Make your voice heard and make Postmates pay: These are your options!
During a time of a major health crisis, restaurants have benefited from partnering with food delivery companies such as Postmates. Founded in 2011, Postmates offers local food delivery services that include freshly prepared meals, as well as groceries ordered from local stores. The company operates an app that connects to customers that want to stay at home, yet still enjoy the robust flavors delivered by nearby restaurants. Postmates exemplifies the on-demand business model, which co-founder Bastian Lehmann refers to as the “anti-Amazon” business model.
As with every other company operating in the food delivery industry, Postmates has faced a large number of legal actions over the course of the last decade. In May of 2019, the pressure from labor activist group Working Washington forced Postmates to change its pay scale for delivery drivers. Although Postmates initially balked at changing its compensation structure, the company eventually agreed to allow driver tips to remain separate from how the company determines compensation.
The growing number of legal actions has changed how Postmates handles class action lawsuits.
Class action lawsuits cost a considerable amount of money to defend, even if a settlement is reached by both parties. The legal actions also take months, sometimes years toc conclude. With time and money huge issues, Postmates recently changed its dispute resolution process to binding arbitration.
When you read the terms of services policy established by Postmates, you will find the following provision that addresses the company’s dispute resolution process:
“Postmates and You mutually agree that any and all disputes or claims between the Parties will be resolved in individual arbitration. The Parties further agree that by entering into this Agreement, they waive their right to have any dispute or claim brought, heard or arbitrated as a class and/or collective action, or to participate in any class and/or collective action, and an arbitrator shall not have any authority to hear or arbitrate any class and/or collective action (“Class Action Waiver”). Only an arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Mutual Arbitration Provision, including without limitation any dispute concerning arbitrability. However, as stated in Section 10B.iv below, the preceding clause shall not apply to any dispute relating to or arising out of the Class Action Waiver and Representative Action Waiver, which must proceed in a court of competent jurisdiction and cannot be heard or arbitrated by an arbitrator.”
Agreeing to participate in the Postmates binding arbitration process does not mean you do not have other legal options to use for persuading the company to stop an illegal or an unethical practice.
The binding arbitration process followed by Postmates allows you to file a claim against the company in a small claims court. However, a case brought in front of a small claims court judge is prohibited from seeking monetary damages that exceed $10,000. Let’s say a Postmates driver hit your parked car and the ensuing damages went way above the $10,000 limit. Your best legal option to recover the entire costs of repairs is to go through the binding arbitration process not small claims court. A judge presiding over a small claims court case can also award non-monetary damages, which typically involve forcing a company to alter one or more of its business practices.
As the federal government’s primary watchdog over consumer affairs, the Consumer Financial Protection Bureau (CFPB) receives complaints from consumers concerning illegal and unethical business practices. The CFPB has the legal authority to issue punitive fines against companies that violate federal consumer protection laws. If the CFPB deems violations to be especially harmful, then the federal consumer protection agency can force a company to change the way it does business or worse, demand that a company shut down its operations.
Although Postmates has received the highly coveted A rating from the Better Business Bureau (BBB), the most prominent consumer advocacy organization has not accredited the food delivery company. The most likely reason for the lack of accreditation stems from the nearly 1,600 consumer complaints against Postmates the BBB had to resolve since the start of 2017. In addition, Postmates does not respond to BBB complaints, which means the company appears not to pay much attention to customer concerns.
Filing a case in a small case court leads to a judicial decision, but the judicial decision is not considered binding. This means one of the parties has the right to file an appeal to contest the original decision. Bonding arbitration is exactly what it means: A decision issued by an arbitrator is final. Both parties agree on a neutral arbitrator to oversee the binding arbitration process. FairShake uses the binding arbitration guidelines established by the American Arbitration Association.
At the start of the binding arbitration process, the neutral arbitrator will bring both sides together to determine whether negotiations can settle the dispute. If the hearing must move forward, you will have to present physical and anecdotal evidence to support your claim. A representative from FairShake can help you gather the evidence you need to make a convincing argument. Postmates also has time allocated to present the company’s case. Medical records, as well as sales receipts from an auto repair shop, are two common forms of documentation submitted in binding arbitration cases that involve Postmates.
The binding arbitration provision written into the Postmates terms of services policy should describe which party is responsible for paying for the cost of a binding arbitration hearing. However, the binding arbitration provision written into the Postmates terms of services policy does not state which party bears the financial burden. The neutral arbitrator presiding over the case must decide which party must pay the fees.
The binding arbitration process can take months to conclude. A representative from FairShake can help you shorten the process, as well as receive a favorable judgment from a neutral arbitrator.