Executive Summary: Key Legal and Evidentiary Issues

• Alleged violation of section 52 of the Competition Act by Uber’s “drip pricing” practices on the Uber Eats platform.

• Enforceability of the arbitration clause in Uber’s contract, including its application to class proceedings.

• Relevance and effect of provincial consumer protection legislation on the arbitration clause in a federal court proceeding.

• Whether section 25 of the Federal Courts Act prevents a stay in favour of arbitration.

• Determination of whether the arbitration clause was incapable of performance due to the arbitral institution’s refusal to accept class proceedings.

• Assessment of unconscionability of the arbitration clause based on bargaining power and the nature of the agreement.

Facts and outcome of the case

Background and parties

Arthur Lin commenced a proposed class proceeding against Uber Canada Inc., Uber Technologies, Inc., Uber Portier Canada Inc., Uber Castor Canada Inc., Just Order Enterprises Corp., Fan Tuan Holding Ltd., and Fantuan Technology Ltd. Mr. Lin alleged that Uber, through its Uber Eats internet platform, engaged in the practice of representing a price for its food delivery service that was not attainable due to additional fees, contrary to the prohibition on “drip pricing” contained in section 52 of the Competition Act, R.S.C. 1985, c. C-34.

Procedural history

The Federal Court stayed Mr. Lin’s action in favour of arbitration, in accordance with the arbitration clause contained in the contract entered into by Mr. Lin when he opened his Uber Eats account. Mr. Lin appealed, asserting that the Federal Court erred in enforcing the arbitration clause, given that it was contrary to consumer protection legislation in several Canadian provinces. He also argued that section 25 of the Federal Courts Act operated as a legislative override preventing the granting of a stay in favour of arbitration, that the arbitration clause was incapable of performance because the arbitral institution did not accept class proceedings, and that the arbitration clause was unconscionable.

Key legal issues

The court considered whether provincial consumer protection legislation invalidated the arbitration clause, whether section 25 of the Federal Courts Act prevented a stay, whether the arbitration clause was incapable of performance due to the arbitral institution’s refusal to accept class proceedings, and whether the arbitration clause was unconscionable.

The court’s analysis

The court found that provincial consumer protection legislation did not apply to invalidate the arbitration clause in this case, as Mr. Lin’s action was brought in the Federal Court and not in a provincial superior court. Section 25 of the Federal Courts Act was found to have no application. The court determined that the arbitration clause was not clearly incapable of performance, as Mr. Lin could have his personal claim arbitrated. The court also concluded that Mr. Lin had not established that there was an inequality of bargaining power or that the arbitration clause resulted in an improvident bargain, and therefore the clause was not unconscionable.

Outcome

The court dismissed the appeal and upheld the Federal Court’s decision to stay the action in favour of arbitration. The respondents, Uber Canada Inc., Uber Technologies, Inc., Uber Portier Canada Inc., Uber Castor Canada Inc., Just Order Enterprises Corp., Fan Tuan Holding Ltd., and Fantuan Technology Ltd., were the winning parties. The court made no order as to costs, and no damages were awarded.