the “going rate”).
Understanding Recent Legal Developments in Illinois
A significant change in Illinois law now affects rideshare companies. As of January 2024, Illinois eliminated the “common carrier” exemption for rideshare companies. This change means Uber and Lyft are now treated as common carriers in Illinois – subjecting them to a higher duty of care toward passengers. While this does not eliminate arbitration requirements, it does strengthen the substantive legal claims passengers can bring within arbitration. Additionally, federal law now prohibits enforcement of pre-dispute arbitration agreements for sexual assault or sexual harassment claims. This means if a passenger is sexually assaulted by a driver, they can take their case to court regardless of any arbitration clause.
Injured in a Rideshare Accident? The Springfield Rideshare Accident Lawyers at the Noll Law Office Can Help You Navigate Uber and Lyft Arbitration Clauses in Illinois
If you or a loved one have been involved in an Uber or Lyft accident – whether as a passenger, a pedestrian, or a driver of another vehicle – in Springfield or anywhere else in Central Illinois, you may be entitled to compensation. However, in order to obtain that compensation, you will need to navigate one of the most complex arbitration clauses possible – which is slanted in such a way to make it harder for you and more favorable for the big companies like Uber and Lyft.
That’s why victims and their families must hire an experienced Springfield rideshare accident lawyer like one of those at the Noll Law Office for help. They are fifth-generation lawyers dedicated to protecting the community that they and their family have served for decades, standing up to some of the largest insurance companies in the region. To learn more about your rights, schedule your free consultation by dialing (217) 414-8889 or by sending a message here.