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Thursday, June 20, 2024 | Back issues
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App Use Could Derail Class in Uber Tip Case

SAN FRANCISCO (CN) - A federal judge heard from both sides Thursday in a motion to certify a putative class of Uber customers who claim the company misrepresented to whom its 20 percent surcharge goes.

Lead plaintiff Caren Ehret sued the ride-share service in January 2014, claiming that Uber represents on its website and other marketing materials that "gratuity will automatically be added at a set percentage of the metered fare."

But Uber "does not remit the full amount of gratuity represented to consumers to the taxi driver/owner and/or company actually providing the transportation service" and instead "keeps a substantial portion of this additional charge for itself," Ehret claims.

Presiding over the hearing, U.S. District Judge Edward Chen expressed concern that not all members of the proposed class had been exposed to the alleged misrepresentation, since Uber only calls the surcharge "gratuity" on its website, and many customers interact with Uber solely via the mobile app.

"I think there's a real problem here in that it was certainly possible that some riders would not have seen the representation that 20 percent charge is for gratuity and for a gratuity and service charge that was going to go into Uber's pocket and not the driver's pocket," he said.

"Here it's possible to get to the product without seeing that. I don't know how one can prove from these facts that there was exposure for all members of the class, so you've got a predominance problem."

Michael Ram, arguing for the plaintiffs, said that Uber made the misrepresentation through its website and numerous advertisements.

"But how can you presume that every customer went to the website?" Chen said. "What indication do you have that nearly all of them did."

Chen said he needed some indication that "it would be almost universal, if not at least typical, that a customer visited the Uber site" before using the company's services.

"We can discuss ways to creatively address that," Ram said.

Uber attorney Stephen Swedlow said that the advertisements the plaintiffs referred to as misrepresentations were Web pages, not ads, and that it is "factually not correct that there was uniformity" in Uber's calling the surcharge exclusively "gratuity."

He also contended that all Uber receipts call the charge a "gratuity and service fee," but Ram argued that a receipt occurs after the customer has already entered into the transaction.

Ram is with Ram Olson in San Francisco.

Swedlow is with Quinn Emanuel in Chicago.

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