Judge Keeps Some Gas in Uber Gratuity Case

     SAN FRANCISCO (CN) – Claims that Uber keeps the fee it represents goes to drivers as a gratuity may stick to the ride-sharing company, a federal judge ruled.
     The putative class action Caren Ehret filed against Uber earlier this year repeats many of the claims she alleged in a 2012 class action against Uber in Cook County Circuit Court.
     She claims that Uber misleads customers who use its service and pay an automatic 20 percent “gratuity” fee that the company allegedly mostly keeps instead of giving to the driver.
     The lawsuit claims violations of the California Unfair Competition Law and the Consumer Legal Remedies Act, as well as a breach of contract.
     U.S. District Judge Edward Chen dismissed some claims on Wednesday but found that Ehret sufficiently alleged violations of the unfair competition law.
     Ehret failed, however, to sufficiently argue that Uber violated the section of the CLRA that prohibits “false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions,” or the section that makes illegal “representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not,” according to the ruling.
     Though the judge dismissed Ehret’s claims based on those parts of the law, he allowed her other CRLA claims to stand.
     Chen also nixed the breach-of-contract allegation because tipping is not a binding obligation, and Uber’s alleged failure to give drivers the entire cut of gratuity doesn’t leave customers liable to the drivers.
     “Hence,” Chen wrote, “plaintiff cannot seek damages for breach of contract for Uber’s failure to benefit drivers.”

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