SAN FRANCISCO (CN) – An attorney for Uber asked a federal judge on Thursday to toss a proposed class action accusing the ride-hailing company of shortchanging drivers on fares using its new “upfront” pricing model, saying the plaintiff has misread the contract.
Asking U.S. District Judge William Alsup to dismiss the lawsuit for failure to state a claim, Uber attorney Jonathan Bass said drivers are paid based on actual time and distance driven, and not, as the complaint says, on the fare a rider pays.
“The text of the contract we think is plain-spoken and clear,” Bass said. “We have complied with that. We think that justifies dismissal.”
North Carolina driver Martin Dulberg claims in a lawsuit filed this past February that Uber stopped giving drivers the 80 percent of fares it had promised them in a 2015 driver contract when it switched to an upfront pricing model the following year.
The 2016 pricing model calculates fares before a ride so that riders know beforehand how much they will be charged. Uber previously calculated a rider’s fare at the end of the ride based on actual time and distance driven.
According to Dulberg, the upfront pricing model uses “aggressive” time and distance estimates to calculate fares, often resulting in a fare that is higher than what a passenger would have paid under the old model.
Dulberg claims Uber isn’t giving drivers the higher payments they’re owed for the higher upfront fares. Instead, he says, Uber collects the upfront fares and then performs a separate calculation after the ride is over, resulting in a lower fare due to the aggressive upfront calculation. Uber then pays drivers 80 percent of that lower fare, so drivers get less than 80 percent of the fare assessed to riders.
“Nothing in the agreement contemplates the use of two different fares,” said Andrew Dressel, Dulberg’s attorney. “Whatever is charged to the customers is what the driver should be paid for.”
Judge Alsup did not indicate Thursday how he would rule. But he expressed puzzlement over Dulberg’s request that riders receive 80 percent of an upfront fare.
“Isn’t it a natural and necessary result of your argument that in those cases where the actual fair turns out to be less than the estimated fare that then your client gets less money under your theory?” he asked Dressel.
“Drivers would have to look elsewhere if it turns out that driving for Uber is not economical,” Dressel replied. “Our point is this contract does not permit Uber to charge customers one fare and use a totally separate fare [to pay drivers].”
Bass echoed Alsup’s conclusion, telling the judge that “the logic of the complaint is the driver would share that loss.”
“The driver doesn’t share that loss, nor would it be appropriate to do so,” Bass said, adding the upfront model is a promotional tool targeted toward riders, not drivers.
“What the drivers get for a particular ride is not subject to or dependent on promotions,” he said. “The driver is entitled to a fare based on actual time and distance. In our view, that is compliant with and not in breach of the contract.”
Bass is with Coblentz Patch Duffy & Bass in San Francisco. Dressel is with Napoli Shkolnik in New York.