Judge Seems Wary|of Uber’s Defense

SAN FRANCISCO (CN) - A federal judge Wednesday did not appear to buy an Uber attorney's arguments that he should dismiss a class action accusing the company of withholding tips from drivers.

Uber attorney Theodore Boutrous told U.S. District Judge Edward Chen that the class led by former Uber driver Hakan Yucesoy has not pleaded an essential element in its third amended complaint : how Uber's marketing campaign about tips being included persuaded riders not to give them.

Without such specificity, Boutrous said, the class doesn't have a claim.

Yucesoy's original complaint, filed in Massachusetts in 2014, accused Uber of misinforming customers that tips are included in the fare. He said that without this misinformation, customers would tip, as is customary in the taxi industry. Yucesoy et al. claimed that Uber ran a pervasive online ad campaign that told riders they need not tip their drivers because gratuities are included in the cost of the ride.

Uber calls those claims "vague and generic," and says drivers must show exactly where and when Uber made the statements and whether riders saw them and relied on them.

Plaintiffs' attorney Shannon Liss-Riordan told Judge Chen that in her 15 years of litigating the Massachusetts tips law, she has never encountered an instance in which plaintiffs were required to, in essence, prove their claims at the pleading stage.

"No court has required that degree of specificity," Liss-Riordan said. "Under Massachusetts tips law, the standard is what a reasonable customer believes to be the case, if they believe the charge at issue to be a gratuity. We don't need to find every customer who rode with Mr. Yucesoy and ask them what they knew. It will be for a jury to determine whether a reasonable customer would have believed that this was a tip."

But Boutrous said the standard for pleading should be higher in a case where the deception is attenuated: i.e., where riders are the ones being deceived about whether drivers receive their share of the supposedly included tip.

"If Mr. Yucesoy came in and said there were statements on a website and people may have been exposed to them and might not have given me a tip, that's not a claim. There's no allegation of exposure or that any individual was exposed to these statements," Boutrous said. "These are much sketchier allegations. They can't connect the dots."

Chen took the arguments under submission. He said he would weigh whether there was enough public exposure to Uber's representations about tips.

But the judge added: "It seems unrealistic to require that degree of specificity that you have to show that a particular passenger was exposed and relied upon a specific representation. It seems to me there's enough specificity to get the next stage."

Follow @MariaDinzeo

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