SAN FRANCISCO — Uber said on Tuesday that it was eliminating forced arbitration agreements for employees, riders and drivers who make sexual assault or harassment claims against the company.
Before they could use Uber’s ride-hailing app, customers have had to consent to a terms-of-service agreement that required them to resolve any legal claims with the company in an arbitration hearing, rather than in open court. Now, customers can take those claims to court, the company said.
The decision to yield to pressure from critics who had pushed Uber to forgo the controversial legal practice is the company’s latest move to improve its badly tarnished image since Dara Khosrowshahi took over as chief executive last August.
With hopes for an initial public offering sometime in 2019, Uber is eager to move past a series of scandals that rocked the company over the past year and is trying to distance itself from behavior that prompted a grass-roots campaign urging riders to #DeleteUber.
On Monday, Uber started an advertising campaign featuring Mr. Khosrowshahi and a message that the company was “moving forward” in a new direction.
That new direction includes ending the use of forced arbitration agreements. The practice — common to many industries — has been denounced for allowing companies to keep sexual misconduct claims out of the court system and away from public view. Because the claims are kept under wraps in confidential hearings, critics say bad behavior is allowed to perpetuate without warning to future victims.
Uber already allows drivers and employees to get out of arbitration agreements, as long as they opt out within the first 30 days of signing a contract with the company. The changes detailed on Tuesday will also eliminate that 30-day requirement.
In a blog post, Uber said anyone bringing a sexual assault or harassment claim against the company would not be forced into arbitration and could pursue the matter in court. Uber also did away with a clause requiring people who settle such claims with Uber to sign a nondisclosure agreement that would forbid them from speaking about their experience.
“It’s important to give sexual assault, and harassment survivors control of how they pursue their claims. So moving forward, survivors will be free to choose to resolve their individual claims in the venue they prefer,” wrote Tony West, Uber’s chief legal officer. “They will be free to tell their story wherever and however they see fit.”
After Uber’s announcement, its rival Lyft said it would also waive mandatory arbitration agreements around sexual misconduct claims against the company and forgo confidentiality requirements for people who settle claims with Lyft.
Uber also said it planned to publish a safety transparency report that would provide data on sexual assaults and other episodes that take place on the “Uber platform.” That would include rides and deliveries, as well such incidents that happen before pick up or after drop off.
The company said it planned to publish the review after it completed a system for reporting incidents. Uber said it hoped to have the system, which it is working on with 80 women’s groups, in place by the end of the year.
In April, 14 women who have accused Uber drivers of sexually assaulting them wrote a letter to the company’s board, urging it to waive the arbitration agreement and allow them to proceed with a lawsuit in open court. Despite the change in policy, Uber is still not permitting people with individual claims of sexual assault or harassment to take collective action in open court.
Susan Fowler, a former Uber engineer whose account of harassment and sexism at the company prompted a wide-ranging investigation into the company’s workplace culture, has also thrown her weight behind legislation in California that would prohibit companies from making arbitration agreements a condition of employment. Ms. Fowler publicly challenged Mr. Khosrowshahi to scrap the forced arbitration agreements on Twitter.
“These kind of clauses are pretty common, but to have a company come out in front of it and say ‘it’s not the right thing to do’ is significant,” said Kristen Houser, chief public affairs officer for Raliance, an advocacy group working with Uber.
In December, Microsoft announced it was eliminating forced arbitration agreements with employees who made sexual assault or harassment claims.
In an interview, Mr. West, a former Justice Department official who joined Uber in November, said its new policy applied to people currently in arbitration with Uber over sexual assault of harassment claims.
He said waiving of arbitration only applied to those claims and not for other legal claims, like discrimination. Also, Uber will not lift the nondisclosure agreements on people who agreed to remain quiet in past settlements with the company.
Mr. West said the company struggled with the decision to commit to a safety transparency report for its rides, because he knows that it will be “disturbing” when the actual number of assaults that happen on Uber is announced — in part because of the company’s size and the ease with which customers can report an incident.
Also, there is no common terminology in law enforcement for reporting sexual assaults and sometimes the definitions of “sexual assault” differ from organization to organization, he said.
Mr. West said he expected the number of reported assaults to increase in the first six to nine months after reporting the initial figures because “people will see that we are paying attention, that we are counting, that we looking to act on this data and that will encourage more reporting.”
An earlier version of this article misstated a change to Uber’s terms-of-service agreement. The company’s customers can now take individual claims of sexual assault or harassment to court, rather than forced arbitration. They cannot join class-action lawsuits.
Follow Daisuke Wakabayashi on Twitter: @daiwaka