Uber Pays Customers $344,000 for Tip Trickery

SAN FRANCISCO (CN) — Uber will pay a class of customers $343,861 to settle claims that it lied about how much its drivers receive in tips.

U.S. District Judge Edward Chen granted final approval of the settlement on Feb. 16, and praised the company for fully refunding 46,882 riders who claimed Uber kept part of a gratuity charge they thought went to drivers.

“Class counsel achieved an excellent settlement that provided the class with essentially full relief,” Chen wrote in a 10-page order.

Lead plaintiff Caren Ehret in January 2014 accused Uber of making customers believe it was giving drivers the full 20 percent gratuity fee it charged for each ride, though Uber kept about 40 percent of the fee.

Ehret said she wouldn’t have paid for the rides had she known that Uber was pocketing nearly half of the drivers’ tips.

Under the settlement, each class member will receive an amount equivalent to the 40 percent of the fees Ehret claimed Uber kept.

It also will pay $431,138 in attorneys’ fees, separate from the settlement fund.

Uber had said the class could recover only the money the company kept for itself, which it said was zero.

Class counsel Jacie Zolna, with Myron M. Cherry & Associates in Chicago, called the settlement a victory for class members in light of Uber’s contention.

“The fact that not a single one of the over 46,000 class members objected to the settlement says a lot about the results we were able to achieve,” he said Thursday.

And, he said, Uber stopped keeping drivers’ tips shortly after Ehret sued.

“So not only did we stop what we believe was an unlawful practice, but also obtained full refunds for those affected by the practice,” he said.

In December 2015, Chen partially certified a class of people who had received an email from Uber telling them that the 20 percent charge would be gratuity only, and who then paid for rides between April 2012 and March 2013.

Chen denied Ehret’s request to certify people who saw Uber’s misrepresentations on its website, concluding that their presence online did not mean the proposed class members saw them.

He preliminarily approved the settlement in September 2016.

Class counsel Michael Ram, with Ram, Olson, Cereghino & Kopczynski in San Francisco, said he was pleased with the settlement.

“This is essentially everything we asked for,” he said. “This is the money we said was wrongly taken from the class.”

Uber was represented by Stephen Swedlow with Quinn Emanuel Urquhart & Sullivan in Chicago. He did not return a request for comment Friday.