Uber’s Mandatory Gratuity Policy May Have Been Lining Corporate Pockets Instead of Benefiting The Drivers

In January 2014, plaintiff Caren Ehret filed a lawsuit against Uber Technologies Inc. claiming that when she used Uber’s mobile app that she was charged the mandatory 20 percent tip on top of the cost of the metered fare. She thought the money would go to the driver, but in reality Uber keeps it for itself. In her complaint, Ehret alleges that Uber made false claims on its website and in advertising about where the gratuity goes. Ehret even saw that claim in the app, but Uber has allegedly since destroyed the old version of the app.

On Thursday, U.S. District Court Judge Edward Chen expressed his doubt that plaintiffs could show that all passengers with similar experiences actually saw the purported misrepresentation.​ The plaintiffs will need to show that passengers were exposed to Uber’s messages about the gratuity in order to show that they relied on those messages when they paid the tip, Judge Chen said. “If you need to show who was exposed and who was not, then you have problems with predominance.”

Although he said there’s no need to prove that every single class member was exposed to the alleged misrepresentation, he said it was “possible, even probable,” that people who hailed Uber wouldn’t have seen any information about the 20 percent gratuity.

Plaintiffs’ attorney Michael Ram of Ram Olson Cereghino & Kopczynski LLP argued that throughout the class period, Uber made false claims on its website and in advertising about where the gratuity goes. Plaintiffs’ attorney has suggested that a simple survey of customers would determine the percentage that saw the website or app.
The proposed class could potentially include a million Uber riders who used the company’s UberTaxi service between April 2012 and the time Uber changed its policy regarding automatic gratuity for taxi drivers in March 2013.

The case is Caren Ehret et al. v. Uber Technologies Inc., case number 3:14-cv-00113 in the U.S. District Court for the Northern District of California, San Francisco Division.

For more information about consumer lawsuits, contact Ford & Diulio PC at 714-384-5540 or email us.